Virginia does not tax Social Security benefits

Virginia exempts all Social Security retirement, survivor, and disability benefits from state income tax. This means if Social Security is your only income source, you owe nothing to Virginia. If you receive Social Security plus other income, only the non-Social Security portion is subject to Virginia's tax.

This exemption applies whether you file as a single filer, married filing jointly, or any other filing status. It also applies to lump-sum payments you receive if you delayed claiming and received back pay in a single year.

Key Takeaways

  • Virginia excludes all Social Security income from state taxation, regardless of how much you receive or your total household income.
  • If you have wages, pensions, or investment income in addition to Social Security, only those other sources are taxed by Virginia.
  • You still report Social Security on your federal return even though Virginia does not tax it, because the federal government may tax it depending on your combined income.
  • The exemption covers retirement benefits, survivor benefits paid to family members, and Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).

What counts as Social Security income under Virginia law

Virginia's exemption covers the full monthly benefit amount you receive from the Social Security Administration. This includes retirement benefits you claim at 62, 67, or 70; survivor benefits paid to your spouse or children after your death; and disability benefits (SSDI) paid before you reach full retirement age.

The exemption also covers Supplemental Security Income (SSI), which is a separate federal program for people aged 65 and older, blind, or disabled with limited income and resources. Though SSI is administered by Social Security, it is technically a different program — Virginia treats it the same way and excludes it from taxation.

Lump-sum retroactive payments are covered too. If you were denied benefits initially and won an appeal, or if you delayed claiming and received several years of back pay in one year, that entire lump sum is exempt from Virginia tax.

How the federal government taxes Social Security differently

Virginia's exemption does not affect your federal tax situation. The federal government may tax Social Security depending on your combined income, which includes half of your Social Security benefits plus all other income (wages, pensions, interest, dividends, capital gains).

If your combined income exceeds $25,000 (single filer) or $32,000 (married filing jointly), up to 50 percent of your benefits may be taxable federally. If it exceeds $34,000 (single) or $44,000 (married), up to 85 percent may be taxable. You still owe nothing to Virginia, but you may owe federal tax.

This is why you receive a Social Security Benefit Statement (Form SSA-1099) each January — it reports your benefits to the IRS, not to Virginia. When you file your federal return, you include this amount. When you file your Virginia return, you exclude it.

Filing your Virginia return with Social Security income

On your Virginia Form 760 (the state income tax return), you report your Social Security benefits on the line for Social Security income, then subtract the full amount as a deduction. This results in zero Virginia tax on that income.

If you use tax software, the program typically handles this automatically once you enter your Social Security amount. If you file by hand, you enter the benefit amount and then claim the full exemption on the deduction line. The net effect is that Social Security never appears in your Virginia taxable income calculation.

You must still file a Virginia return if your other income (wages, pensions, interest) exceeds Virginia's filing threshold, which varies by age and filing status. Social Security does not count toward that threshold, but it must be reported on the return to show the exemption.

When you might still owe Virginia tax despite receiving Social Security

If you have wages from part-time work, a pension, rental income, or investment income in addition to Social Security, you owe Virginia tax on those sources. Social Security itself remains exempt, but your other income is taxed at Virginia's rates, which range from 2 percent to 5.75 percent depending on your total income.

For example: if you receive $20,000 in Social Security and $15,000 in pension income, Virginia taxes only the $15,000 pension. Your Social Security is completely excluded from the calculation.

If you work and earn wages while receiving Social Security, those wages are fully taxable by Virginia. The federal government may reduce your Social Security benefit if you earn above a certain threshold before full retirement age, but Virginia does not — it simply taxes the wages you earn.

Frequently Asked Questions

Do I have to file a Virginia tax return if Social Security is my only income?

No. If Social Security is your only income source, you have no Virginia tax filing requirement. However, if you have any other income (wages, pensions, interest, dividends), you must file if that income exceeds Virginia's threshold for your age and filing status.

Will I owe federal tax on my Social Security even though Virginia doesn't tax it?

Possibly. Virginia's exemption does not affect federal taxation. If your combined income (half your Social Security plus all other income) exceeds $25,000 (single) or $32,000 (married filing jointly), the federal government may tax up to 85 percent of your benefits. You owe nothing to Virginia regardless.

What if I worked and paid Virginia taxes while receiving Social Security?

Your Social Security remains exempt from Virginia tax. Only the wages you earned are taxed by Virginia. If you overpaid Virginia tax because you were unsure about the exemption, you can file an amended return (Form 760-X) to claim a refund within the state's time limit.

Does the Social Security exemption apply if I'm not a Virginia resident?

No. The exemption applies only to Virginia residents who file Virginia tax returns. If you moved out of state, you follow the tax rules of your new state. Some states tax Social Security; others exempt it. Check your new state's rules.

Are survivor benefits paid to my children also exempt from Virginia tax?

Yes. All Social Security benefits, including survivor benefits paid to your spouse, children, or other family members, are exempt from Virginia state income tax. Each recipient reports their own benefits on their own return and claims the exemption.