Does Virginia tax Social Security benefits?

No. Virginia fully exempts Social Security and Tier 1 Railroad Retirement benefits from state income tax. Any portion of your benefits taxed federally is subtracted on the Virginia return, so it does not add to your state taxable income.

What is the Virginia Age Deduction?

Virginia residents 65 and older can deduct up to $12,000 of income per filer. For those born on or after January 2, 1939, the deduction phases out by one dollar for every dollar of adjusted federal AGI above $50,000 single or $75,000 married, reaching zero at higher incomes. Those born before that date get the full $12,000 with no phase-out.

Are pensions and 401(k) withdrawals taxed in Virginia?

Yes. Pension payments, traditional IRA distributions, and 401(k) withdrawals are taxed as ordinary income at Virginia's graduated rates of 2% to 5.75%, the same as wages. Roth withdrawals that are federally tax-free are not taxed by Virginia.

Are there any other retiree breaks in Virginia?

Virginia provides a subtraction for certain military and Bailey-settlement federal retirement income, plus the general Age Deduction. Property tax relief for seniors and disabled residents is handled at the local level, not on the state income tax return.

How are the Virginia tax brackets structured?

Virginia uses four brackets: 2% on the first $3,000, 3% up to $5,000, 5% up to $17,000, and 5.75% on taxable income above $17,000. Most retirees with pension and withdrawal income land in the 5.75% top bracket on their last dollars.

Virginia Retirement Income Tax Calculator

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Virginia is fairly friendly to retirees: Social Security is completely tax-free, and an Age Deduction shields up to $12,000 per person for those 65 and older. Pensions and retirement-account withdrawals, however, are taxed as ordinary income. This calculator pulls those rules together to estimate your Virginia tax.

How it works

Start by removing Social Security, which Virginia never taxes. Then subtract the Age Deduction, which phases out for higher-income filers born after 1939:

Taxable income = pension + IRA/401(k) − age deduction − standard deduction
Age deduction  = up to $12,000, reduced $1 per $1 of AFAGI over $50,000 (single) / $75,000 (joint)
Virginia tax   = 2% / 3% / 5% / 5.75% graduated brackets

Social Security never enters the Virginia base. The Age Deduction is per qualifying filer 65 or older. Whatever remains after the Age Deduction and the Virginia standard deduction is taxed with the graduated brackets.

Example

A single 68-year-old with 24,000 dollars Social Security, 30,000 dollars pension, and 10,000 dollars in 401(k) withdrawals has federal-style AFAGI low enough to keep the full 12,000-dollar Age Deduction. Virginia taxes 40,000 minus 12,000 minus the 8,500 standard deduction, about 19,500 dollars, landing mostly in the 5 percent and 5.75 percent brackets.

Notes

The phase-out here uses adjusted federal AGI as a simplification; your exact figure may differ slightly. Roth withdrawals and qualified military or Bailey-settlement retirement pay may be further exempt. Bracket and deduction figures change yearly. Verify at tax.virginia.gov.