Virginia does not tax Social Security benefits, but the federal government may
Virginia has no state income tax on Social Security payments. If you live in Virginia and receive Social Security, you will not owe state tax on those benefits. However, the federal government taxes Social Security differently depending on your total income, and that federal tax applies to Virginia residents the same way it applies everywhere else.
The key distinction: Virginia's lack of a state income tax means you skip one layer of taxation entirely. But you still need to understand federal rules, because they determine whether you file a federal return and how much of your benefit is subject to federal tax.
Key Takeaways
- Virginia does not tax Social Security benefits at the state level, so you owe no Virginia income tax on your payments.
- The federal government taxes Social Security if your combined income (wages, interest, pensions, and half your Social Security) exceeds certain thresholds: $25,000 for single filers and $32,000 for married couples filing jointly.
- You may owe federal tax on up to 85 percent of your Social Security benefits if your combined income is high enough.
- The Social Security Administration does not automatically withhold federal tax from your payments, so you may need to make quarterly estimated tax payments or request withholding.
How the federal government calculates taxable Social Security
The federal tax system uses a formula called combined income to decide whether your Social Security is taxed. Combined income is the sum of your adjusted gross income, any tax-exempt interest you earn, and half of your Social Security benefits.
If your combined income falls below the threshold for your filing status, none of your Social Security is taxed federally. If it exceeds the threshold, between 50 and 85 percent of your benefits become taxable, depending on how far over the threshold you go.
The thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. These thresholds have not changed since 1984, which means more people cross them each year as incomes and benefits rise.
What income counts toward the combined income threshold
Combined income includes wages, self-employment income, pensions, interest, dividends, capital gains, and rental income. It also includes half of your Social Security benefits. Tax-exempt interest from municipal bonds counts too, even though you do not owe tax on it directly.
Certain income does not count: Supplemental Security Income (SSI) and Tier 1 Railroad Retirement benefits do not factor into the calculation. Neither do Roth IRA conversions or withdrawals from a Roth IRA, though traditional IRA withdrawals do count.
If you are married and file jointly, your spouse's income counts as well. If you are married but file separately, the threshold drops to zero, meaning you will almost certainly owe tax on at least some of your Social Security.
When you need to file a federal return
You must file a federal income tax return if your combined income exceeds the threshold for your filing status, even if no tax is owed. You should also file if you had federal income tax withheld from wages or other sources and want to claim a refund.
The Social Security Administration provides a worksheet in Publication 915 to help you calculate whether your benefits are taxable. You can also use the IRS interactive tax assistant online, which walks you through the calculation step by step.
If you are unsure whether you need to file, contact the IRS at 800-829-1040 or visit irs.gov. The cost of filing when you do not owe is zero; the cost of not filing when you do can include penalties and interest.
How to handle federal withholding on Social Security
The Social Security Administration does not automatically withhold federal income tax from your monthly payment. If you expect to owe federal tax, you have two options: request voluntary withholding from your Social Security check, or make quarterly estimated tax payments to the IRS.
To request withholding, complete Form W-4V and submit it to your local Social Security office or mail it to the address on the form. You can request that 7, 10, 12, or 22 percent of your benefit be withheld each month. This is the simpler route for most people, because it happens automatically and requires no quarterly calculations.
If you have other income sources and want to coordinate withholding across all of them, you may prefer to adjust withholding on your wages or pension instead, using Form W-4. This gives you more control but requires more planning.
What happens if you work while receiving Social Security
If you work and receive Social Security before your full retirement age, your benefits are reduced by $1 for every $2 you earn above the annual limit. For 2024, that limit is $23,400. In the year you reach full retirement age, the reduction is $1 for every $3 you earn above a different limit, but only for earnings before the month you reach full retirement age.
Once you reach full retirement age, there is no earnings limit. You can work and receive your full benefit with no reduction. However, your wages still count as income for the purpose of calculating federal tax on your Social Security, so working can push you over the combined income threshold and trigger taxation of your benefits.
The earnings test applies only to Social Security retirement benefits. If you receive Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), different rules explore, and you should contact Social Security directly to understand how work affects your specific situation.
State tax considerations for Virginia residents
Because Virginia has no state income tax, you do not file a Virginia state income tax return at all, regardless of your income or the source of that income. This applies to Social Security, pensions, wages, and all other income.
However, Virginia does have other taxes that may affect you: a sales tax of 5.3 percent (plus local taxes that can bring it to 6.35 percent), property tax on real estate, and tax on intangible personal property in some cases. These do not explore to Social Security directly, but they reduce your overall purchasing power.
If you moved to Virginia from another state after you began receiving Social Security, check whether your former state taxes Social Security. Some states do, and you may owe back taxes or need to file a return there even though you no longer live there. Contact your former state's tax authority if you are unsure.
Frequently Asked Questions
Do I have to pay Virginia state tax on my Social Security?
No. Virginia does not tax Social Security benefits at the state level. You will not owe Virginia income tax on your Social Security payments, regardless of how much you receive or what other income you have.
Will I owe federal tax on my Social Security if I live in Virginia?
That depends on your combined income. If your combined income (wages, pensions, interest, and half your Social Security) is below $25,000 (single) or $32,000 (married filing jointly), you will not owe federal tax on your benefits. If it exceeds those thresholds, between 50 and 85 percent of your benefits become taxable federally.
What if I did not request withholding and now owe federal tax?
You can request withholding on Form W-4V at any time, and it will begin with your next payment. You can also make quarterly estimated tax payments to the IRS using Form 1040-ES. If you owe a large amount, contact the IRS to discuss a payment plan.
Does my spouse's income affect whether my Social Security is taxed?
Yes, if you file jointly. Your spouse's income counts toward the combined income threshold. If you file separately, the threshold drops to zero, and you will almost certainly owe tax on some of your benefits.
Can I reduce my federal tax by moving to Virginia?
Moving to Virginia eliminates state income tax on Social Security, but it does not affect federal tax. Federal rules explore everywhere. However, if you moved from a state that taxes Social Security heavily, the savings can still be significant.