Virginia State Tax Deductions

Virginia offers a wide range of state tax deductions and income subtractions designed to help individuals and families reduce their overall taxable income.

Taxpayers may choose between claiming the standard deduction or itemizing deductions, and they may also qualify for several Virginia-specific deductions that are available regardless of which method is chosen.

Understanding these options can significantly lower your Virginia income tax liability.

Standard Deduction vs. Itemized Deductions

Virginia allows taxpayers to select the deduction method that provides the greatest tax benefit.

Standard Deduction

For most filers, the standard deduction offers a simple way to reduce taxable income without keeping detailed records.

• Single filers: $8,750
• Married filing jointly: $17,500

The standard deduction is especially beneficial for taxpayers with modest deductible expenses and helps streamline the filing process.

Itemized Deductions

Taxpayers who itemize deductions on their federal return may also itemize on their Virginia return using Virginia Schedule A. Itemizing may be advantageous if deductible expenses exceed the standard deduction.

Virginia allows several itemized deductions that differ from federal rules, including:

• State and Local Taxes (SALT): Virginia permits a deduction for the full amount of real estate and personal property taxes paid, without being subject to the federal $10,000 SALT cap.
• Medical and Dental Expenses: Qualified medical and dental expenses are deductible to the extent they exceed 10% of federal adjusted gross income (FAGI).

Other Major Virginia Deductions and Subtractions

In addition to the standard or itemized deduction, Virginia offers several income subtractions that apply regardless of which deduction method you choose.

• Age Deduction: Taxpayers age 65 or older may qualify for an age deduction of up to $12,000, depending on income level and date of birth.
• Social Security and Unemployment Benefits: Virginia does not tax Social Security or unemployment compensation. Any amount included in federal adjusted gross income can be subtracted on the Virginia return.
• Military Pay Deduction: Active-duty military members on extended active duty may subtract up to $15,000 of basic military pay, subject to income phase-outs.
• Virginia529 Plan Contributions: Contributions to a Virginia529 college savings plan are deductible up to $4,000 per account per year, with unlimited carryforward of excess amounts. Taxpayers age 70 or older may deduct the full contribution amount in one year.
• ABLEnow Account Contributions: Contributions to ABLEnow disability savings accounts are deductible up to $2,000 per account per year, with carryforward allowed.
• Long-Term Health Care Insurance Premiums: Premiums paid for qualifying long-term care insurance may be deducted if they were not already claimed on the federal return.
• Child and Dependent Care Expenses: Taxpayers may deduct the amount of expenses used to calculate the federal child and dependent care credit, up to $3,000 for one dependent or $6,000 for two or more dependents.

Recommendation: File Electronically

Virginia taxpayers are encouraged to file electronically using approved tax preparation software or the Virginia Department of Taxation’s e-file system. Electronic filing offers several advantages:

• Faster refunds compared to paper returns
• Fewer errors through automatic calculations
• Immediate confirmation that your return was received
• Secure transmission of sensitive tax information

Electronic filing is the most efficient and reliable way to claim Virginia tax deductions and ensure the timely processing of your return.