Senate Passes Bill Eliminating Income Tax on Disabled Veterans Severance Pay
December 17, 2019
COLUMBUS—State Senator Kristina Roegner (R-Hudson) today announced the Senate's unanimous passage of House Bill 18, which would exempt veterans who receive a disability severance pay from being taxed on that income.
"House Bill 18 aligns Ohio law with the way the federal government and the majority of other states in this nation treat disability severance payments… they do not tax them," said Roegner.
In 2016, Congress passed "The Combat-Injured Veterans Tax Fairness Act," which addressed the improper taxation of disability severance pay that should have been tax-exempt. House Bill 18 seeks to do the same here in Ohio.
The legislation mirrors federal law by offering veterans who have paid state income tax on their disability severance payments, a one-time, retroactive tax credit, going back as far as January 17, 1991. House Bill 18 provides veterans a two-year period during which they can claim the retroactive credit.
"The impact to state coffers is small, $1-1.5 million during the next biennium. While that impact is small to us, it is very meaningful to those on the other end being impacted. We all support members of the military, men and women willing to give their lives to protect us and everything we stand for, and House Bill 18 is one way to thank them and show that support.” Roegner added.
The bill now returns to the Ohio House for a concurrence vote.