Tool | November 2017

State-by-State Guide to Taxes on Retirees


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The Bottom Line
Map of Virginia

Tax Friendly

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 senior breaks 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 additional 0.7% sales tax to pay for transportation improvements, giving the state an average of 5.63%. Food is taxed at 2.5%. statewide; nonprescription drugs are exempt.

Income Tax Range

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

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

Effective income tax rate: 5.1%/individual, 5.6%/joint

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 $247,800 is $1,956.

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.

Inheritance and Estate Taxes

There is no inheritance tax or estate tax.