Virginia Form 763 is the nonresident individual income tax return. You file it if you lived outside Virginia for the entire tax year but earned income from Virginia sources, whether that was wages for work done in the state, rent from Virginia property, or a share of a Virginia business. The return taxes only the Virginia portion of your total income by running your full income through Virginia’s rates and then multiplying the result by an allocation percentage.
Who Has to File Form 763
Virginia treats you as a resident if you were domiciled in the state or maintained a place of abode there for more than 183 days during the year. Anyone who meets neither test is a nonresident.1Virginia Code Commission. Code of Virginia Title 58.1 Chapter 3 Article 1 – General Provisions Form 763 is for people who were nonresidents the whole year. If you moved into or out of Virginia during the year, you file Form 760PY instead.
You must file Form 763 when your Virginia Adjusted Gross Income meets the threshold for your filing status. For the 2025 tax year, those thresholds are $11,950 for single filers, $23,900 for married filing jointly, and $11,950 for married filing separately. Even below the threshold, file if Virginia tax was withheld from your pay or you made estimated payments, because filing is the only way to claim a refund.2Virginia Department of Taxation. 2025 Form 763 Nonresident Individual Income Tax Instructions
Reciprocity States
Virginia has reciprocity agreements with the District of Columbia, Kentucky, Maryland, Pennsylvania, and West Virginia.3Virginia Tax. Reciprocity DC and Kentucky residents are exempt from filing if they commute daily and earn only wages or salary in Virginia. Maryland, Pennsylvania, and West Virginia residents are exempt only if all three of these hold: they were in Virginia 183 days or less, they kept no home or apartment in Virginia, and their only Virginia income was wages or salary. Any Virginia rental income, business income, or other non-wage income breaks the exemption and puts you back on Form 763.
Active-Duty Military
If you are active-duty military stationed in Virginia but domiciled elsewhere, your military pay is not taxable by Virginia under federal law.4Office of the Law Revision Counsel. 50 USC 4001 – Servicemembers Civil Relief Non-military Virginia income still gets reported on Form 763. Wages from an off-duty job or income from a rental property in Virginia belong on the return.
What Counts as Virginia-Source Income
Virginia-source income includes wages for work performed in the state, income from a business operated in Virginia, rents from Virginia property, and gains from selling Virginia real estate.5Virginia Tax. Ruling 09-103 Ordinary investment income, such as dividends and interest from a brokerage account, is generally not Virginia-source unless it is tied to a Virginia business.
Before you start the return, pull together your completed federal Form 1040 (a copy has to be enclosed with a paper-filed Form 763), all W-2s and 1099s, and any K-1s from Virginia partnerships or S corporations.6Virginia Department of Taxation. 2024 Virginia Nonresident Income Tax Return Form 763 Sort the income documents so you can clearly separate Virginia earnings from everything else.
The Nonresident Allocation Percentage
The allocation percentage is the mechanical center of Form 763. It decides how much of a full Virginia tax bill you actually pay.
- Column A: for each category of income (wages, business income, capital gains, and so on), enter the total from all sources as reported on your federal return.
- Column B: for each category, enter only the Virginia portion.
- Divide the Column B total by the Column A total and express the result as a percentage to one decimal place.
If your total income is $100,000 and $35,000 came from Virginia, the allocation percentage is 35.0%.7Virginia Department of Taxation. 2022 Virginia Form 763 Nonresident Individual Income Tax Instructions This is where nonresident returns most often go wrong. Allocate too much and you overpay. Leave Virginia income out and you can face an assessment with interest later. Multi-state businesses are the hardest case; keep records that tie revenue and expenses back to Virginia operations.
Deductions, Exemptions, and the Rate Schedule
You compute Virginia tax as if you were a resident, then apply the allocation percentage. First reduce your Virginia Adjusted Gross Income by a standard deduction of $8,750 (single) or $17,500 (married filing jointly), or itemize if that produces a larger deduction.8Virginia Tax. Deductions Virginia also allows a personal exemption of $930 for each filer and each dependent claimed on the federal return.9Virginia Tax. Exemptions
Virginia has four brackets:
- 2% on the first $3,000
- 3% on income from $3,001 to $5,000
- 5% on income from $5,001 to $17,000
- 5.75% on income over $17,000
Most nonresidents with meaningful Virginia income land in the 5.75% bracket.10Virginia Department of Taxation. Tax Rate Schedule Multiply the tax computed on the full amount by your allocation percentage to get your actual Virginia liability.
A note on credits. The Credit for Tax Paid to Another State is generally not available to nonresidents; that credit is designed for Virginia residents. As a nonresident, you typically claim a credit on your home state return for tax paid to Virginia. Nonresidents may still qualify for the Virginia Earned Income Credit or the Credit for Low-Income Individuals, both computed on Schedule 763 ADJ and prorated by the same allocation percentage.11Virginia Department of Taxation. 2025 Virginia Schedule 763 ADJ
Military Subtractions
Two subtractions specific to military filers go on Schedule 763 ADJ and reduce income before the allocation percentage applies.
For tax year 2025 and later, up to $40,000 of eligible military retirement benefits can be subtracted.12Virginia Tax. Military Benefits Subtraction FAQ
Service members on extended active duty for more than 90 consecutive days can subtract up to $15,000 of basic pay. The subtraction phases out dollar-for-dollar once basic pay tops $15,000 and hits zero at $30,000. So basic pay of $22,000 gives you an $8,000 subtraction ($15,000 minus the $7,000 over the threshold).
Deadline, Extension, and Late Penalties
Virginia returns, including Form 763, are due May 1, not April 15.13Virginia Tax. When to File For 2025 returns, the deadline is May 1, 2026.
Virginia grants everyone an automatic six-month extension to file. No separate extension form is needed. The condition: at least 90% of the tax owed has to be paid by May 1. If you expect a balance, send it in with Form 760IP before the deadline.14Virginia Department of Taxation. Form 760IP – Virginia Automatic Extension Payment Voucher for Individuals
File within the extension window with less than 90% paid, and Virginia charges an extension penalty of 2% per month on the unpaid balance, capped at 12%. File more than six months late and the penalty rises to 6% per month, capped at 30%. Interest accrues on unpaid tax in either case, at the federal underpayment rate plus 2%.15Virginia Tax. Penalties and Interest
Estimated Payments During the Year
If your expected Virginia tax after withholding and credits will top $150, you owe quarterly estimated payments.16Virginia Tax. Individual Estimated Tax Payments This catches nonresidents with rental or business income where nothing is withheld at the source. Due dates run May 1, June 15, September 15, and January 15 of the following year. Payments go on Form 760ES and can be submitted electronically. A $35 fee applies if the bank declines the payment.17Virginia Department of Taxation. Form 760ES – Virginia Estimated Income Tax Payment Vouchers Skipping quarters can trigger an underpayment penalty when you file.
How to File and Pay
Virginia encourages electronic filing, and most commercial tax software supports Form 763. E-filed returns with direct deposit typically produce refunds within one to four weeks.
Paper filers mail the completed return with all schedules, a full copy of the federal return, W-2s, and any other supporting documents to:
Virginia Department of Taxation
P.O. Box 1498
Richmond, VA 23218-149818Virginia Department of Taxation. Virginia Special Nonresident Claim for Individual Income Tax Withheld
If you owe, pay electronically through the Virginia Tax website by bank debit or credit card. For paper payments, make the check or money order payable to “Virginia Department of Taxation” and write your Social Security number and the tax year on it. Paper returns generally take around eight weeks to process, and missing documents will hold things up until the Department sends a notice.