Virginia has a state income tax

Virginia taxes your income at the state level. Unlike a handful of states that have no income tax at all, Virginia requires residents and nonresidents who earn money in the state to file a state tax return and pay tax on that income. The tax rate varies depending on how much you earn, ranging from 2% on the lowest bracket to 5.75% on the highest.

This is separate from the federal income tax you owe to the IRS. You will file both a Virginia state return and a federal return if you live in Virginia and have taxable income. The state tax is collected by the Virginia Department of Taxation, not the IRS.

Key Takeaways

  • Virginia has a progressive income tax system with six tax brackets, starting at 2% and reaching 5.75% at the highest income level.
  • You must file a Virginia state return if you are a resident with income above the filing threshold, which changes yearly and depends on your age and filing status.
  • Nonresidents who earned money in Virginia may also owe state tax and should check whether they need to file.
  • Virginia allows you to claim a standard deduction or itemize deductions, similar to federal taxes, which reduces the income amount that gets taxed.
  • The state offers tax credits for certain situations, such as having dependent children or paying property taxes, which directly reduce the tax you owe.

Virginia's tax brackets and rates

Virginia uses a progressive tax system, meaning the tax rate increases as your income increases. You do not pay the top rate on all your income — you pay the lower rate on the first portion, then the next rate on the next portion, and so on. As of 2024, the six brackets are 2%, 3%, 5%, 5.5%, 5.75%, and 5.75%.

The exact income ranges for each bracket change every year because Virginia adjusts them for inflation. For example, in 2024, the 2% bracket applies to income up to roughly $3,200 for single filers, but that threshold will be different in 2025. You can find the current year's brackets on the Virginia Department of Taxation website or on the tax forms and instructions you receive.

Because the rates are low compared to many other states, Virginia's total state and federal tax burden is often moderate. However, Virginia also has a sales tax of 4.3% at the state level, plus local sales taxes that vary by locality, which affects your overall tax picture.

Who must file a Virginia state return

You must file a Virginia return if you are a resident and your income exceeds the filing threshold for your age and filing status. The threshold is lower for people over 65. For 2024, a single person under 65 with more than roughly $12,000 in income must file; a single person 65 or older must file if income exceeds roughly $13,000. These numbers change yearly.

Residents include people who lived in Virginia for the entire year, people who moved to Virginia during the year, and people who moved out of Virginia during the year. If you were in Virginia for any part of the tax year, you are generally considered a resident for that year.

Nonresidents who earned income in Virginia — such as someone who worked in Virginia but lived in another state — may also owe Virginia tax on that income. Whether you must file depends on how much you earned in Virginia and your filing status. The Virginia Department of Taxation can tell you whether you need to file if you are unsure.

Deductions and credits that reduce what you owe

Virginia allows you to reduce your taxable income through either a standard deduction or itemized deductions. The standard deduction is a fixed amount that depends on your age, filing status, and whether you can be claimed as a dependent. For 2024, the standard deduction for a single person under 65 is roughly $4,500, but this amount increases yearly and is higher if you are 65 or older.

If you own a home and pay mortgage interest and property taxes, or if you make charitable donations, you may benefit from itemizing deductions instead. You add up your may be able to access expenses and subtract that total from your income. You choose whichever method — standard or itemized — gives you the larger deduction.

Virginia also offers tax credits, which are different from deductions. A credit directly reduces the tax you owe, dollar for dollar. Virginia has credits for dependent children, property taxes paid, education expenses, and other situations. Credits are often more valuable than deductions because they reduce your actual tax bill rather than just your taxable income.

How to file your Virginia state return

You file your Virginia return using Form 760, the Virginia Individual Income Tax Return, or Form 760PY if you are a part-year resident. You can file on paper by mail or electronically through the Virginia Department of Taxation's website or through tax software. Most tax software that handles federal returns also handles Virginia returns.

The deadline to file is April 15 of the year following the tax year, the same as the federal deadline. If you file your federal return late, your Virginia return is also late. If you cannot file by April 15, you can request an extension, which gives you until October 15 to file without penalty, though you still owe any tax due by April 15.

You will need your W-2 forms from employers, 1099 forms for other income, records of deductions if you itemize, and documentation of any credits you claim. If you use tax software or a tax preparer, they will guide you through what documents to gather.

Tax withholding and estimated payments

If you work as an employee, your employer withholds Virginia state tax from your paycheck, just as they withhold federal tax. You complete a Virginia withholding certificate (Form W-4V) when you start a job to tell your employer how much to withhold. If you do not complete this form, your employer will withhold based on a default amount.

If you are self-employed or have income that is not subject to withholding, you may need to make estimated tax payments to Virginia four times a year. These payments are due on April 15, June 15, September 15, and January 15. If you do not pay enough through withholding or estimated payments, you may owe a penalty when you file your return.

You can adjust your withholding during the year if you realize you are having too much or too little withheld. Contact your employer's payroll department and submit a new Form W-4V.

Special situations: part-year residents and nonresidents

If you moved to Virginia or out of Virginia during the tax year, you are a part-year resident. You file Form 760PY instead of Form 760. You report only the income you earned while you were a Virginia resident, and you claim deductions and credits based on the portion of the year you were in the state.

Nonresidents who earned income in Virginia report only the income earned in Virginia on their Virginia return. This includes wages from a Virginia employer, self-employment income from a Virginia business, and rental income from Virginia property. Income earned outside Virginia is not reported on your Virginia return, even if you worked in Virginia part of the year.

Military members stationed in Virginia may have different rules. If you are active duty military, your state of legal residence for tax purposes may not be Virginia even if you are physically stationed there. Check with your military tax advisor or the Virginia Department of Taxation to understand your situation.

Frequently Asked Questions

Does Virginia tax retirement income and Social Security?

Virginia does not tax Social Security benefits. Retirement income from pensions and 401(k) withdrawals is taxable, but Virginia offers a retirement income deduction for certain types of retirement income, including military pensions, federal pensions, and some other sources. The deduction phases out at higher income levels. Check the Virginia Department of Taxation website or your tax forms to see if your retirement income qualifies.

What if I work in Virginia but live in another state?

You owe Virginia tax on the income you earned in Virginia. You will file a Virginia return reporting only that income. You will also file a return in your home state. Some states offer a credit for taxes paid to other states to avoid double taxation, so check your home state's rules. The Virginia Department of Taxation can tell you whether you must file based on your income level.

Can I file my Virginia return electronically?

Yes. You can file electronically through the Virginia Department of Taxation's website, through tax software, or through a tax preparer. Electronic filing is faster than mailing a paper return and you receive confirmation that the state received your return. The deadline is still April 15 unless you request an extension.

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

If you owe tax and do not file, Virginia charges penalties and interest on the unpaid tax. The penalty is typically 5% of the unpaid tax per month, up to 25%. Interest accrues daily. If you realize you missed a year, you can file a late return. The sooner you file, the less interest and penalty you will owe. Contact the Virginia Department of Taxation if you need help.

Does Virginia tax income from other states or countries?

Virginia taxes only income earned by residents, regardless of where it was earned. If you are a Virginia resident and earned income in another state or country, you owe Virginia tax on that income. You will also owe tax to the other state or country where you earned it. Your home state may offer a credit for taxes paid elsewhere to reduce double taxation.