Virginia’s tax system is a bit like a classic car—it hasn't changed its basic shape in decades. While the world around it moves at lightning speed, the Commonwealth’s income tax structure has remained remarkably steady. Honestly, it’s one of the most predictable parts of living in Virginia, though that doesn't mean it isn't confusing when you first look at the paperwork.
If you’re trying to figure out how much the state is going to take from your paycheck this year, you’re looking at a graduated system. Basically, that just means the more you make, the higher the percentage they take, but only on certain "slices" of your income.
Why Virginia State Tax Brackets Haven't Really Budged
The most surprising thing about Virginia’s tax code is the top bracket. Since 1990, the top rate has been stuck at 5.75%. Think about that. In the 90s, we were still using dial-up internet and watching movies on VHS tapes.
Because those brackets haven't moved to keep up with inflation, almost everyone who works a full-time job in Virginia ends up in the highest bracket. If you earn more than $17,000 in taxable income, you’re already being taxed at the same top rate as a millionaire. It's a quirk of the state’s law that often catches newcomers off guard.
The Breakdown of the Current Rates
Here is how the math actually works for your taxable income:
You pay 2% on your first $3,000.
Then, you pay 3% on the next $2,000 (income between $3,001 and $5,000).
After that, the state takes 5% on the next **$12,000** (income between $5,001 and $17,000).
Finally, everything you make over **$17,000** is taxed at 5.75%.
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It's a "progressive" tax, but because that $17,000 threshold is so low, it feels pretty "flat" for the average worker. You’ve probably noticed that most of your raise or your bonus seems to get hit with that 5.75% rate immediately. That's why.
The 2026 Standard Deduction Drama
While the rates stayed the same, the Standard Deduction has been the real battlefield in Richmond lately. For a long time, the deduction was tiny—just $3,000 for singles.
Thankfully, the General Assembly stepped in. For the 2026 tax year, the standard deduction is significantly higher.
- Single filers: $8,750
- Married couples (filing jointly): $17,500
There was actually a lot of stress about this recently. These higher amounts were supposed to "sunset" or expire, which would have meant a massive tax hike for almost every Virginian. But new legislation has moved to make these higher deductions permanent. It’s a huge relief for middle-class families who don't have enough expenses to itemize.
Personal Exemptions: A Small Extra Win
On top of the standard deduction, Virginia still lets you take a personal exemption. This is $930 for you, $930 for your spouse, and $930 for each dependent.
If you’re 65 or older, or if you’re blind, you get an extra $800 exemption. It’s not a fortune, but every little bit helps when you’re totaling up your "subtractions" before you even get to the tax brackets.
How to Actually Calculate Your 2026 Virginia Tax
Let’s look at a real-world example because looking at percentages is boring. Say you’re a single person living in Arlington or Richmond, and your taxable income (after all your deductions) is $50,000.
Most people make the mistake of multiplying $50,000 by 5.75%. Don’t do that! You’ll overcalculate.
First, you pay 2% on $3,000, which is **$60**.
Then 3% on $2,000, which is **$60**.
Then 5% on $12,000, which is **$600**.
Finally, you take the remaining $33,000 ($50,000 minus the $17,000 we already taxed) and multiply it by 5.75%. That’s **$1,897.50**.
Add those all up: $60 + $60 + $600 + $1,897.50 = **$2,617.50**.
Your "effective" tax rate is actually about 5.2%. It’s lower than the 5.75% "marginal" rate everyone talks about.
Surprising Details About Virginia Residency
One thing that confuses people is what happens if you move. Virginia is very particular about "domicile."
If you live in Virginia for more than 183 days a year, the state considers you a resident for tax purposes. This matters for people who work in D.C. or Maryland but sleep in Virginia. You’ll usually pay taxes to the state where you live, but Virginia has "reciprocity" agreements with its neighbors.
Basically, if you live in Virginia and work in D.C., you don't have to file a D.C. return. You just file in Virginia. It makes life way easier during tax season.
Common Misconceptions About Virginia Taxes
I hear people say all the time that Virginia is a "high tax state." Honestly? It depends on who you compare it to.
If you’re looking at Tennessee or Florida (which have no income tax), then yeah, it’s high. But if you look at Maryland or New York, Virginia is actually pretty reasonable. The fact that the top rate caps out at 5.75% is actually a win for high earners compared to states that go up to 8% or 10%.
Another big myth is that social security is taxed. Good news: Virginia does not tax Social Security benefits. If that’s a big part of your income, you can subtract it entirely on your state return.
What about the 7% bracket?
You might have heard rumors about a new 7% tax bracket for people making over $600,000. There has been a lot of talk in the General Assembly about adding this "millionaire's tax" to help fund schools. As of right now, it hasn't become the settled law for the 2026 filing year in the way the lower brackets have, but it’s something to watch. The political winds in Richmond shift fast.
Actionable Next Steps for Tax Season
Don't wait until April to figure this out. Here is what you should do right now to make sure you aren't surprised by the Virginia state tax brackets:
Check your withholding. Look at your most recent pay stub. If your "Virginia Tax" line looks too small compared to the 5.2% average we calculated earlier, you might owe money at the end of the year. You can update your VA-4 form with your employer anytime.
Track your 529 contributions. If you’re saving for a kid’s college (or your own!) using a Virginia 529 plan, you can deduct up to $4,000 per account from your taxable income. This is one of the best ways to "drop" your income into a lower effective tax range.
Consider the Age Deduction. If you or your spouse are 65 or older, you might be eligible for a deduction of up to $12,000, depending on your income level. Make sure your tax software or accountant knows your exact birth date.
Keep receipts for the "Small Stuff." Virginia still allows some unique subtractions, like certain military retirement pay or even some disability income.
The goal isn't just to pay the tax; it's to make sure you aren't overpaying because you didn't realize the rules changed. While the brackets are old, the ways you can lower your taxable income are always evolving.