Virginia does not tax Social Security benefits

Virginia excludes all Social Security retirement, survivor, and disability benefits from state income tax. This means you will not owe Virginia state tax on the money you receive from Social Security, regardless of your total income or filing status. The exemption applies to the full amount of your benefit check.

However, Social Security benefits may still be taxable at the federal level. The federal government taxes Social Security based on your "combined income" — a calculation that includes your adjusted gross income, tax-exempt interest, and half of your Social Security benefits. If your combined income exceeds certain thresholds, you may owe federal tax on up to 85 percent of your benefits. Virginia's state exemption does not change this federal tax obligation.

Key Takeaways

  • Virginia does not tax Social Security benefits at the state level, so you owe no Virginia income tax on your monthly Social Security check.
  • Federal tax on Social Security is separate and depends on your combined income, which includes half your benefits plus other income sources.
  • If you live in Virginia and receive Social Security, you still file a federal tax return if your combined income exceeds the federal threshold, but you exclude Social Security from your Virginia return.
  • Other states tax Social Security differently, so the Virginia exemption is an advantage if you are considering where to retire.

How federal taxation of Social Security works

The federal government uses a two-tier system to determine whether your Social Security is taxable. Your "combined income" is calculated as your adjusted gross income plus tax-exempt interest plus half your Social Security benefits. For 2024, if you are single and your combined income exceeds $25,000, you may owe tax on up to 50 percent of your benefits. If your combined income exceeds $34,000, you may owe tax on up to 85 percent of your benefits.

For married couples filing jointly, the thresholds are $32,000 and $44,000. Married couples filing separately face a much lower threshold of $0, meaning nearly all their Social Security is taxable. These thresholds have not changed since 1984 and do not adjust for inflation, so more beneficiaries fall into the taxable range each year.

You calculate your federal tax liability on Social Security using IRS Form 1040 or Form 1040-SR (for people 65 and older). The IRS provides a worksheet to determine how much of your benefit is taxable. Many people use tax software or a tax preparer to handle this calculation.

What counts as income for the federal calculation

Combined income includes wages, self-employment income, interest, dividends, capital gains, rental income, and pension income. It also includes distributions from traditional IRAs and 401(k)s, even if you did not need the money. Tax-exempt interest from municipal bonds counts toward combined income for Social Security tax purposes, even though it is not taxed as income.

Roth IRA distributions do not count toward combined income if they are may have access to distributions. Roth conversions, however, do count. If you are working and receiving Social Security before full retirement age, your earned wages count toward combined income and may push you into a taxable bracket.

This is why some people delay Social Security or manage their other income sources strategically — reducing combined income can lower or eliminate federal tax on benefits.

Filing your Virginia and federal tax returns

When you file your Virginia state return, you report your income as usual but then exclude all Social Security benefits. Virginia Form IT-40 has a line for this exclusion. You subtract the full amount of Social Security you received during the year, which reduces your Virginia taxable income to zero or below (depending on other income sources).

Your federal return is separate. You report all income, including the portion of Social Security that is taxable under the federal formula. If you owe federal tax on Social Security, the IRS will tell you the amount on your tax return calculation.

If you receive a 1099-SSA form from Social Security, it shows your gross benefit amount. You use this figure to calculate both your Virginia exclusion and your federal combined income.

Other Virginia tax considerations for retirees

Virginia also excludes military pensions, federal pensions, and some other retirement income from state tax, though the rules vary. If you receive a pension in addition to Social Security, check whether that pension qualifies for Virginia's pension exclusion — it may or may not, depending on the source.

Virginia has no tax on retirement account withdrawals from IRAs or 401(k)s, but distributions are still counted as income for Social Security tax purposes at the federal level. Virginia also does not tax capital gains the way some states do, which can be an advantage if you are living on investment income.

Property tax in Virginia is set by locality and varies widely. Some counties offer property tax relief for seniors or disabled people, but this is separate from income tax and depends on where you live within the state.

Frequently Asked Questions

Do I have to file a Virginia tax return if I only receive Social Security?

No. If Social Security is your only income, you have no Virginia tax filing requirement. Virginia's filing threshold is based on federal requirements, and if you do not have to file federally, you do not have to file in Virginia. However, if you have other income sources, you may need to file even though Social Security itself is not taxed.

Will my Social Security be taxed if I move to Virginia from another state?

Your Social Security will not be taxed by Virginia. However, your previous state may still tax it if you lived there during part of the year. You may need to file a part-year return in your former state. Check that state's rules before you move.

What if I work and receive Social Security at the same time?

Your wages are not taxed by Virginia, but they count toward your federal combined income, which may make your Social Security taxable at the federal level. Virginia does not tax the Social Security itself, but the IRS may. Your total federal tax liability depends on your combined income calculation.

Do I need to pay estimated taxes on my Social Security?

No. Social Security is not subject to estimated tax payments. However, if you have other income that is not subject to withholding, you may need to make estimated federal tax payments on that income. Virginia does not require estimated tax payments for most retirees.

Can I have taxes withheld from my Social Security check?

Yes, but only for federal tax, not Virginia tax. You can request federal withholding on your Social Security benefit by completing Form W-4V and submitting it to Social Security. Virginia does not offer withholding on Social Security because the state does not tax it.