Virginia Has a State Income Tax

Yes, Virginia has a state income tax. If you live in Virginia or earn income there, you will owe Virginia state income tax on most types of income — wages, self-employment earnings, investment income, and retirement distributions all count. The tax is separate from federal income tax, meaning you file both a Virginia return and a federal return.

Virginia's income tax rates range from 2% to 5.75%, depending on your income bracket. The state uses a progressive tax system, which means higher earners pay a higher percentage. Unlike some states, Virginia does not have a flat tax rate — what you pay depends on how much you earn.

Key Takeaways

  • Virginia residents and anyone earning Virginia income must file a state income tax return unless they fall below the income threshold for their filing status.
  • Virginia tax rates start at 2% for the lowest bracket and go up to 5.75% for the highest, applied to your taxable income after deductions.
  • You can claim the standard deduction or itemize deductions on your Virginia return, similar to how federal taxes work.
  • Virginia offers tax credits for certain situations, including education expenses, property taxes paid, and dependent care costs.

Virginia Income Tax Brackets and Rates

Virginia's income tax brackets change each year because they are adjusted for inflation. For the 2024 tax year, the brackets are structured so that you pay 2% on your first portion of income, then the rate increases as your income rises, reaching 5.75% on the highest bracket. The exact dollar amounts where each bracket begins depend on your filing status — single, married filing jointly, married filing separately, or head of household.

The Virginia Department of Taxation publishes updated brackets each January on its website. You can find the current year's brackets there, or your tax software will use them automatically. Because brackets shift yearly, what you owed last year may not be exactly what you owe this year, even if your income stayed the same.

Who Must File a Virginia Income Tax Return

You must file a Virginia return if your income exceeds the threshold for your filing status. For 2024, a single person with gross income of $13,000 or more must file, though this threshold changes annually. If you are married filing jointly, the threshold is higher. If you are claimed as a dependent on someone else's return, the rules are different — you may have to file even with lower income.

Even if you do not have to file, you may want to file anyway if you had taxes withheld from your paychecks or if you are owed a refund. Filing is also necessary if you want to claim certain credits that reduce your tax bill. The Virginia Department of Taxation website lists the current year's filing thresholds by status.

Deductions and Credits Available in Virginia

Virginia allows you to claim either the standard deduction or itemize your deductions, just like on your federal return. The standard deduction amount varies by age and filing status and changes each year. If you are 65 or older, Virginia gives you an additional standard deduction on top of the regular amount.

Virginia also offers several tax credits that can lower what you owe. These include credits for education expenses (such as tuition paid to Virginia colleges), property taxes paid, and dependent care costs. Some credits are refundable, meaning you can receive money back even if you owe no tax. Others are non-refundable, meaning they can only reduce your tax bill to zero. Check the Virginia Department of Taxation website or your tax software to see which credits explore to your situation.

Types of Income Subject to Virginia Tax

Virginia taxes most types of income. Wages and salaries from your job are taxable. Self-employment income is taxable. Interest and dividends from investments are taxable. Capital gains — profit from selling stocks, real estate, or other assets — are taxable. Retirement distributions from IRAs and 401(k)s are taxable, though Virginia offers a deduction for certain retirement income under specific conditions.

Some income is not taxed by Virginia. Social Security benefits are not subject to Virginia income tax. Certain military pensions and federal employee pensions receive special treatment under Virginia law. Municipal bond interest is not taxable. If you receive income from out of state, Virginia taxes it only if you are a resident; non-residents generally owe Virginia tax only on income earned within the state.

How to File Your Virginia Income Tax Return

You can file your Virginia return by mail, online, or through a tax professional. The Virginia Department of Taxation accepts paper returns mailed to their address, which you can find on their website. Many people file online using tax software — programs like TurboTax, H&R Block, and others include Virginia forms and will calculate your state tax along with your federal return.

If you use a tax professional — a CPA, enrolled agent, or tax preparer — they will handle both your federal and Virginia returns. The filing important date for Virginia is the same as the federal important date, usually April 15, though it shifts if that date falls on a weekend or holiday. If you cannot file by the important date, you can request an extension, which gives you until October 15 to file.

Virginia Tax Withholding and Estimated Payments

If you are an employee, your employer withholds Virginia income tax from your paycheck based on the W-4 form you complete. You can adjust your withholding at any time by submitting a new W-4 to your employer. If too much is withheld, you will receive a refund when you file. If too little is withheld, you will owe when you file.

If you are self-employed or have income not subject to withholding, you may need to make estimated tax payments to Virginia four times a year. These payments are due in April, June, September, and January. If you do not pay enough through withholding and estimated payments, you may owe a penalty when you file, even if you ultimately do not owe much tax. The Virginia Department of Taxation can tell you whether you need to make estimated payments based on your income situation.

Frequently Asked Questions

Does Virginia tax retirement income differently?

Virginia does not tax Social Security benefits. For other retirement income, such as distributions from IRAs and 401(k)s, Virginia offers a deduction if you are over 59½ and meet other conditions. Military pensions and certain federal employee pensions also receive favorable treatment. Check the Virginia Department of Taxation website or speak with a tax professional about your specific retirement income.

What if I moved to Virginia during the year?

You owe Virginia tax only on income earned while you were a resident. If you moved to Virginia partway through the year, you file as a part-year resident and report only the income earned after you moved. If you moved out of Virginia, you report only income earned before you left. You will also file a return in your previous state for the income earned there.

Can I deduct federal income taxes paid on my Virginia return?

No, Virginia does not allow you to deduct federal income taxes. However, you can deduct state and local property taxes, sales taxes (if you choose), and certain other taxes. The amount you can deduct may be limited depending on your filing status and income level.

What happens if I do not file a Virginia return when I should have?

If you owe tax and do not file, Virginia may assess penalties and interest on the unpaid amount. If you are owed a refund but do not file, you can still claim it, but you generally have a limited time to do so. If you missed a important date, contact the Virginia Department of Taxation to understand your options and any penalties that may explore.

Is there a Virginia earned income tax credit?

Virginia does not have its own earned income tax credit, but you may be may be able to access for the federal Earned Income Tax Credit (EITC) if your income is below certain limits. The federal credit can significantly reduce your tax bill or result in a refund. Check the IRS website or use tax software to see if you may have access to.