Updated October 29, 2026. Quick answer: Yes, with little relief. Virginia starts from federal adjusted gross income, and the 2025 Form 760 instructions print no subtraction for a civil service pension. The one retirement related break is the “age deduction of up to $12,000 each for 2025”, which applies to any income of an eligible filer.
What Virginia does with a FERS or CSRS annuity
| Question | What the Virginia documents say |
|---|---|
| What the source says | Virginia starts from federal adjusted gross income and the state documents cited here print no exemption or subtraction for federal civilian (CSRS or FERS) pensions, so those payments stay in Virginia income, apart from a narrow subtraction for federal retirement income whose contributions another state already taxed. |
| Age or other test | Age deduction: age 65 or older and born on or before January 1, 1961 for tax year 2025; those born on or before January 1, 1939 get the full amount, and those born later face an income test that starts at $50,000 for single filers and $75,000 for married filers. |
| Change for 2026 | No 2026 change to the age deduction or to federal pension treatment is printed in the state documents cited here. |
In the Virginia documents’ own words
- “Enter the federal adjusted gross income from your federal return.” (2025 Form 760 Resident Individual Income Tax Booklet (instructions))
- “reduced $1 for every $1 the taxpayer’s AFAGI exceeds $50,000” (2025 Form 760 Resident Individual Income Tax Booklet (instructions))
- “any federal government retirement program, the contributions to which were deductible” (Va. Code 58.1-322.02 Virginia taxable income; subtractions)
- “subject to taxation under the income tax in another state” (Va. Code 58.1-322.02 Virginia taxable income; subtractions)
- “The maximum amount of the subtraction is $40,000 for Taxable Year” (2025 Form 760 Resident Individual Income Tax Booklet (instructions))
How this differs from other pensions in Virginia
Federal civilian pensions get no special rule and are treated like private pensions: both are taxed and both can be offset only by the age deduction. Military retirement income is the contrasting case, with its own subtraction of up to $40,000 for tax year 2025. See also Does Virginia tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The statute lets a taxpayer subtract income from 401(k) type plans, IRAs, 457 plans or any federal government retirement program only to the extent contributions were taxed by another state; the state documents cited here do not otherwise address TSP withdrawals. For the Thrift Savings Plan itself, see Does Virginia tax TSP withdrawals? and the TSP calculator.
What the Virginia documents leave open
No Virginia document names CSRS, FERS or federal civil service pensions, so the taxable answer rests on the absence of any such subtraction in the printed list, not on an explicit sentence. No 2026 booklet exists yet, and the TSP is not addressed by name.
Common mistakes
- Assuming a military style subtraction applies. The subtraction of up to $40,000 is for military retirement income, not civilian pensions.
- Missing the age deduction income test. It is reduced $1 for every $1 of federal adjusted gross income above $50,000 for a single filer.
Related: Does Virginia tax pensions?, Virginia military retirement pay, and FERS, TSP and Social Security sequencing.
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Answer againSources
- 2025 Form 760 Resident Individual Income Tax Booklet (instructions): https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2025-760-instructions.pdf
- Va. Code 58.1-322.03 Virginia taxable income; deductions: https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-322.03/
- Va. Code 58.1-322.02 Virginia taxable income; subtractions: https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-322.02/
Read from the state documents linked above on October 29, 2026. General information, not tax advice.