Virginia — Personal Income Tax

Virginia imposes an annual personal income tax on the Virginia taxable income of every individual. The tax applies at graduated rates ranging from 2% to 5.75%, with four brackets: 2% on income up to $3,000; 3% on income over $3,000 but not over $5,000; 5% on income over $5,000 but not over $17,000; and 5.75% on income over $17,000. These rates have been in effect for taxable years beginning on or after January 1, 1990.

The tax reaches three categories of filers: residents (who are taxed on all income from all sources), part-year residents (taxed on income earned during their Virginia residency period and on Virginia-source income earned while nonresident), and nonresidents who receive income from Virginia sources such as wages for services performed in Virginia, rental income from Virginia real estate, or income from a business operating in Virginia.

Virginia residents include both "actual residents"—individuals physically present in Virginia or maintaining a place of abode here for more than 183 days during the taxable year—and "domiciliary residents" who consider Virginia their permanent home. Members of Congress domiciled in another state are not considered Virginia residents even if they live in the Commonwealth.

Source: Va. Code § 58.1-320; Va. Code § 58.1-325; Virginia Department of Taxation – Residency Status

Virginia allows a standard deduction of $8,750 for single individuals and $17,500 for married persons filing jointly for taxable years beginning on or after January 1, 2025, but before January 1, 2027. For married individuals filing separately, the deduction is $8,750. This was originally scheduled to sunset after 2026, but the sunset was removed by 2026 legislation and subsequently enhanced further.

Upcoming increases:

• For taxable years beginning on or after January 1, 2027, and before January 1, 2028, the standard deduction increases to $9,200 for single filers and $18,400 for married filing jointly (or $9,200 for married filing separately).
• For taxable years beginning on or after January 1, 2028, and before January 1, 2030, the deduction increases again to $9,300 and $18,600 respectively.

Any further changes beyond 2029 would require legislative amendment.

Taxpayers who itemize deductions on their federal return must also itemize on their Virginia return and are not eligible for the standard deduction.

Sources: Source: Va. Code § 58.1-322.03 Source: 2026 Appropriation Act/HB 30 — Legislative Summary Source: Virginia Department of Taxation — 2026 New Tax Laws Summary

Virginia individual income tax returns are due on or before May 1 for calendar-year filers. Fiscal-year filers must file by the fifteenth day of the fourth month following the close of their taxable year. When the due date falls on a Saturday, Sunday, or holiday, the deadline extends to the next business day. Virginia allows an automatic six-month extension to file (moving most deadlines to November 1), but any tax owed must still be paid by the original May 1 deadline to avoid penalties and interest.

Source: Va. Code § 58.1-341; Virginia Department of Taxation – When to File

Virginia uses federal adjusted gross income (FAGI) from the federal return as the starting point for computing Virginia taxable income. Taxpayers then apply Virginia-specific additions to income (such as interest from obligations of other states) and subtractions from income (such as Social Security benefits and certain military pay) to arrive at Virginia adjusted gross income, from which deductions are taken. This structure means that most items includible or excludible for federal purposes flow through to Virginia unless specifically modified by Virginia statute.

Source: Va. Code § 58.1-322

For nonresidents, Virginia sources wage income—and requires employer withholding—based on where the employee physically performs services. Wages for days worked inside Virginia are Virginia-source; wages for days worked outside Virginia (such as telecommuting from another state) are not subject to Virginia income tax regardless of whether the employer is located in Virginia or pays from a Virginia office.

Physical presence sourcing rule Virginia law requires nonresidents to pay tax only on income from Virginia sources. "Wages or salaries received for services performed in Virginia" are classified as Virginia-source income per Va. Code § 58.1-302, and the allocation formula in Va. Code § 58.1-325 multiplies the taxpayer's total Virginia taxable income by a ratio computed from Virginia-source income over all income. The Department of Taxation's administrative rulings and guidance clarify: nonresident employees who work some days in Virginia and some days remotely from outside the state must apportion their income, generally based on the number of days worked in Virginia divided by the total number of workdays. Employers are advised to withhold Virginia income tax only on the Virginia portion, not on compensation for days worked entirely outside the state.

Reciprocity and distinction for Maryland/DC residents Employees who are residents of Maryland or the District of Columbia who telecommute exclusively from their home state do not earn Virginia-source income for those wages. Additionally, reciprocity agreements mean that even if those individuals commute into Virginia for work, they can generally avoid Virginia wage withholding by filing Form VA-4 with their Virginia employer, under 23VAC10-140-230 and Va. Code § 58.1-342. But for remote work performed outside Virginia, the sourcing rule applies regardless of reciprocity.

Recent Department guidance and COVID-19/remote work context As remote and hybrid work arrangements have increased, the Department has not adopted any "convenience of the employer" standard or alternative test; the sourcing and withholding determination continues to rest on the physical location where services are performed. Administrative guidance, including Tax Commissioner Rulings such as P.D. 20-192, reinforce that employers should calculate withholding for nonresidents only on the actual Virginia workdays.

Source: Va. Code § 58.1-302; Va. Code § 58.1-325; Va. Code § 58.1-342; 23VAC10-140-230; Virginia Tax Ruling 20-192

Virginia allows a personal exemption deduction of $930 for each personal exemption allowable to the taxpayer for federal income tax purposes, plus an additional exemption of $800 for each filer who is age 65 or over or blind. These amounts operate as deductions from Virginia adjusted gross income when computing Virginia taxable income.

Federal exemption linkage and TCJA effect

The $930 exemption is expressly tied to "each personal exemption allowable to the taxpayer for federal income tax purposes" under Va. Code § 58.1-322.03(2)(a). The federal Tax Cuts and Jobs Act of 2017 (TCJA) reduced the federal personal exemption amount to $0 effective for tax years 2018 through 2025, but did not repeal the exemption itself—Internal Revenue Code § 151 remains in effect. Virginia's statute references federal eligibility, not the federal dollar amount, so the Virginia $930 exemption remains available to filers and dependents who would be eligible for the (now zero-dollar) federal personal exemption.

The Virginia Department of Taxation applies this rule by reference to the number of exemptions that would have been allowable under pre-TCJA federal rules. Practitioners generally claim the same number of personal and dependent exemptions on the Virginia return that would have been claimed on the federal return under the pre-TCJA framework, meaning one exemption for the filer, one for a spouse (if filing jointly), and one for each dependent. The Department's published guidance states, "You will usually claim the same number of personal and dependent exemptions that you claimed on your federal return."

Additional exemptions for age and blindness

Each filer age 65 or over by January 1 of the year following the taxable year may claim an additional $800 exemption under Va. Code § 58.1-322.03(2)(b). The age test is measured as of January 1 following the close of the taxable year—for the 2025 taxable year, a taxpayer born on or before January 1, 2026 qualifies.

Each filer who is considered blind for federal income tax purposes under IRC § 63(f) may claim an additional $800 exemption. The statute cross-references the federal definition of blindness without modification. Both the age and blindness exemptions are allowable regardless of whether the taxpayer itemizes deductions for federal income tax purposes.

When married couples file jointly, each spouse is entitled to his or her own additional exemption for age or blindness. A taxpayer who is both age 65 or over and blind may claim both additional exemptions, for a combined additional deduction of $1,600.

Allocation between spouses and part-year residents

Va. Code § 58.1-324(5) permits married individuals to allocate personal exemptions between themselves as they mutually agree for Virginia tax purposes, but exemptions for the taxpayer and spouse, together with exemptions for old age and blindness, must be allocated respectively to the spouse to whom they relate. If the spouses fail to agree, the Department allocates the exemptions in a manner corresponding to federal treatment.

Part-year residents must prorate their personal exemption amounts based on the period of Virginia residency during the taxable year, using a ratio worksheet included in the part-year resident instruction booklet. The proration applies to both the $930 base exemption and the $800 additional exemptions.

Interaction with low-income credits

A taxpayer who claims the Credit for Low-Income Individuals on Line 23 of Form 760 may not also claim the additional exemptions for age 65 or over or blindness. For married taxpayers, if one spouse claims a Credit for Low-Income Individuals, neither spouse may claim an age deduction, even if filing separate returns.

Source: Va. Code § 58.1-322.03; Va. Code § 58.1-324; Virginia Department of Taxation – Exemptions

Virginia taxpayers age 65 and older qualify for both an age-based subtraction (deduction) under Va. Code § 58.1‑322.03(5) of up to $12,000—with eligibility determined by birth date and subject to an adjusted federal adjusted gross income (AFAGI) phase-out—and a separate additional personal exemption of $800 under § 58.1‑322.03(2)(b). The subtraction reduces income; the exemption reduces taxable income via personal exemptions and is flat with no phase-out.

Why the distinction matters

• Age subtraction under § 58.1‑322.03(5):

• Taxpayers born on or before January 1, 1939 may claim the full $12,000 subtraction. Taxpayers born after that date who are age 65 or older also qualify but the amount is reduced by $1 for each $1 that their "adjusted federal adjusted gross income" (AFAGI, defined as federal AGI less taxable Social Security and Tier 1 Railroad Retirement benefits) exceeds $50,000 (single) or $75,000 (married filing jointly), with married filing separately using combined AFAGI over $75,000.

• Additional exemption under § 58.1‑322.03(2)(b):

• Each taxpayer who is "aged" or blind under IRC § 63(f) is entitled to an additional personal exemption of $800, usable regardless of whether the taxpayer itemizes deductions and irrespective of income level.

Summary of differences | Feature | Age Subtraction (§ 322.03(5)) | Additional Exemption (§ 322.03(2)(b)) | |----------------------------|--------------------------------------------------------|---------------------------------------------------| | Mechanism | Subtraction from income | Personal exemption affecting taxable income | | Maximum Amount | $12,000 | $800 | | Birth Date Cutoff | On or before Jan 1, 1939 vs. after | No cutoff | | Income Phase-out | Yes – AFAGI thresholds apply | No phase-out | | Basis | Based on age 65+ and income | Based on being aged or blind (regardless of income)|

Source support

• Authority for subtraction and phase-out: Va. Code § 58.1‑322.03(5) from the official Code of Virginia. Va. Code § 58.1-322.03
• Authority for additional exemption: Va. Code § 58.1‑322.03(2)(b), from official Code of Virginia. Va. Code § 58.1-322.03

Caution / review status Not yet human confirmed. Please verify that there have been no legislative changes to § 58.1‑322.03 after these versions, particularly for the 2026 tax year.

Virginia has personal income tax reciprocity agreements with the District of Columbia, Kentucky, Maryland, Pennsylvania, and West Virginia. These agreements provide that residents of those states who earn wages or salaries for services performed in Virginia are exempt from Virginia income tax withholding, provided they file the required exemption certificate (Form VA-4) with their Virginia employer. In turn, Virginia residents working in these states are subject only to Virginia income tax on their wages covered by reciprocity, not to the other state's tax.

Operation of reciprocity

• The nonresident employee must file Form VA-4 with their Virginia employer, certifying their qualified resident status in one of the reciprocity states. If properly filed, the Virginia employer is relieved from withholding Virginia income tax on such wages (withholding may still be required for other types of Virginia-source income not covered by reciprocity).
• The exemption applies only to wages and salaries; it does not extend to income from self-employment, business, or Virginia-based pass-through entities, which remain subject to regular nonresident tax treatment and withholding rules.
• Virginia employers must begin withholding Virginia income tax if the employee ceases to qualify for exemption under the reciprocity agreement (e.g., moves to Virginia or to a non-reciprocity state).

No reciprocity?

• For residents of states other than DC, KY, MD, PA, or WV, reciprocity does not apply. Virginia income tax withholding is mandatory for all nonresidents earning Virginia-source wages, regardless of their home state. Such nonresident employees must file a Virginia nonresident income tax return (Form 763) to report and reconcile their Virginia-source wages.

Employer obligations

• Employers must maintain exemption certificates (VA-4) for each qualifying nonresident employee from a reciprocity state. Failure to secure proper documentation may result in assessment for underwithholding.
• Employers still must comply with Virginia withholding obligations for non-wage payments not covered by reciprocity and for any employee who loses reciprocity eligibility.

Primary authority

• Reciprocity mechanics and exemption provisions: Va. Code § 58.1-342
• Withholding details for reciprocity/non-reciprocity: 23VAC10-140-230
• List of current reciprocity states and operational FAQs: Virginia Dept. of Taxation /reciprocity web page

Source: Va. Code § 58.1-342; 23VAC10-140-230; Virginia Department of Taxation – Reciprocity

Virginia allows individual residents and certain part-year residents to claim a credit for net income taxes paid to other U.S. states and some localities, to prevent double taxation of the same income. The rules are governed by Va. Code § 58.1-332, 23VAC10-110-220, and the official Schedule OSC instructions.

Who can claim the credit?

• Full-year residents: Eligible for the credit if the same income is taxed by both Virginia and another U.S. state or its political subdivision (e.g., city or county income tax), provided it is a net income tax. Taxes paid to non-U.S. jurisdictions are not eligible.
• Part-year residents: Credit may only be claimed for taxes paid to another state on income received during the period the taxpayer was a Virginia resident. No credit is allowed for taxes paid on income earned while a Virginia nonresident. (Va. Code § 58.1-303(C); see also Schedule OSC instructions.)

Qualifying taxes and income:

• Only a state or locality's net income tax qualifies (not franchise, excise, sales, or gross receipts taxes). Local income taxes—such as New York City or Maryland county income taxes—are eligible only if imposed on net income and directly on the taxpayer. See 23VAC10-110-220(B) for specifics.
• The credit may not be claimed for taxes paid as a nonresident to a state on income that Virginia does not also tax (for example, if sourced solely by the other state for nonresidents).
• The underlying income must be included in Virginia taxable income as a resident.

Types of double-taxed income:

• Wages and active income: Common cases include Virginia residents earning wages, business, or pass-through income in another state that does not have a reciprocity agreement with Virginia. If a reciprocity agreement applies (DC, KY, MD, PA, WV), only the resident state may tax those wages, so the credit does not generally arise for this income.
• Passive income (interest, dividends, capital gains): Credit is allowed if both states tax the same income under their resident rules and the tax paid is an income tax. Regulatory guidance requires the taxpayer to show both jurisdictions’ claim and reporting of such income. See 23VAC10-110-220(A)(2).

Procedural requirements and limitations:

• Taxpayers claim the credit on Form 760 (for residents) or 760PY (for part-year residents), using Schedule OSC.
• A separate line is required for each state or locality to which tax was paid, and backup documentation (copy of the other state/local return, proof of payment) must be attached.
• The credit is calculated as the lesser of: (a) the net income tax actually paid to the other jurisdiction on the double-taxed income, or (b) the portion of Virginia tax attributable to that income (see allocation formula on Schedule OSC instructions).
• If the taxpayer receives a refund from the other state/locality after claiming the credit in Virginia, an amended return may be required; overclaimed credits are subject to assessment and collection.

Where to claim:

• Schedule OSC must be filed with the Virginia individual income tax return. Part-year residents should ensure the credit computation covers only income earned and taxed during the Virginia residency period per specific worksheet guidance.

Limitations and cautions:

• No credit is provided for taxes paid to states, localities, or countries outside the U.S., or for non-income taxes. See 23VAC10-110-220(A)(3), (B), (C).
• Practitioners should review the Department’s detailed examples and clarifications in the Schedule OSC instructions before completing the computation, especially for situations with multiple state and local income taxes or for apportioning among part-year residency periods.

Source: Va. Code § 58.1-332; 23VAC10-110-220; Virginia Department of Taxation – Schedule OSC Instructions

Not yet human confirmed. Practitioners should verify edge cases (especially multi-state/local income or passive income apportionment) against current instructions and administrative rulings.

Permanent Enhanced Standard Deduction — Legislative Sunset Removed

Virginia’s enhanced standard deduction amounts—$8,750 for single filers and $17,500 for married filing jointly, with $8,750 for married individuals filing separately—were originally scheduled by Va. Code § 58.1-322.03(C) to sunset for taxable years beginning on or after January 1, 2027. This sunset would have dropped the deduction back to $3,000 (single) and $6,000 (married) absent further legislative action.

Important Change: Sunset Removed by 2026 Legislation

During the 2026 session, the Virginia General Assembly enacted SB 676 and corresponding SB 30 budget amendments which expressly repeal the sunset provision for these enhanced standard deduction amounts. As a result, the $8,750 (single) and $17,500 (married filing jointly) standard deduction amounts are no longer temporary and will remain in effect for taxable years 2025 and beyond unless changed by future legislative action.

The budget amendment (Item 4-14#2h of SB30, 2026 session) and the enrolled bill language of SB 676 both eliminate the scheduled reversion of the deduction to lower pre-2022 amounts. The Code of Virginia § 58.1-322.03 has now been amended to reflect this legislative change. Practitioners should note this permanence for tax planning purposes; all published Department of Taxation guidance as of July 2026 reflects the continuation of the higher standard deduction with no set expiration date.

No additional statutory changes regarding personal exemptions or tax brackets were enacted for years after 2026 as of July 2026. Practitioners should always verify the applicable text of § 58.1-322.03 and recent DOR bulletins for any amendments in subsequent sessions.

Source: Va. Code § 58.1-322.03 Source: Virginia General Assembly SB 676, 2026 Session Source: Virginia General Assembly SB30 Budget Amendment Item 4-14#2h (2026)

Not yet human confirmed. Review recommended after any subsequent legislative session or DOR guidance update.

Virginia requires numerous adjustments to federal adjusted gross income (AGI) when calculating Virginia taxable income, as reported on Schedule ADJ (Form 760). Practitioners must identify both additions (income included for Virginia purposes but not federal) and subtractions (income exempt for Virginia but taxable federally). These items are defined by statute, regulation, and frequently updated Department of Taxation guidance.

Key additions to federal AGI

• Income from obligations of other states (e.g., municipal bond interest from non-Virginia issuers)
• Lump-sum distributions excluded from federal AGI under IRC § 402(e)
• Income taxes paid to another state and deducted federally, if also claimed as an itemized deduction on the Virginia return
• Bonus depreciation and/or other depreciation differences from federal law
• Other income items specifically enumerated in Va. Code § 58.1-322.02 and in 23VAC10-110-141

Key subtractions from federal AGI

• Social Security and Tier 1 Railroad Retirement benefits included in federal AGI (Va. Code § 58.1-322.02(A)(4))
• Up to $15,000 of military retirement income for taxpayers age 55 or older (2026 cap, scheduled increases through 2028; see legislative updates for future years)
• Up to $6,000 of income from federal or Virginia civil service annuities, for taxpayers age 65 or older (see statutory specifications)
• Virginia National Guard income up to $3,000 (with at least 39 days of service in the year)
• Disability income reported as wages on federal return (additional criteria apply)
• Virginia lottery prizes up to $600
• Other specific subtractions detailed at Va. Code § 58.1-322.02 and in regulations 23VAC10-110-142

Military retirement subtraction — statutory phase-in, cap, and future schedule Virginia's subtraction for military retirement income is subject to a statutory phase-in. Under Va. Code § 58.1-322.02(A)(19), the exclusion is limited as follows:

• Tax year 2022: up to $10,000
• Tax year 2023: up to $20,000
• Tax year 2024: up to $30,000
• Tax year 2025 and thereafter: up to $40,000

For years prior to 2025, the subtraction is available only to taxpayers age 55 or older on the last day of the tax year. Beginning with tax year 2025, the $40,000 cap applies and no scheduled sunset, decrease, or further change is set by statute as of June 2026; the maximum exclusion remains at $40,000 unless amended by future legislative action. All official Department of Taxation and Department of Veterans Services guidance reflect this phase-in and cap.

Documentation and authority Schedule ADJ should be completed alongside Form 760, with supporting documentation for each claimed subtraction. Certain subtractions (e.g., disability, military) require Form 760CG and may trigger DOR correspondence audits.

Practitioner caution: Additions and subtractions change through legislative updates, so always confirm against the latest Schedule ADJ instructions, Va. Code § 58.1-322.02, and the Department of Taxation’s published web pages. Not all federal differences are reconcilable; statutory silence is common and must be respected for ambiguous items.

Source: Va. Code § 58.1-322.02 Source: 23VAC10-110-141 Source: 23VAC10-110-142 Source: Virginia Department of Taxation – Additions Source: Virginia Department of Taxation – Subtractions Source: Virginia Department of Taxation – Military Benefits FAQ Source: Virginia Department of Veterans Services – Tax Exemptions