Updated October 5, 2026. Quick answer: Yes. Virginia’s Form 760 starts from federal income, and the instructions list “Taxable pensions, annuities, and IRA distributions” as income. There is no general annuity exclusion; a filer 65 or older can claim an age deduction of up to $12,000, which phases out above $50,000 (single) or $75,000 (married) of federal adjusted gross income.
State retirement-income forms, line by line: Virginia age deduction.
Next door, the District of Columbia’s treatment of annuity income: does District of Columbia tax annuity income.
How Virginia treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Taxed on the graduated schedule; no general annuity exclusion |
| 2025 rates | 2% up to $3,000, 3% to $5,000, 5% to $17,000 and “5.75% for income over $17,000” |
| Age deduction | “age deduction of up to $12,000 each”, reduced when federal adjusted gross income passes $50,000 (single) or $75,000 (married) |
| Annuity death benefits | A subtraction for lump-sum “death benefit payments received from an annuity contract” that are subject to federal tax |
A $24,000 example
A filer whose Virginia taxable income is already above $17,000 pays 5.75% on the whole of $24,000 in taxable annuity payments, computed as $24,000 x 5.75% = $1,380.
A filer who qualifies for the full $12,000 age deduction lowers Virginia tax by up to $690, computed as $12,000 x 5.75%.
What changes in 2026
The 2025 booklet notes 2026 legislation that fixes Virginia’s conformity date to the Internal Revenue Code at December 31, 2025; it prints no annuity-specific change.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether Virginia taxes pensions, how Virginia taxes retirement income, annuity income tax by state, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- 2025 Form 760 Resident Individual Income Tax Instructions (Virginia Tax): https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2025-760-instructions.pdf
- Subtractions (Virginia Tax): https://www.tax.virginia.gov/subtractions
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.