Bulletin Number
VTB 85-18
Tax Type
Individual Income Tax
Description
Military Retirement Pay
Topic
Withholding of Tax
Date Issued
08-14-1985
Effective with the payroll period commencing September 1, 1985, persons retired from the regular or reserve component of their Uniformed Service may authorize the withholding of Virginia income tax from their military retirement pay. This option is available because of a preliminary agreement between the Department of Defense and the Virginia Department of Taxation.
To take advantage of this option, a military retiree must write the retired pay office of his or her Uniformed Service, at the following addresses: (1) Army. Commanding Officer, U.S. Army Finance and Accounting Center (Dept. 90), Indianapolis, IN 46249, (800) 428-2290 (2) Navy. Commanding Officer, Navy Finance Center (Code 301), Anthony J. Celebrezze Federal Building, Cleveland, OH 44199, (800) 321-1080 (3) Air Force. Commander, Air Force Accounting and Finance Center, Attn: RP, Denver, CO 80279, (800) 525-0104 (4) Marine Corps. Commanding Officer (CPR), Marine Corps Finance Center, Kansas City, MO 64197, (816) 926-7130 (5) Coast Guard. Commanding Officer (Retired), U.S. Coast Guard Pay and Personnel Center, 444 S.E. Quincy Street, Topeka, KS 66683, (913) 295-2657 (6) PHS. U.S. Public Health Service; Compensation Branch, 5600 Fisher Land (Room 4-50), Rockville, MD 20857, (800) 638-8744 (Except AK and MD) (301) 443-6132 (AK and MD) (7) NOAA. Commanding Officer, Navy Finance Center (Code 301), Anthony J. Celebrezze Federal Building, Cleveland, OH 44199, (800) 321-1080.
Military retirees presently paying estimated tax to Virginia who elect to have Virginia income tax withheld from their military retirement pay may or may not need to continue paying estimated tax, depending on their personal tax situation. Estimated tax payments may still be required if: 1) the amount the retiree elects to have withheld from his or her annuity is not sufficient to satisfy the tax liability with respect to such income, or 2) the retiree has additional income from other sources on which tax is not withheld. If the retiree has income from other sources on which tax is not withheld, he or she may elect to have a sufficient amount of tax withheld from annuity payments to satisfy the total tax obligation.
As with other taxpayers, estimated tax is required if the retiree's Virginia adjusted gross income from which no tax is withheld is greater than the sum of $400 and the personal exemptions to which the retiree is entitled. If less than 80% of the tax due is paid, a statutory underpayment penalty is imposed. In order to avoid the penalty, each retiree must assure that the proper tax is paid by withholding, estimated tax, or a combination of the two.
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