Updated September 4, 2026. Quick answer: Yes, for public, private and federal pensions alike: Virginia taxes retirement-plan income the same way it taxes wages, with no source-based carve-out. The one broad exception is military retirement pay, partially exempt up to $40,000 for tax year 2025 and later. A general age-65 deduction of up to $12,000 (phased out above $50,000/$75,000 of income) applies against any Virginia income, retirement or not.
Federal civil service pensions in Virginia: does Virginia tax federal pensions.
State retirement-income forms, line by line: Virginia age deduction.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Virginia tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Virginia tax 403(b) and 457(b) withdrawals.
Drawing a pension? Whether the state withholds tax from it, from its own documents: Virginia tax withholding on pension payments.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is Virginia a community property state?.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Virginia tax withholding on IRA and 401(k) withdrawals.
Taking money out of your TSP? How the state taxes it, from its own tax documents: Does Virginia tax TSP withdrawals?.
A pension earned in another state, or paid after a move, is covered here: does Virginia tax out-of-state pensions.
The Fairfax County ERS payment options, DROP and refund rules, from the system’s own handbook: Fairfax County ERS retirement decisions.
Trusts have their own page: does Virginia tax trust income.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Virginia have an inheritance tax?.
Dividends and interest have their own page: does Virginia tax dividends and interest.
Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does Virginia have a gift tax?.
Annuity payments have their own page: does Virginia tax annuity income.
Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does Virginia have an estate tax?.
Military retired pay has its own page: does Virginia tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: Virginia 529 plan tax deduction.
Selling stocks, funds or real estate has its own page: does Virginia tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does Virginia tax 401(k) and IRA withdrawals.
The state’s income tax schedule: the Virginia income tax rate for 2026.
More on Virginia: Virginia LLC Annual Report.
Related state retirement tax guides: Does Virginia Tax Social Security? and Virginia to Arizona Retirement Taxes.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Virginia taxes retirement income generally.
Pending, not current law: House Bill 137 (2026 session) would raise the military subtraction cap to $60,000 (2028), $80,000 (2029), then uncap it (2030); the bill tracker could not be read this session, but Va. Code sec. 58.1-322.02 as displayed on September 30, 2026 lists $40,000 for taxable years beginning on and after January 1, 2025 and no higher figure, so treat $40,000 as the current-law figure.
The rule in the source’s own words. Code of Virginia, section 58.1-322.02: “for taxable years beginning on and after January 1, 2025, up to $40,000 of military benefits” (source, read October 5, 2026). This page’s governing citation: Va. Code sec. 58.1-322.02; sec. 58.1-322.03(5).
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Fully taxable as ordinary income: no exemption for state or local government pensions. |
|---|---|
| Private (employer) pensions | Fully taxable as ordinary income, identical treatment to public pensions. |
| Federal government pensions (FERS/CSRS) | Fully taxable, same as state/local pensions. Virginia has specifically litigated and rejected a Davis v. Michigan-style discrimination claim from federal CSRS retirees (Beisel v. Va. Dept. of Taxation, dismissed with prejudice, appeal declined). |
| Military retirement pay | Partially exempt: the Military Benefits Subtraction covers up to $40,000 of eligible military retirement benefits for tax year 2025 and later. |
| IRA and 401(k)/403(b) distributions | Traditional IRA, 401(k) and 403(b) distributions are fully taxable, the same as any other income. Roth IRA distributions are generally not taxed, following federal treatment. |
| General retirement-income exclusion | Age Deduction: $12,000 for taxpayers 65 or older, reduced $1 for every $1 that federal AGI (minus Social Security and other benefits taxed federally solely under IRC sec. 86) exceeds $50,000 (single) or $75,000 (married), while taxpayers born on or before January 1, 1939 receive the full $12,000; there is no separate reduced tier for ages 62 to 64 in current law. |
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Social Security is never taxed by Virginia. Social Security has its own rules in every state; see the full breakdown in how Virginia taxes retirement income generally.
Figures verified against Va. Code sec. 58.1-322.02 and sec. 58.1-322.03 (law.lis.virginia.gov) and the Virginia Tax Military Benefits Subtraction FAQ and retirement page on September 30, 2026. The Beisel v. Va. Dept. of Taxation case history and the status of House Bill 137 on the bill tracker were not re-checked.
Statute and sources
Governing citation: Va. Code sec. 58.1-322.02 (subtractions, incl. Military Benefits Subtraction), sec. 58.1-322.03(5) (Age Deduction).
- Virginia Tax, Virginia Taxes and Your Retirement
- Virginia Tax, Military Benefits Subtraction FAQ
- Va. Code sec. 58.1-322.02
- Va. Code sec. 58.1-322.03
Read September 4, 2026.
Related: how Virginia taxes retirement income generally · does Virginia tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.