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. Married individuals filing separately may claim one-half of the married amount ($8,750). These amounts are scheduled to revert to $3,000 for single filers and $6,000 for married filers for taxable years beginning on or after January 1, 2027. Taxpayers who itemize deductions on their federal return must also itemize on their Virginia return and are not eligible for the standard deduction.

Source: Va. Code § 58.1-322.03

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

Virginia taxes nonresidents only on income from Virginia sources, computed using a ratio allocation formula. The Virginia taxable income of a nonresident is calculated by multiplying their Virginia taxable income (computed as if they were a resident) by the ratio of net income, gain, loss, and deductions from Virginia sources to net income, gain, loss, and deductions from all sources.

Statutory definition of Virginia-source income

Virginia Code § 58.1-302 defines "income and deductions from Virginia sources" to include:

1. Items attributable to:

• The ownership of any interest in real or tangible personal property in Virginia
• A business, trade, profession, or occupation carried on in Virginia
• Prizes paid by the Virginia Lottery Department and gambling winnings from wagers placed or paid at a location in Virginia

1. Income from intangible personal property (annuities, dividends, interest, royalties, and gains from disposition of intangible personal property) to the extent such income is from property employed by the taxpayer in a business, trade, profession, or occupation carried on in Virginia

Wage and service income sourcing

Wages for services performed in Virginia are Virginia-source income for nonresidents, even if the taxpayer's employer is located elsewhere or the taxpayer resides in another state. The Department of Taxation applies this rule to W-2 wages reflecting work performed in Virginia. For nonresident individuals who perform services both within and outside Virginia, the Department requires apportionment based on factors that most equitably determine the portion of total income attributable to services performed in Virginia; the Department typically applies a single-sales-factor approach based on where business is transacted or where revenues are generated.

Rental and property income

Income from real property located in Virginia—including rental income and gains from sales—is Virginia-source income. A nonresident who leases or owns Virginia real estate and receives rental income from that property must report it as Virginia-source income, even if the rental activity generates a net loss. The Department has consistently held that leasing property in Virginia constitutes conducting a business in Virginia for income tax purposes.

Pass-through entity income

Income from a pass-through entity (S corporation, partnership, or LLC treated as a partnership) that conducts business in Virginia is Virginia-source income in the hands of nonresident owners. The Department applies corporate apportionment provisions under Va. Code §§ 58.1-405 through 58.1-421 to determine a nonresident shareholder's Virginia-source income from an S corporation. The nonresident's share is based on the apportioned income the entity produces in Virginia, not on the amount of work the individual shareholder personally performed in the state.

Intangible income not tied to Virginia business

Dividends, interest, and capital gains from intangible property are not Virginia-source income for a nonresident unless the intangible property is employed in a business, trade, profession, or occupation carried on in Virginia. A nonresident who owns stock or bonds purely for investment purposes and does not use them in a Virginia business does not have Virginia-source income from dividends, interest, or gains on disposition.

Part-year residents: dual sourcing obligation

Part-year residents are subject to Virginia income tax in two capacities: as residents for the portion of the year they were domiciled in or actually resident in Virginia, and as nonresidents for any Virginia-source income earned during their period of nonresidence. Virginia Code § 58.1-303(C) expressly subjects a part-year resident who derived income from Virginia sources during the nonresident portion of the year to tax as a nonresident on that income. Part-year residents moving into Virginia are prohibited from claiming any credit for taxes paid to their prior state of residence for income earned during the period they were residents of that other state.

Source: Va. Code § 58.1-302; Va. Code § 58.1-325; Va. Code § 58.1-303; Virginia Department of Taxation Ruling 21-164; Virginia Department of Taxation Ruling 25-56

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