Virginia does not tax Social Security benefits

Virginia excludes all Social Security income from state income tax. If Social Security is your only income, you owe no Virginia state income tax on it. If you receive Social Security plus other income—wages, pensions, investment returns—Virginia taxes only the non-Social Security portion.

This applies to retirement benefits, survivor benefits, and disability benefits paid by Social Security. It also applies to lump-sum payments you receive if you delayed claiming and later received back pay. The federal government may still tax your Social Security depending on your total income, but Virginia will not.

Key Takeaways

  • Virginia excludes all Social Security benefits from state income tax, regardless of how much you receive or your age.
  • If you have other income alongside Social Security, Virginia taxes only that other income.
  • The federal tax treatment of Social Security is separate from Virginia's treatment, so you may owe federal tax even if you owe nothing to Virginia.
  • You do not need to report Social Security income on your Virginia tax return, though you still report it on your federal return.

How this affects your Virginia tax return

When you file your Virginia state income tax return, you do not include Social Security income in your Virginia taxable income. If you worked and earned wages, received a pension, or had investment income, you report those on your Virginia return and pay tax on them. Social Security stays off the form entirely.

You still receive a Social Security Benefit Statement (Form SSA-1099) each January showing what you received that year. You use this form for your federal return, but not for Virginia. Some people file federal returns but not Virginia returns because their income is entirely Social Security; in that case, you would have no Virginia filing requirement.

When you have both Social Security and other income

If you receive $20,000 in Social Security and $15,000 in pension income, Virginia taxes only the $15,000. The state does not use a combined income test or provisional income calculation the way the federal government does. It straightforward excludes Social Security and taxes everything else.

This means your effective tax rate on your total income is lower than it would be if Virginia taxed Social Security. A retiree with $30,000 total income split between $20,000 Social Security and $10,000 pension pays Virginia tax only on the $10,000 portion.

Federal tax treatment is different from Virginia's

Virginia's decision not to tax Social Security does not affect whether the federal government taxes it. The IRS uses a formula based on your combined income—Social Security plus half your Social Security plus other income—to determine if any of your benefits are taxable at the federal level. You may owe federal tax on Social Security even though Virginia owes you nothing.

For example, if you have $25,000 in Social Security and $20,000 in pension income, Virginia taxes only the pension. The IRS, however, may tax a portion of your Social Security because your combined income exceeds the federal threshold. You would owe federal tax but no Virginia tax on the same income.

Other Virginia tax considerations for retirees

Virginia offers a retirement income tax credit for people over 59½ with income below certain thresholds. This credit can reduce your Virginia tax on pensions, annuities, and some other retirement income. Social Security does not count toward the income limit for this credit, which can make it easier to may have access to if you have substantial Social Security income.

Virginia also does not tax military pensions or certain federal employee pensions. If you receive a combination of Social Security, a military pension, and other income, Virginia taxes only the non-exempt portions. The state's property tax system offers a homestead exemption for people 65 and older, which is separate from income tax but may reduce your overall tax burden.

How to report this on your return

If you use tax software or file by paper, you will enter your Social Security income on your federal return (Form 1040) as required by the IRS. When you prepare your Virginia return (Form 760), you do not transfer Social Security to the Virginia form. You report only wages, self-employment income, pensions, interest, dividends, and other taxable income.

If you use a tax preparer, tell them you received Social Security so they do not accidentally include it on your Virginia return. Most preparers know this rule, but confirming prevents errors. If you file only a federal return and no Virginia return because your income is entirely Social Security, keep your SSA-1099 with your federal tax records.

Frequently Asked Questions

Do I have to file a Virginia tax return if I only have Social Security income?

No. If Social Security is your only income, you have no Virginia filing requirement. You still file a federal return if your income exceeds the federal threshold, but Virginia requires no state return. Check the current year's filing threshold with the Virginia Department of Taxation to confirm.

Does Virginia tax survivor or disability benefits from Social Security?

No. Virginia excludes all types of Social Security benefits from state tax, including survivor benefits paid to family members and disability benefits (SSDI). The exclusion applies regardless of the type of benefit or the recipient's age.

If I move to Virginia, do I owe back taxes on Social Security from when I lived elsewhere?

No. Your tax obligation is based on where you lived when you earned the income and filed your return. If you paid tax on Social Security in another state, moving to Virginia does not change what you owed in the past. Virginia taxes only income earned or received while you were a resident.

Can I claim a deduction for Social Security taxes I paid while working?

No. Virginia does not allow a deduction for Social Security taxes (FICA) paid during your working years. This is a federal-only issue. You may be able to deduct these taxes on your federal return under certain circumstances, but Virginia offers no corresponding deduction.

Does the Virginia retirement income credit include Social Security?

No. The retirement income credit applies to pensions, annuities, and certain other retirement income, but not Social Security. However, Social Security does not count toward the income limit for the credit, which can help you may have access to if you have high Social Security income and lower taxable retirement income.