Virginia has a state income tax, and it applies to most residents and workers

Virginia charges state income tax on wages, investment income, and other earnings. Unlike some states that have no income tax at all, Virginia residents and anyone earning money in the state must report this income on their Virginia tax return. The tax rate varies depending on how much you earn — it ranges from 2% on the lowest incomes to 5.75% on higher incomes.

If you work in Virginia but live in another state, you may owe Virginia tax on that income. If you live in Virginia but work in another state, you typically owe Virginia tax on all your income, though you may be able to claim a credit for taxes paid to the other state to avoid paying twice on the same money.

Key Takeaways

  • Virginia's income tax rates range from 2% to 5.75% depending on your income level, with higher earners paying the higher percentage.
  • You must file a Virginia tax return if you live in the state and earn income, even if you also file a federal return.
  • If you work in Virginia but live elsewhere, you owe Virginia tax on wages earned in the state.
  • Virginia allows a credit for taxes paid to other states, so you do not pay tax twice on the same income if you work across state lines.

How Virginia's tax brackets work

Virginia uses a progressive tax system, meaning the percentage you pay increases as your income rises. You do not pay the top rate on all your income — you pay the lower rate on the first portion and the higher rate only on the amount above each threshold. The exact dollar amounts for each bracket change each year, so the rate that applies to a $50,000 income this year may shift slightly next year.

The state publishes updated tax brackets and instructions each January on the Virginia Department of Taxation website. When you file your return, you use the brackets for the year you are reporting — not the current year. This matters if you are filing a return for a previous year or if you are looking up what you owed in the past.

Who has to file a Virginia return

You must file a Virginia tax return if you lived in Virginia on December 31 of that tax year and your income exceeds the filing threshold. The threshold varies by age and filing status — a single person under 65 has a different threshold than a married couple or someone over 65. Even if your income is below the threshold, you may want to file if you had taxes withheld from your paychecks, because filing allows you to claim a refund.

Part-year residents — people who moved to or from Virginia during the year — must file if their income exceeds the threshold for the months they lived there. You report only the income earned while you were a Virginia resident, not income from before you moved or after you left.

Withholding and estimated payments

If you work as an employee, your employer withholds Virginia income tax from your paycheck based on the W-4 form you complete. The amount withheld depends on how many dependents you claim and your expected annual income. If too much is withheld, you get a refund when you file; if too little is withheld, you owe when you file.

If you are self-employed or earn income that is not subject to withholding — such as rental income or investment gains — you may need to make estimated tax payments to Virginia four times a year. These payments are due in April, June, September, and January. The Virginia Department of Taxation provides a worksheet to calculate whether you owe estimated tax and how much each payment should be.

Deductions and credits available in Virginia

Virginia allows you to deduct certain expenses and claim credits that reduce the tax you owe. The standard deduction — a flat amount you can deduct without itemizing — varies by age and filing status and changes each year. You can also itemize deductions if you have significant expenses like mortgage interest or charitable donations, though you must use the same method (standard or itemized) on both your federal and Virginia returns.

Virginia offers several tax credits, including a credit for taxes paid to other states, a credit for property taxes paid, and credits for certain dependents. Some credits are refundable, meaning you can receive money back even if you owe no tax; others reduce your tax bill to zero but do not result in a refund. The Virginia Department of Taxation website lists all available credits and the forms needed to claim them.

Special situations: military, retirees, and non-residents

Military members stationed in Virginia are not required to file a Virginia return on military pay, even if they live in the state. However, they must file on any non-military income. If you are a Virginia resident on active duty stationed outside the state, you still owe Virginia tax on your military pay.

Retirees who receive military pensions, federal pensions, or certain other retirement income may be able to exclude a portion of that income from Virginia taxation. The amount of the exclusion depends on your age and the type of pension. Virginia also allows an exclusion for certain retirement income earned before you turned 59½, though the rules are specific and the Virginia Department of Taxation can clarify whether your situation qualifies.

Filing your Virginia return

You can file your Virginia return on paper using Form 760 (the Virginia Individual Income Tax Return) or electronically through the Virginia Department of Taxation's website or through tax software. Electronic filing is faster and reduces errors — the state processes e-filed returns more quickly than paper returns. If you file on paper, mail it to the address shown in the instructions; do not send it to the federal IRS.

The important date to file is the same as the federal important date, typically April 15. If you need more time, you can request an extension, which gives you until October 15 to file. An extension to file is not an extension to pay — if you owe tax, you should pay by April 15 to avoid penalties and interest, even if you file late.

Frequently Asked Questions

Does Virginia tax Social Security benefits?

No. Virginia does not tax Social Security benefits, even if your total income is high. This is one of the few income sources that Virginia excludes from taxation. Other states vary on this, but Virginia residents do not have to report Social Security on their state return.

What if I moved to Virginia partway through the year?

You are a part-year resident and file a part-year return. You report only income earned while you lived in Virginia and use the filing threshold for part-year residents, which is lower than the full-year threshold. You must provide documentation of when you moved, such as a lease or utility bill showing your move-in date.

Can I claim a credit if I paid tax to another state?

Yes. Virginia allows a credit for income taxes paid to another state on income that is also taxed by Virginia. The credit is limited to the Virginia tax on that income, so it prevents you from paying tax twice but does not create a refund if the other state's tax was higher. You claim this credit on Form 760.

Do I have to file if I am claimed as a dependent?

You may still need to file even if someone else claims you as a dependent. The filing requirement is based on your income, not on whether you are a dependent. A dependent with earned income above the threshold or unearned income above a lower threshold must file, even if a parent or guardian claims them on their return.

What happens if I do not file or pay on time?

Virginia charges penalties and interest on unpaid tax. The penalty for filing late is typically 5% of the unpaid tax per month, up to 25%. Interest accrues daily at a rate set by the state. If you cannot pay in full, contact the Virginia Department of Taxation about payment plans or other options.