Daily Tax Report: State

Virginia Tax Commissioner Determines Federal Retiree Not Entitled to Subtraction From State Income Tax

April 7, 2020, 5:00 AM

The Virginia Tax Commissioner Jan. 21 determined in a letter ruling that Taxpayer wasn’t entitled to an individual income tax subtraction equivalent to individuals who received Social Security or Railroad Retirement benefits. Taxpayer was a retired federal employee who received a pension from the Civil Service Retirement System (CSRS). Taxpayer filed resident individual income tax returns and claimed refunds, arguing that the state law discriminated against federal CSRS employees. The commissioner ruled that: 1) a state court already held that the state didn’t discriminate against federal CSRS employees based on the source of their pay or compensation; 2) Taxpayer wrongly...

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