Updated October 16, 2026. Quick answer: Virginia starts from federal adjusted gross income and names no exclusion for 403(b) or 457(b) withdrawals. Its instructions list two related subtractions: a general age deduction of up to $12,000, and a subtraction for retirement income whose contributions were taxed in another state but were deductible from federal adjusted gross income, up to the amount of those contributions.
State retirement-income forms, line by line: Virginia age deduction.
Virginia at a glance
| Item | What the documents say |
|---|---|
| How the state treats 403(b) and 457(b) withdrawals | Taxable, apart from the age deduction and a subtraction for contributions already taxed by another state |
| Do the state’s documents name these plans? | The documents read name neither 403(b) nor 457(b) plans |
| Retirement exclusion or credit | Age deduction of up to $12,000 each for taxpayers born on or before January 1, 1961: the full amount for those born on or before January 1, 1939, and for later births reduced $1 for every $1 that income exceeds $50,000 (single) or $75,000 (married, joint income); a separate subtraction for retirement income whose contributions another state already taxed |
| Public-employee pension rule | No |
| Rate in the documents read | 2% to 5.75% (5.75% over $17,000) |
| Changed for 2026? | The 2026 Amendments to the 2025 Appropriation Act fix the IRC conformity date at December 31, 2025 |
What the Virginia documents say
The Department of Taxation’s 2025 Form 760 instructions begin with “Enter the federal adjusted gross income from your federal return” and list “Taxable pensions, annuities, and IRA distributions” as income on the worksheet. The instructions tie two items to age: an additional $800 personal exemption for taxpayers age 65 or older, and the age deduction of up to $12,000 each for taxpayers born on or before January 1, 1961, which is not limited to retirement income. The full $12,000 applies to those born on or before January 1, 1939; for later births it is reduced $1 for every $1 that income exceeds $50,000 (single) or $75,000 (married, joint income). A separate subtraction, “Retirement Plan Income Previously Taxed by Another State”, covers retirement income on which the contributions were taxed in another state but were deductible from federal adjusted gross income, up to the amount of those contributions; the instructions say Virginia Supplemental Retirement (VRS) distributions do not qualify.
The instructions’ rate schedule ends at “your tax is $720 + 5.75% of the amount over $17,000”.
Withholding and federal tax
Whether a state withholds is a separate rule: see state withholding on retirement withdrawals. Federal rules: 403(b) withdrawal rules and 457(b) withdrawal rules. The IRS says pension and annuity payments from a qualified employer plan have “all or some portion of the amounts you receive may be taxable”.
What the documents do not say
- The instructions do not name 403(b) or 457(b) plans.
- The instructions cite no statute section for this treatment.
Common mistakes
- Assuming Virginia’s rule for a 401(k) or IRA also covers a 403(b) or 457(b): read whether its documents name the plan.
Related: whether Virginia taxes 401(k) and IRA withdrawals, Virginia retirement taxes, whether Virginia taxes pensions, 403(b) withdrawal rules, 457(b) withdrawal rules, and state withholding on retirement withdrawals.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for retirement income
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor plans your withdrawals
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- 2025 Form 760 Resident Individual Income Tax Instructions: https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2025-760-instructions.pdf
- IRS Tax Topic 410, Pensions and annuities: https://www.irs.gov/taxtopics/tc410
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.