General Assembly Raised Bill No. 1429 proposes a personal income tax deduction specifically for military personnel who receive compensation for serving in funeral honor guard details. The bill modifies current tax law by repealing subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 and replacing it with new provisions that allow for the subtraction of this compensation from gross income, effective July 1, 2025, for taxable years starting on or after January 1, 2025. This change reflects a commitment to support military personnel by recognizing their service and providing financial relief through tax deductions.

In addition to the new deduction for military funeral honor guard detail compensation, the bill introduces several other amendments to the tax code. These include a tiered deduction schedule for pension and annuity income based on federal adjusted gross income, specific deductions for contributions to manufacturing reinvestment accounts, and provisions for taxpayers licensed under marijuana-related chapters to claim certain expenses. The bill also allows for a gradual increase in the percentage of income that can be excluded from taxation for distributions from traditional IRAs, starting with a 50% subtraction in 2024 and reaching 100% by 2026. Overall, the proposed changes aim to provide tax relief to individuals with lower incomes and encourage contributions to specific accounts and charitable actions.

Statutes affected:
Raised Bill: 12-701
VA Joint Favorable Change of Reference: 12-701