Virginia does impose a tax on retirement income. However, you can take an Age Deduction of up to $12,000, if you qualify. The age deduction depends on your age, filing status, and income.
How is the subtraction calculated?
If you or your spouse was born on or before January 1, 1958, you may claim a deduction of up to $12,000 for 2022. If your birth date is:
- On or before January 1, 1939: You may claim an age deduction of $12,000. If you are married, each spouse born on or before January 1, 1939, may claim a $12,000 age deduction. For individuals born after January 1, 1939, the age deduction is based on the criteria below.
- On or between January 2, 1939, and January 1,1958: Your age deduction is based on your income. A taxpayer’s income, for purposes of determining an income-based age deduction, is the taxpayer’s adjusted federal adjusted gross income or “AFAGI.” A taxpayer’s AFAGI is the taxpayer’s federal adjusted gross income, modified for any fixed date conformity adjustments and reduced by any taxable Social Security and Tier 1 Railroad Benefits.
For Filing Status 1, single taxpayers, the maximum allowable age deduction of $12,000 is reduced $1 for every $1 the taxpayer’s AFAGI exceeds $50,000. For all married taxpayers, whether filing jointly or separately, the maximum allowable age deduction of $12,000 each is reduced $1 for every $1 the married
taxpayers’ joint AFAGI exceeds $75,000.
Note for All Married Taxpayers: A married taxpayer’s income-based age deduction is always determined using the married taxpayers’ joint AFAGI. Regardless of whether filing jointly or separately, if you are married, your income-based age deduction is determined using the combined income of both spouses. If both spouses are claiming an income-based age deduction, regardless of whether filing jointly or separately, the married taxpayers must compute a joint age deduction first, then allocate half of the joint deduction to each spouse.