Section 1 [Definitions] adds certain individuals to those qualified for an income tax credit for past military service. This tax credit, under current law and as amended by this section, applies only to those who have separated from the military before the end of the taxable year.
Under current law, an income tax credit of up to $750 is available to a qualifying individual who either has served in the military for at least 20 years or has a service-connected disability rated by the U.S. Department of Veterans Affairs as being 100 percent total and permanent. Section 1 extends this tax credit to those who have been determined by the military to be eligible for compensation from a pension or other retirement pay from the federal government for service in the military under certain federal code sections.
This section is effective for taxable years beginning after December 31, 2010.