In 2023, several U.S. states passed new income tax cuts specifically benefiting military service members and veterans. These changes include Indiana exempting all military pay of active-duty service members and reservists from state income tax, Maryland doubling its exemption of military retirement pay for veterans under 55, Montana offering an exemption of up to half of military retirement pay for resident military retirees (effective in 2024), and Virginia removing the age limit for its military retirement pay exemption, allowing retirees of any age to claim it starting in 2024. These tax cuts aim to provide financial relief and benefits to military personnel and veterans.

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