Virginia has a state income tax

Virginia taxes your wages, salary, and other income. The state does not have a flat tax rate — instead, it uses a progressive system with tax brackets that increase as your income rises. Your tax rate depends on your filing status and total income for the year.

Virginia's income tax brackets for 2024 range from 2% on the lowest income to 5.75% on the highest. These rates apply to Virginia residents and to nonresidents who earn income within the state. If you work in Virginia but live in another state, you may owe Virginia tax on your wages.

Key Takeaways

  • Virginia's income tax rates range from 2% to 5.75% depending on your income level and filing status.
  • You must file a Virginia tax return if you earned income in the state, even if you live elsewhere.
  • Virginia allows a tax credit for taxes you paid to other states, so you do not pay tax twice on the same income.
  • The Virginia Department of Taxation handles state income tax, and you file using Form 760 or an electronic return.

How Virginia's tax brackets work

Virginia divides your income into brackets, and you pay a different rate on each bracket. For single filers in 2024, the brackets start at 2% on income up to $3,000, then move to higher rates as your income increases. The exact bracket thresholds differ for married filing jointly, married filing separately, and head of household filers.

The brackets adjust slightly each year for inflation. You can find the current year's brackets on the Virginia Department of Taxation website. Because the rates are progressive, a higher income does not mean all your income is taxed at the highest rate — only the portion that falls into each bracket is taxed at that bracket's rate.

Who must file a Virginia return

You must file a Virginia tax return if you earned income in Virginia during the tax year, regardless of where you live. This includes wages from employment, self-employment income, rental income, and other Virginia-source income. The filing requirement also depends on your total income and filing status.

If you are a Virginia resident, you must file if your income exceeds the standard deduction for your filing status. Nonresidents must file if they earned Virginia-source income above a certain threshold. Even if you do not owe tax, filing may be required to claim refundable tax credits.

Virginia tax credits and deductions

Virginia offers several tax credits that can reduce the amount of tax you owe. The Earned Income Tax Credit (EITC) is available to low- and moderate-income workers and is based on your federal EITC. Virginia also offers credits for child and dependent care expenses, education-related costs, and property taxes paid.

You can also deduct certain expenses from your Virginia taxable income. Mortgage interest, charitable contributions, and medical expenses may be deductible depending on your situation. Virginia allows you to take the standard deduction or itemize deductions, similar to federal tax filing.

Tax credits for out-of-state taxes

If you paid income tax to another state on income you also owe Virginia tax on, you can claim a credit for those taxes. This prevents you from paying tax twice on the same income. The credit is limited to the lesser of the tax you paid to the other state or the Virginia tax on that income.

You claim this credit on your Virginia return. It applies most often to people who work in one state and live in another, or who moved during the tax year. The credit does not apply to taxes paid to federal or local governments, only to other states.

How to file your Virginia return

You can file your Virginia return electronically or by mail. Most people file electronically using tax software or through a tax preparer. Virginia accepts federal e-file, which means if you file your federal return electronically, you can file your Virginia return the same way.

The main form is Form 760, the Virginia Individual Income Tax Return. You also file any required schedules for income sources, deductions, or credits. The filing deadline is typically April 15, the same as the federal deadline. If you need more time, you can request an extension, which gives you until October 15 to file.

Special situations: Military, federal employees, and retirees

Virginia does not tax military retirement pay for service members who retired after January 1, 2020. This means if you receive a military pension, you do not owe Virginia income tax on that income. Federal employee pensions are also exempt from Virginia tax.

If you are a Virginia resident who moved out of state, you may still owe Virginia tax on income you earned while a resident. Once you establish residency in another state, you generally do not owe Virginia tax on future income. However, you must file a return for the year you moved to report the income you earned as a Virginia resident.

Frequently Asked Questions

Do I owe Virginia tax if I work in Virginia but live in another state?

Yes. Virginia taxes income earned within the state, regardless of where you live. You must file a Virginia return on your Virginia wages. You may also owe tax to your home state, but you can claim a credit for Virginia taxes paid to avoid double taxation.

What is the Virginia standard deduction?

The standard deduction varies by filing status and age. For 2024, it ranges from about $4,500 for single filers to about $9,000 for married filing jointly. The amount increases if you are 65 or older. Check the Virginia Department of Taxation website for the exact amount for your filing status.

Can I claim the federal Earned Income Tax Credit on my Virginia return?

Yes. Virginia has its own EITC that is based on your federal credit. If you may have access to for the federal EITC, you can claim Virginia's EITC on your state return. The amount is typically a percentage of your federal credit.

What if I did not file a Virginia return in past years?

You can file a return for prior years to claim refunds or resolve any tax debt. The Virginia Department of Taxation can tell you which years you are required to file. Filing back returns may also allow you to claim credits you missed.

Is there a penalty for filing late or paying late?

Yes. Virginia charges penalties for late filing and late payment. The penalties increase the longer you wait. If you cannot pay by the deadline, contact the Virginia Department of Taxation about payment plans or other options.