SB 377 — AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR MILITARY FUNERAL HONOR GUARD DETAIL COMPENSATION.

Senate General Assembly FileRaised Bill No.

130377 February Session, 2026 SenateLCO Bill No.

3772286 Senate,Referred Marchto 23, 2026 The Committee on Veterans'VETERANS' andAND MilitaryMILITARY AffairsAFFAIRS reportedIntroduced throughby: SEN.

HONIG(VA) ofAN theACT 8thESTABLISHING Dist.,A ChairpersonPERSONAL ofINCOME theTAX CommitteeDEDUCTION onFOR theMILITARY partFUNERAL ofHONOR theGUARD Senate,DETAIL thatCOMPENSATION. the bill ought to pass.

AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR MILITARY FUNERAL HONOR GUARD DETAIL COMPENSATION.

(iii) To the extent properly includable in gross income for federal income tax purposes, the amount of any refund or credit for SB377LCO /2286 File1 of 14 Raised Bill No.

130377 1overpayment SB377of Fileincome No.taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia;

130 overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia;

(viii) Any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under thischapter butexempt fromfederalincome tax,totheextentthat such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried SB377LCO /2286 File2 of 14 Raised Bill No.

130377 2on SB377by Filesuch No.individual;

130 on by such individual;

(II) For taxable years commencing prior to January 1, 2019, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the SB377LCO /2286 File3 of 14 Raised Bill No.

130377 3federal SB377income Filetax No.as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

130 federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

and (IV) For the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is seventy-five thousand dollars or more, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is seventy-five thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is one hundred thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is one hundred thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the SB377LCO /2286 File4 of 14 Raised Bill No.

130377 4Social SB377Security Filebenefits No.received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

130 Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

(xvi) To the extent properly includable in gross income for federal income tax purposes, any income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 SB377LCO /2286 File5 of 14 Raised Bill No.

130377 5of SB377Title File10 No.of the United States Code;

130 of Title 10 of the United States Code;

(xx) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvi) of this subparagraph, for a person who files a return under the federal income taxLCO as2286 an6 unmarriedof individual14 whoseRaised federalBill adjusted gross income for SB377 / File No.

130377 6tax SB377as Filean No.unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxableyearislessthanonehundredthousanddollars,(I)forthetaxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, and (IV) for the taxable years commencing January 1, 2022, and January 1, 2023, one hundred per cent of any pension or annuity income;

130 such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxableyearislessthanonehundredthousanddollars,(I)forthetaxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, and (IV) for the taxable years commencing January 1, 2022, and January 1, 2023, one hundred per cent of any pension or annuity income;

T1 Federal Adjusted Gross Income Deduction T2 Less than $75,000 100.0% T3 $75,000 but not over $77,499 85.0% T4 $77,500 but not over $79,999 70.0% T5LCO $80,0002286 but7 notof over14 $82,499Raised 55.0%Bill SB377 / File No.

130377 7$80,000 SB377but Filenot No.over $82,499 55.0% T5 T6 $82,500 but not over $84,999 40.0% $85,000 but not over $87,499 25.0% T7 T8 $87,500 but not over $89,999 10.0% $90,000 but not over $94,999 5.0% T9 T10 $95,000 but not over $99,999 2.5% T11 $100,000 and over 0.0% (xxii) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvi) of this subparagraph, any pension or annuity income for the taxable year commencing on or after January 1, 2024, and each taxable year thereafter, in accordance with the following schedule for married individuals who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred fifty thousand dollars:

130T12 $82,500Federal butAdjusted notGross overIncome $84,999Deduction 40.0%Less T6than T7$100,000 $85,000100.0% T13 T14 $100,000 but not over $87,499$104,999 25.0%85.0% $87,500$105,000 but not over $89,999$109,999 10.0%70.0% T8T15 T9T16 $90,000$110,000 but not over $94,999$114,999 5.0%55.0% $95,000$115,000 but not over $99,999$119,999 2.5%40.0% T10T17 T11T18 $100,000$120,000 andbut not over 0.0%$124,999 (xxii)25.0% To$125,000 thebut extentnot properlyover includable$129,999 in10.0% grossT19 incomeT20 for$130,000 federalbut incomenot taxover purposes,$139,999 except5.0% for$140,000 retirementbut benefitsnot underover clause$149,999 (iv)2.5% ofT21 thisT22 subparagraph$150,000 and retirementover pay0.0% under(xxiii) clauseThe (xvi)amount of thislost subparagraph,wages anyand pensionmedical, ortravel annuityand incomehousing forexpenses, thenot taxableto yearexceed commencingten onthousand ordollars after January 1, 2024, and each taxable year thereafter, in accordance with the followingaggregate, scheduleincurred forby married individuals who file a returntaxpayer underduring the federaltaxable incomeyear taxin asconnection marriedwith individualsthe filingdonation jointlyLCO whose2286 federal8 adjustedof gross14 incomeRaised forBill suchNo. taxable year is less than one hundred fifty thousand dollars:

T12377 Federal Adjusted Gross Income Deduction T13 Less than $100,000 100.0% $100,000 but not over $104,999 85.0% T14 T15 $105,000 but not over $109,999 70.0% $110,000 but not over $114,999 55.0% T16 T17 $115,000 but not over $119,999 40.0% $120,000 but not over $124,999 25.0% T18 T19 $125,000 but not over $129,999 10.0% $130,000 but not over $139,999 5.0% T20 T21 $140,000 but not over $149,999 2.5% $150,000 and over 0.0% T22 (xxiii) The amount of lost wages and medical, travel and housing expenses, not to exceed ten thousand dollars in the aggregate, incurred by a taxpayer during the taxable year in connection with the donation to another person of an organ for organ transplantation occurring on or after January 1, 2017;

SB377(xxiv) /To Filethe No.extent properly includable in gross income for federal income tax purposes, the amount of any financial assistance received from the Crumbling Foundations Assistance Fund or paid to or on behalf of the owner of a residential building pursuant to sections 8-442 and 8-443;

130 8 SB377 File No.

130 (xxiv) To the extent properly includable in gross income for federal income tax purposes, the amount of any financial assistance received from the Crumbling Foundations Assistance Fund or paid to or on behalf of the owner of a residential building pursuant to sections 8-442 and 8-443;

(xxviii)LCO To2286 the9 extentof properly14 includableRaised inBill gross income for federal income tax purposes, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross SB377 / File No.

130377 9(xxviii) SB377To Filethe No.extent properly includable in gross income for federal income tax purposes, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is less than one hundred thousand dollars, or as a head of household whose federal adjusted gross income for such taxableyearislessthan onehundredthousanddollars,(I)forthetaxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirementaccount,(II)forthetaxableyearcommencingJanuary1,2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account.

130 income for such taxable year is less than one hundred thousand dollars, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is less than one hundred thousand dollars, or as a head of household whose federal adjusted gross income for such taxableyearislessthan onehundredthousanddollars,(I)forthetaxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirementaccount,(II)forthetaxableyearcommencingJanuary1,2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account.

T23 Federal Adjusted Gross Income Deduction T24 Less than $75,000 100.0% T24 T25 $75,000 but not over $77,499 85.0% T25 T26 $77,500 but not over $79,999 70.0% T26 T27 $80,000 but not over $82,499 55.0% T27 T28 $82,500 but not over $84,999 40.0% T28 T29 $85,000 but not over $87,499 25.0% T29 T30 $87,500 but not over $89,999 10.0% T30 T31 $90,000 but not over $94,999 5.0% T31 T32 $95,000 but not over $99,999 2.5% T32 T33 $100,000 and over 0.0% T33 (xxix) To the extent properly includable in gross income for federal income tax purposes, for married individuals who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundredLCO fifty2286 thousand10 dollars, (I) for the taxable year commencing January 1, 2024, fifty per cent of any14 distributionRaised fromBill an individual retirement account other than a Roth individual retirement account, (II) for the taxable year commencing January 1, 2025, seventy-five per cent SB377 / File No.

130377 10hundred SB377fifty Filethousand No.dollars, (I) for the taxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirement account, (II) for the taxable year commencing January 1, 2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account.

130 of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account.

T34 Federal Adjusted Gross Income Deduction T35 Less than $100,000 100.0% T36 $100,000 but not over $104,999 85.0% T37 $105,000 but not over $109,999 70.0% T38 $110,000 but not over $114,999 55.0% T38 T39 $115,000 but not over $119,999 40.0% T40 $120,000 but not over $124,999 25.0% T40 T41 $125,000 but not over $129,999 10.0% $130,000 but not over $139,999 5.0% T42 T43 $140,000 but not over $149,999 2.5% $150,000 and over 0.0% T44 (xxx) To the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2022, the amount or amounts paid or otherwise credited to any eligible resident of this state under (I) the 2020 Earned Income Tax Credit enhancement program from funding allocated to the state through the Coronavirus Relief Fund established under the Coronavirus Aid, Relief, and Economic Security Act, P.L.

(xxxi)LCO For2286 the11 taxable year commencing January 1, 2023, and each taxable year thereafter, for a taxpayer licensed under the provisions of chapter14 420fRaised orBill 420h, the amount of ordinary and necessary expenses that would be eligible to be claimed as a deduction for federal income tax purposes under Section 162(a) of the Internal Revenue Code but that SB377 / File No.

130377 11(xxxi) SB377For Filethe No.taxable year commencing January 1, 2023, and each taxable year thereafter, for a taxpayer licensed under the provisions of chapter 420f or 420h, the amount of ordinary and necessary expenses that would be eligible to be claimed as a deduction for federal income tax purposes under Section 162(a) of the Internal Revenue Code but that are disallowed under Section 280E of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act;

130 are disallowed under Section 280E of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act;