State-by-State Guide to Taxes on Retirees - Virginia
Tool | November 2018

State-by-State Guide to Taxes on Retirees


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The Bottom Line
Map of Virginia


The Old Dominion offers some tax breaks to retirees. It does not tax Social Security benefits, and residents 65 and older can deduct up to $12,000 per person of income, subject to income-eligibility limits. Virginia's property taxes are modest (with breaks for seniors available), and its sales tax low.

State Sales Tax

5.3% state levy, including 1% that is allocated to local governments. Northern Virginia and the Hampton Roads area have an additonal 0.7% sales tax to pay for transportation improvements, giving the state an average combined rate of 5.65%, according to the Tax Foundation. Groceries are taxed at 2.5% statewide.

Income Tax Range

Low: 2% (on up to $3,000 of taxable income)

High: 5.75% (on taxable income over $17,000)

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Tier I Railroad Retirement benefits are exempt. Also, a Virginia Age Deduction allows an exemption for filers who are 65 or older by January 1, and each spouse must claim his or her own age exemption. The amount of the deduction depends on birth date, filing status and income. For seniors born on January 2, 1939, or before, the age deduction is $12,000 per filer. For those born on January 2, 1939, or later, the $12,000 deduction for individual taxpayers 65 and older is reduced by $1 for every $1 that adjusted federal AGI exceeds $50,000, or $75,000 for married filers.


Qualifies for age deduction.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Qualifies for age deduction.

Private Pensions

Qualifies for age deduction.

Public Pensions

Qualifies for age deduction.

Property Taxes

The median property tax on Virginia’s median home value of $248,400 is $1,973.

Tax breaks for seniors: A county, city or town may enact a program for senior citizens and disabled persons allowing for exemption, deferral or a combination of both for property taxes on homes owned and occupied as the sole dwelling of a person 65 or older. Annual family income is generally limited to $50,000 to qualify for a program, but it may be higher in certain Northern Virginia communities. In addition to annual family income limits, net worth limits may apply. There are no adjustments at the state level.

Vehicle Taxes

A 4.15% “motor vehicle tax” applies to purchases; this is lower than the prevailing sales tax.

Vehicles are also subject to an annual vehicle personal property tax. Localities assess vehicles and administer the tax. For example, the current tax rate for vehicles in Fairfax County is $4.57 for each $100 of assessed value. Depending on the county, city or town where the vehicle is assessed, people 65 and older and disabled individuals who meet income requirements may be eligible for tax relief. There’s also tax relief available for owners of cars assessed at lower values, which is determined by the locality.

Inheritance and Estate Taxes


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