Virginia does not tax Social Security benefits
Virginia is one of the states that does not impose state income tax on Social Security retirement, survivor, or disability benefits. If you receive Social Security payments and live in Virginia, you will not owe Virginia state income tax on those benefits, regardless of your total income or filing status.
However, your Social Security benefits may still be subject to federal income tax depending on your other income sources. The federal government uses a formula based on your "combined income" — which includes wages, interest, dividends, and half of your Social Security benefits — to determine whether any portion of your benefits is taxable at the federal level.
Key Takeaways
- Virginia does not tax Social Security benefits at the state level, so you owe no Virginia income tax on these payments.
- Federal income tax may still explore to your Social Security benefits if your combined income exceeds certain thresholds set by the IRS.
- Combined income includes wages, interest, dividends, and half of your Social Security benefits added together.
- If you work while receiving Social Security before full retirement age, federal earnings limits may reduce your monthly benefit amount.
- You can request that the Social Security Administration withhold federal taxes from your benefits to avoid a tax bill at filing time.
How federal taxation of Social Security works
The IRS uses a two-tier system to determine whether your Social Security is taxable at the federal level. The first tier applies if your combined income is between $25,000 and $34,000 (single filers) or $32,000 and $44,000 (married filing jointly). In this range, up to 50 percent of your benefits may be taxable.
The second tier applies if your combined income exceeds $34,000 (single) or $44,000 (married filing jointly). In this case, up to 85 percent of your benefits may be taxable. These income thresholds have not changed since 1984, so they affect more beneficiaries each year as wages and investment income rise.
If your combined income falls below the first threshold, none of your Social Security benefits are subject to federal income tax. Combined income is calculated by taking your adjusted gross income, adding nontaxable interest, and adding half of your Social Security benefits.
What counts toward your combined income
Combined income includes wages from employment, self-employment income, interest from savings accounts and bonds, dividend income from stocks, capital gains from selling investments, and distributions from retirement accounts like IRAs or 401(k)s. It also includes income from rental properties, pensions, and annuities.
Some types of income do not count toward combined income for this calculation. These include municipal bond interest, Supplemental Security Income (SSI), Medicaid benefits, food stamps, and housing information. Veterans benefits also do not count unless you elect to include them.
Requesting federal tax withholding from your benefits
If you expect your Social Security benefits to be taxable at the federal level, you can ask the Social Security Administration to withhold federal income tax from your monthly payments. This prevents you from owing a large tax bill when you file your return.
To set up withholding, complete Form W-4V (Voluntary Withholding Request) and submit it to your local Social Security office or mail it to the address listed on the form. You can choose to have 7, 10, 12, or 22 percent of your benefits withheld, or you can specify a dollar amount.
You can change your withholding amount at any time by submitting a new Form W-4V. If you do not withhold taxes and owe federal income tax on your benefits, you can pay estimated taxes quarterly using Form 1040-ES, or you can pay the full amount when you file your annual return.
Earnings limits if you work before full retirement age
If you are receiving Social Security retirement benefits and you work before reaching your full retirement age, the Social Security Administration applies an earnings limit. For 2024, if you are under full retirement age for the entire year, your benefits are reduced by $1 for every $2 you earn above $23,400.
In the year you reach full retirement age, a different limit applies only to earnings before the month you reach that age. The limit is $62,160, and benefits are reduced by $1 for every $3 earned above that amount. Once you reach full retirement age, you can earn any amount without affecting your benefits.
These earnings limits explore only to work income — they do not include investment income, pensions, or other non-work sources. If your earnings push you over the limit, Social Security will withhold benefits automatically, and you do not owe the money back.
Filing your Virginia and federal tax returns
When you file your federal income tax return, you will report your Social Security benefits on Form 1040 and Schedule 1. The Social Security Administration sends you a Form SSA-1099 each January showing the total benefits you received in the previous year.
You do not file a separate Virginia state return for Social Security benefits because Virginia does not tax them. However, if you have other income sources — wages, interest, dividends, or retirement account distributions — you may still need to file a Virginia return depending on your total income and filing status.
Virginia has its own income tax brackets and rates for wages and other income. You can find Virginia's current filing requirements and tax rates on the Virginia Department of Taxation website. If you are unsure whether you need to file, a tax professional or the IRS can review your situation.
Other Virginia tax considerations for retirees
While Virginia does not tax Social Security, it does tax other types of retirement income. Distributions from traditional IRAs, 401(k)s, and similar retirement accounts are subject to Virginia income tax. Pension income from private employers and government pensions are also taxable in Virginia.
Virginia does offer a tax deduction for military pensions and some federal pensions, but the rules are specific. If you receive a military pension or federal employee pension, check the Virginia Department of Taxation website or consult a tax professional to see whether your pension qualifies for a deduction.
Virginia also does not tax income from long-term capital gains on the sale of stocks or mutual funds held for more than one year, though this benefit is phasing out. The exclusion applies to gains up to $250,000 for single filers and $500,000 for married couples filing jointly, but the percentage of the exclusion decreases each year.
Frequently Asked Questions
Will I owe Virginia state tax on my Social Security benefits?
No. Virginia does not tax Social Security retirement, survivor, or disability benefits at the state level. You will not owe Virginia income tax on these payments regardless of how much you receive or what other income you have.
Can I avoid federal tax on my Social Security?
If your combined income is below $25,000 (single) or $32,000 (married filing jointly), your Social Security is not subject to federal tax. If your combined income is higher, up to 85 percent of your benefits may be taxable, but you cannot avoid the tax — you can only plan for it by requesting withholding or paying estimated taxes.
What is combined income for Social Security tax purposes?
Combined income is your adjusted gross income plus nontaxable interest plus half of your Social Security benefits. It includes wages, self-employment income, investment income, retirement account distributions, and pensions, but excludes municipal bond interest and certain government benefits.
Do I have to file a Virginia tax return if I only receive Social Security?
No, if Social Security is your only income, you do not need to file a Virginia return. Virginia has no state income tax on Social Security. However, you may still need to file a federal return depending on your age and total income, even if you only receive Social Security.
What happens if I work and receive Social Security before full retirement age?
If you earn more than $23,400 in 2024 (the current limit), Social Security will reduce your benefits by $1 for every $2 you earn above that amount. The earnings limit applies only to work income, not investment income or pensions. Once you reach full retirement age, you can earn any amount without losing benefits.