Retirement Taxes in Virginia (2026)
Tax-friendly. Income tax: graduated, top rate 5.75%. Social Security: not taxed. Retirement account withdrawals: same age deduction applies.
Seeded with roughly 12% — about 10% effective federal plus 1.9%, the Virginia tax on $40,000 of IRA withdrawals at 65 under 2026 rules. Change it to your own rate.
What Virginia taxes in retirement
| State income tax | Graduated, top rate 5.75% |
|---|---|
| Social Security | Not taxed |
| 401(k) and IRA withdrawals | Same age deduction applies |
| Pensions | Taxable, less an age deduction of up to $12,000 at 65+ that is reduced as income rises |
| Military retirement pay | Fully exempt in 2026 at any age, according to Virginia Tax; the subtraction was capped at $40,000 for 2025 |
| Estate or inheritance tax | None |
| Average combined sales tax | 5.77% |
| Average effective property tax | 0.78% of home value |
Virginia’s top 5.75% bracket starts at a very low income, so most retirement income is taxed at the top rate. The $12,000 age deduction helps, but it is income-tested and shrinks for higher earners.
What the state tax actually costs you
Take a $500,000 balance and withdraw $2,500 a month, rising with inflation. At an effective federal rate of 10% alone, the money lasts about 18.8 years. Add Virginia's 1.9% and it lasts about 18.2 years — a difference of roughly 0.6 years.
That is the honest scale of it. State income tax is real money, but for most retirees it changes the answer by months or a couple of years, not decades — and it is usually smaller than the effect of housing costs, which is why a move made purely for income tax often fails to pay for itself.
The taxes that are not income tax
Retirees feel sales and property tax more than working-age households do, because a larger share of a fixed income goes on spending and on staying in a house that is already owned. Virginia charges an average combined sales tax of about 5.77% and levies an average effective property tax of about 0.78% of a home's value, which is close to the national average.
There is no state estate or inheritance tax, so only the federal estate tax applies and its exemption is high enough that almost no estate owes it.
How long $500,000 lasts here
Take a single 67-year-old with $500,000 in an IRA, the average Social Security check and $4,000 a month of spending. In Virginia that money runs out at 93 and 10 months, 2 months sooner than in a state with no income tax. Counting Virginia's prices as well, it runs out at 92 and 11 months. How long $500,000 lasts in every state compares all 51.
Should you move for the tax?
Compare the whole burden rather than one line of it. States without an income tax raise the money elsewhere — Texas and New Hampshire through property tax, Tennessee and Washington through sales tax — so the saving is often smaller than the headline suggests. Run your own numbers in the calculator above, then look at what the same house costs in each state, what insurance costs, and how far you would be from family and from the specialists you already use.
Establishing residency is also a formal exercise, not a preference: high-tax states audit departing retirees on days present, driver's licence, voter registration, where the primary home is, and where a doctor and a dentist are. Half-measures lose.
Frequently asked questions
Does Virginia tax Social Security benefits?
Not taxed. Your benefit may still be taxable federally once provisional income crosses the limits — see is Social Security taxable.
Does Virginia tax 401(k) and IRA withdrawals?
Same age deduction applies. Pensions are treated separately — Taxable, less an age deduction of up to $12,000 at 65+ that is reduced as income rises.
Does Virginia tax military retirement?
Fully exempt in 2026 at any age, according to Virginia Tax; the subtraction was capped at $40,000 for 2025. See which states do not tax military retirement.
Is Virginia a good state to retire in for taxes?
Tax-friendly on income tax. A 65-year-old single filer pays about 1.9% in state income tax on $40,000 a year of IRA withdrawals under the 2026 rules. Average combined sales tax is about 5.77% and effective property tax about 0.78% of home value. Estate or inheritance tax: none.
Does Virginia have an estate or inheritance tax?
No. Virginia levies neither an estate tax nor an inheritance tax, so only the federal estate tax applies, and its exemption is high enough that very few estates owe anything.
Other tax-friendly states
Compare and calculate
SavingsLast calculators are educational estimates. They assume a constant average return and steady inflation; real markets are volatile and sequence-of-returns risk can shorten how long money lasts. Nothing here is financial, investment, tax, or legal advice. Consult a qualified professional before making decisions.
Reviewed for the 2026 tax year. Several states are part-way through scheduled rate cuts or phase-outs, and thresholds are often indexed annually — confirm current figures with the Virginia tax agency (listed at taxadmin.org) or a tax professional before acting. The effective rate is a planning figure, not a filing figure.
Printed from https://savingslast.com/retirement-taxes-in-virginia/ on . The figures reflect the inputs shown and the rules as published on that date.