Does Virginia tax retirement income?
The short answer
Virginia does not tax Social Security benefits. Other retirement income (pensions, IRA and 401(k) withdrawals) is generally taxable, but taxpayers 65 and older may claim an age deduction of up to $12,000 depending on income, and eligible military retirees may subtract a portion of military retirement pay.
What Virginia leaves alone
Social Security lands untouched at the state level: Virginia fully exempts it, whatever your income. For a Hampton Roads couple whose plan leans on Social Security plus savings, that exemption is a meaningful head start over neighbors like a flat-tax state that reaches everything.
What Virginia taxes
Pension payments, traditional IRA withdrawals, and 401(k) distributions generally count as Virginia taxable income. Two subtractions soften it:
- The age deduction. Taxpayers born on or before the qualifying date who are 65 or older may deduct up to $12,000 each, with the amount phasing down as income rises past the state's thresholds.
- The military benefits subtraction. Eligible veterans may subtract a capped amount of military retirement income, a line item that matters enormously in a region anchored by Naval Station Norfolk.
Why the withdrawal order matters
Because different dollars are taxed differently, the order you spend them in changes what you keep. Drawing taxable accounts, tax-deferred accounts, and Roth dollars in the right sequence, while watching the age-deduction phase-out, is exactly the kind of work the tax component of a One of a Kind Financial Plan™ does.
State tax rules current as of 2026 and subject to change. Your plan is built with your tax professional on the rules in force when it's written.
Reviewed by the 1.oak Financial team · Educational information, not individualized advice. Investment advisory and financial planning services offered through Advisory Alpha, LLC, a Registered Investment Advisor.
