How Much Is Virginia State Tax? A Detailed Breakdown

Virginia’s state tax system funds public services across the Commonwealth. The state imposes an income tax on earnings, and understanding how this system works is important for anyone who lives in Virginia or earns income within its borders. This overview clarifies the core elements of Virginia’s income tax.

Understanding Virginia’s Income Tax Rates

Virginia operates a progressive income tax system, where different portions of an individual’s taxable income are taxed at varying rates. For the 2024 tax year, rates range from 2.0% to 5.75%.

The tax brackets begin with the lowest rate applied to the initial segment of taxable income. For instance, the first $3,000 of Virginia taxable income is taxed at 2.0%. Income between $3,000 and $5,000 is taxed at 3.0%.

Income between $5,000 and $17,000 is taxed at 5.0%. Any Virginia taxable income exceeding $17,000 is subject to the highest rate of 5.75%.

Key Components of Virginia Taxable Income

Calculating Virginia taxable income starts with Federal Adjusted Gross Income (FAGI), derived from a taxpayer’s federal return. Virginia then requires specific additions and allows subtractions to FAGI to arrive at Virginia Adjusted Gross Income (VAGI).

Common additions to FAGI for Virginia tax purposes include interest income from obligations of other states or their political subdivisions, which is federally tax-exempt but taxable by Virginia. Accelerated depreciation adjustments allowed federally may also need adjustment for Virginia. These additions increase the income base subject to Virginia tax.

Conversely, Virginia allows several subtractions from FAGI that reduce VAGI. These often include Social Security benefits, which are entirely exempt from Virginia income tax. Military retired pay and certain qualifying pension income may also be subtracted, subject to specific age and income limitations. State income tax refunds included in federal taxable income can also be subtracted.

After determining VAGI, taxpayers can further reduce their income by claiming either the Virginia standard deduction or itemized deductions. For the 2024 tax year, the standard deduction is $8,500 for single filers and $17,000 for married couples filing jointly. Taxpayers also claim a personal exemption of $930 for themselves, their spouse, and each qualifying dependent. These deductions and exemptions are subtracted from VAGI to yield the final Virginia Taxable Income.

Available Tax Credits in Virginia

Virginia offers various tax credits that directly reduce an individual’s final tax liability, unlike deductions which reduce taxable income. A tax credit provides a dollar-for-dollar reduction of the tax owed.

One common credit is the Low-Income Credit, which provides relief for taxpayers with limited financial resources. Eligibility depends on Virginia Adjusted Gross Income and the number of exemptions claimed, with specific income thresholds determining the credit amount. This credit helps ensure that the state income tax burden is not disproportionately heavy on lower-income individuals.

Individuals who pay income tax to another state on income also taxed by Virginia may qualify for a Credit for Taxes Paid to Another State. This credit prevents double taxation by allowing a reduction in Virginia tax for taxes paid elsewhere. The credit is generally limited to the amount of Virginia tax that would have been due on that income.

Virginia also offers credits for certain energy-efficient purchases, such as solar energy systems or geothermal heat pumps. Specific requirements regarding the type of purchase and installation must be met.

Another credit is the Land Preservation Tax Credit, which incentivizes landowners to protect natural and historic resources. This credit is available to individuals who donate land or conservation easements to qualifying organizations. Its value is based on a percentage of the donated interest’s value.

Calculating Your Virginia Income Tax

Calculating your Virginia income tax liability involves a sequence of steps that integrate income, deductions, and credits. The process begins with your Federal Adjusted Gross Income (FAGI), which is the foundational figure from your federal tax return.

The next step requires adjusting your FAGI for Virginia-specific additions and subtractions to arrive at your Virginia Adjusted Gross Income (VAGI). Additions include income taxable by Virginia but not federally, while subtractions cover income exempt from Virginia tax.

Once VAGI is determined, you apply either the Virginia standard deduction or itemized deductions, along with any personal exemptions. These reduce your VAGI, resulting in your Virginia Taxable Income. This is the amount upon which your state income tax will be calculated.

With your Virginia Taxable Income established, you apply the progressive tax rates to determine your initial tax liability. Different portions of your taxable income are taxed at the corresponding rates for each bracket. Finally, any applicable Virginia tax credits are subtracted directly from this calculated tax liability, resulting in your net Virginia income tax due or refund.

Filing and Payment Methods

Virginia offers several methods for filing individual income tax returns, providing flexibility for taxpayers. Many individuals file electronically using Virginia Tax Online or authorized commercial tax preparation software. Paper forms can also be downloaded from the Virginia Tax website and mailed.

Paying Virginia state taxes also offers multiple options to suit different preferences. Electronic payment methods include direct debit from a bank account, which can be scheduled when filing electronically. Taxpayers may also pay using a credit card through a third-party vendor, though this typically involves a convenience fee. Checks or money orders can be mailed with the tax return or a payment voucher.

Estimated tax payments are required for individuals who expect to owe more than $150 in Virginia income tax from income not subject to withholding. These payments are typically made quarterly to avoid penalties. The primary deadline for filing and payments is May 1 of each year. If this date falls on a weekend or holiday, the deadline shifts to the next business day. Extensions to file can be requested, generally granting an automatic six-month extension until November 1, but this applies only to filing, not to payment of taxes owed.