Virginia has both a state income tax and a state sales tax
Yes, Virginia taxes your income at the state level. If you live in Virginia or earn money there, you will owe Virginia state income tax in addition to federal income tax. Virginia's income tax rates range from 2% to 5.75%, depending on how much you earn. The state also charges a 4.3% sales tax on most purchases, plus local sales taxes that vary by county.
Virginia is not a no-income-tax state like Florida or Texas. Your employer will withhold Virginia income tax from your paycheck if you work there, and you will report it on your Virginia tax return each year. If you are self-employed or have income Virginia does not automatically withhold from, you may need to make quarterly estimated tax payments.
Key Takeaways
- Virginia's state income tax ranges from 2% to 5.75% depending on your total income, with rates that increase as you earn more.
- Your employer withholds Virginia income tax from your paycheck automatically, similar to federal withholding, unless you claim exemptions on Form VA-4.
- Virginia's state sales tax is 4.3%, but your total sales tax rate includes local taxes that vary by county, ranging from 5.3% to 5.75% in most areas.
- Self-employed people and those with income sources Virginia does not withhold from must pay estimated quarterly taxes using Form 765.
- Virginia offers tax credits for certain situations, including dependent exemptions and education-related expenses, which reduce the tax you owe.
How Virginia's income tax brackets work
Virginia uses a progressive tax system, meaning the rate increases as your income increases. You do not pay the top rate on all your income — you pay the lower rate on the first portion, then the next rate on the next portion, and so on. For the 2024 tax year, Virginia's brackets are:
| Income Range (Single Filer) | Tax Rate |
|---|---|
| $0 to $3,000 | 2% |
| $3,001 to $12,000 | 3% |
| $12,001 to $60,000 | 4% |
| $60,001 to $75,000 | 4.75% |
| Over $75,000 | 5.75% |
Married couples filing jointly have different bracket thresholds — each bracket is roughly double the single filer amount. The brackets adjust slightly each year for inflation. If you earn $50,000 as a single filer, you would owe 2% on the first $3,000, 3% on the next $9,000, and 4% on the remaining $38,000. Your total tax would be $2,230 before any credits or deductions.
What gets withheld from your paycheck
When you start a job in Virginia, your employer asks you to complete Form VA-4, Virginia's withholding certificate. This form tells your employer how much Virginia income tax to remove from each paycheck. The amount depends on your filing status, the number of dependents you claim, and any additional withholding you request.
Most people have the correct amount withheld automatically, so they do not owe extra tax when they file their return in April. If you claim too many exemptions on Form VA-4, you may have too little withheld and owe money. If you claim too few, you will overpay and receive a refund. You can adjust your withholding at any time by submitting a new Form VA-4 to your employer.
If you have multiple jobs, side income, or a spouse who also works, you may need to increase your withholding on one of your jobs to avoid underpaying. The IRS and Virginia both provide withholding calculators on their websites to help you estimate the correct amount.
Sales tax and other Virginia taxes
Virginia's state sales tax is 4.3%, but you will pay more than that at the register because most localities add their own sales tax on top. Your total sales tax rate depends on which county or city you live in and ranges from 5.3% to 5.75% in most areas. Some items are exempt from sales tax in Virginia, including groceries, prescription medications, and medical equipment.
Virginia also taxes other income types separately. If you earn capital gains — profit from selling stocks, real estate, or other investments — you report those on your Virginia return and pay tax at your ordinary income rate. Dividends from stocks are taxed the same way. If you receive interest income from savings accounts or bonds, that is also taxable at your ordinary rate.
Virginia does not have a separate tax on retirement income like Social Security or pensions, but it does tax distributions from IRAs and 401(k)s as ordinary income. Some retirees may be able to exclude a portion of retirement income under Virginia's retirement income subtraction, which phases out at higher income levels.
Self-employment tax and quarterly payments
If you are self-employed, you owe both federal self-employment tax (Social Security and Medicare) and Virginia state income tax. You cannot wait until April to pay — instead, you must make estimated quarterly tax payments four times per year if you expect to owe $150 or more in Virginia income tax.
Quarterly payments are due on April 15, June 15, September 15, and January 15 of the following year. You calculate your estimated tax using Form 765 and pay it to the Virginia Department of Taxation. If you do not pay enough throughout the year, you may owe a penalty when you file your return, even if you pay the full amount owed by April 15.
Many self-employed people make the mistake of paying only federal estimated taxes and forgetting about Virginia. Both are required. If you are unsure how much to pay, you can base your estimate on last year's tax liability or use the Virginia Department of Taxation's online calculator.
Tax credits and deductions that lower what you owe
Virginia offers several tax credits that directly reduce the amount of tax you owe. A tax credit is different from a deduction — a $100 credit saves you $100 in tax, while a $100 deduction saves you tax only on that $100 of income. Virginia's dependent exemption credit allows you to claim a credit for each dependent, though the amount varies based on your income. Education-related credits, including the Education Savings Trust Fund credit and the Earned Income Credit, may also reduce your Virginia tax.
Virginia also allows you to deduct certain expenses from your income before calculating tax. These include federal income tax paid, mortgage interest on your primary home, and charitable contributions. If you take the standard deduction on your federal return, you can also take Virginia's standard deduction, which is similar in amount. Self-employed people can deduct half of their self-employment tax and business expenses.
Filing your Virginia tax return
You file your Virginia tax return using Form 760, Virginia's individual income tax return, which you submit to the Virginia Department of Taxation by April 15 each year. You must file if your income exceeds the filing threshold, which depends on your age and filing status. Most working people must file even if they had taxes withheld, because the return reconciles what you paid throughout the year with what you actually owe.
You can file your Virginia return on paper or electronically. Many people file electronically at the same time they file their federal return, since Virginia requires you to attach a copy of your federal return to your paper filing. If you use tax software, most programs handle both federal and Virginia returns together. The Virginia Department of Taxation website lists approved e-file providers.
Frequently Asked Questions
Do I have to file a Virginia tax return if I only lived there part of the year?
Yes, if you earned income while living in Virginia, you must file a Virginia return for that year. You report only the income you earned while a Virginia resident. If you moved to another state partway through the year, you may also owe tax to that state. Some states have reciprocal agreements that prevent double taxation, but you still file returns in both places.
What happens if I move out of Virginia — do I still owe Virginia tax?
You owe Virginia tax only on income you earned while you were a Virginia resident. Once you move and establish residency elsewhere, you stop owing Virginia income tax on new income. However, you must file a final Virginia return for the year you moved, reporting income only through your move date. If you still own property in Virginia or have Virginia-source income, you may owe tax on that specific income.
Can I claim the federal Earned Income Tax Credit on my Virginia return?
Virginia has its own Earned Income Credit that is separate from the federal credit. You can claim both. Virginia's credit is worth less than the federal version, but it stacks on top of it. You claim Virginia's credit on Form 760 using the same income and family information you used for the federal credit.
What if my employer did not withhold enough Virginia tax?
When you file your return in April, you will owe the difference between what was withheld and what you actually owe. You can pay it with your return. To avoid this next year, submit a new Form VA-4 to your employer increasing your withholding, or make quarterly estimated payments if you have side income.
Does Virginia tax retirement income differently?
Virginia does not tax Social Security benefits. Distributions from IRAs, 401(k)s, and pensions are taxed as ordinary income. However, Virginia offers a retirement income subtraction that allows some retirees to exclude a portion of retirement income, though this phases out at higher income levels. Check the Virginia Department of Taxation website to see if you may have access to.