Virginia tax exemptions fall into a handful of distinct programs: a mandatory real estate and vehicle exemption for 100-percent disabled veterans, a locally run property tax relief program for seniors and people with permanent disabilities, several income tax subtractions aimed at retirees and military members, a sales and use tax exemption for qualifying nonprofits, and the absence of any state estate or inheritance tax. Each program has its own eligibility rules and its own application path, so the right next step depends on which exemption fits your situation.
Property Tax Exemption for Disabled Veterans
Virginia’s Constitution requires every city and county to exempt from real property tax the principal residence of a veteran with a 100-percent service-connected, permanent, and total disability rated by the U.S. Department of Veterans Affairs.1Virginia Code Commission. Constitution of Virginia Article X Section 6-A This is not a local option. If you qualify, your locality must grant the exemption.
The exemption covers the dwelling and up to one acre of surrounding land. If your locality already allows more acreage under its senior or disability relief program, you get the same larger amount. A manufactured home qualifies even when the veteran does not own the land underneath it, though in that case the land itself remains taxable.2Virginia Code Commission. Virginia Code 58.1-3219.5 – Exemption From Taxes on Property for Disabled Veterans You must occupy the property as your principal residence.
Surviving Spouses
A surviving spouse keeps the exemption if the veteran died on or after January 1, 2011, and the spouse has not remarried. The surviving spouse is not locked into the original home; Virginia law lets the spouse move to a different principal residence and carry the exemption. It also reaches property held in certain trusts or life estates.2Virginia Code Commission. Virginia Code 58.1-3219.5 – Exemption From Taxes on Property for Disabled Veterans
Vehicle Tax
A separate exemption removes the personal property tax on one motor vehicle owned by or used primarily for a qualifying veteran. Only a passenger car or pickup truck registered for personal use counts. If the veteran is married, either spouse’s qualifying disability supports the exemption on a jointly owned vehicle. This benefit does not pass to a surviving spouse; it ends at the veteran’s death.3Virginia Department of Veterans Services. Tax Exemptions
How to Claim It
File an affidavit or written statement with the Commissioner of the Revenue in the locality where the property sits. Bring the VA rating letter confirming the 100-percent service-connected, permanent, and total disability, and a DD-214 showing your active service. Surviving spouses add documentation of the date of the veteran’s death.4Virginia Code Commission. Virginia Code Article 2.3 – Exemption for Disabled Veterans – Section 58.1-3219.6 The vehicle exemption uses a similar path through your locality, which may have its own form.
Property Tax Relief for Seniors and People With Disabilities
Each Virginia county and city decides on its own whether to offer real property tax relief to residents who are 65 or older or who have a permanent and total disability. The program is not required by state law, so where you live determines whether it exists and how generous it is.5Virginia Code Commission. Virginia Code 58.1-3210 – Exemption or Deferral of Taxes on Property of Certain Elderly Individuals and Individuals With Disabilities The property must be owned by and serve as the sole dwelling of the person claiming relief.
Localities that adopt the program set their own income and net worth limits. The income test generally combines income from all owners and most relatives living in the home, though localities can exclude certain sources. Where a net worth cap applies, it looks at the combined worth of the owners and their spouses, and localities can carve out specific assets.6Virginia Code Commission. Virginia Code Article 2 – Exemptions for Elderly and Handicapped – Section 58.1-3212
Relief can take three forms depending on the local ordinance: a full exemption, a partial exemption that reduces the bill, or a deferral that postpones taxes until the property is sold or transferred. Some localities offer a mix. Because the thresholds vary so widely, the only reliable way to check is to call your local Commissioner of the Revenue.
Applications are annual. You file with the Commissioner of the Revenue or another local officer designated for the program, submitting an affidavit of income, net worth, and relatives living in the home.7Virginia Code Commission. Virginia Code Article 2 – Exemptions for Elderly and Handicapped – Section 58.1-3213 Federal tax returns, bank statements, and a physician’s affidavit for disability claims are commonly required. Miss the deadline in a given year and you pay the full tax for that year, even if you qualified the year before.
Income Tax Subtractions and Deductions
Virginia’s individual income tax starts with your federal adjusted gross income and then applies its own deductions and subtractions. Several of them target retirees, older taxpayers, and military members, and they come off directly on your Virginia return. No separate application.
Age Deduction
Virginians born on or before January 1, 1939, get a flat $12,000 deduction from Virginia taxable income regardless of what they earn. Taxpayers born after that date who have reached age 65 also qualify for a $12,000 deduction, but it phases out dollar-for-dollar once federal adjusted gross income (after removing Social Security) exceeds $50,000 single or $75,000 married. The deduction reaches zero at $62,000 single or $87,000 married.8Virginia Code Commission. Virginia Code 58.1-322.03 – Virginia Taxable Income; Deductions Social Security income does not count toward that phase-out threshold.
Social Security
Virginia fully exempts Social Security benefits. Any amount included in your federal adjusted gross income under the federal taxation rules for Social Security gets subtracted back out on the Virginia return. Railroad Retirement Tier 1 and Tier 2 benefits get the same treatment. There is no income cap or phase-out on this subtraction.9Virginia Code Commission. 23VAC10-110-142 – Virginia Taxable Income; Subtractions
Military Pay and Retirement
Several subtractions cover service members and veterans, each with its own rule:10Virginia Code Commission. Virginia Code 58.1-322.02 – Virginia Taxable Income; Subtractions
- Military pay and allowances earned in a federally designated combat zone or qualified hazardous duty area are fully subtracted.
- Service members on active duty more than 90 days can subtract up to $15,000 of basic pay, phasing out dollar-for-dollar above $15,000 and reaching zero at $30,000.
- Veterans and surviving spouses age 55 or older can subtract up to $40,000 of military retirement income and related benefits for tax years beginning on or after January 1, 2025.
- Military retirement income received by a Congressional Medal of Honor recipient is fully exempt with no dollar cap, though this applies only to military retirement income, not to all income the recipient earns.
- Virginia National Guard members at rank O-3 and below can subtract up to $3,000 or income from 39 days of service, whichever is less.
The $40,000 military retirement subtraction cannot be stacked with the Medal of Honor subtraction or any other Virginia exemption on the same income.
Keep W-2s, military pay statements, VA benefit letters, and Social Security statements with your tax records in case Virginia asks for support.
Sales Tax Exemption for Nonprofit Organizations
Qualifying nonprofits can buy goods free of Virginia sales and use tax after obtaining a certificate of exemption from the Virginia Department of Taxation. Eligible groups include organizations exempt from federal income tax under Section 501(c)(3), Section 501(c)(4) organized for a charitable purpose, and Section 501(c)(19) veterans’ organizations. Smaller entities with annual gross receipts under $5,000 can qualify if organized for one of those purposes, even without a formal IRS determination letter.11Virginia Code Commission. Virginia Code 58.1-609.11 – Exemptions for Nonprofit Entities
Virginia layers its own accountability on top of the IRS designation. The organization’s annual administrative costs, including salaries and fundraising, cannot exceed 40 percent of gross revenue. Organizations with gross annual revenue of $750,000 or more must provide a financial review by an independent CPA. At $1.5 million in revenue, the Department of Taxation can require a full financial audit. Falling short of these standards can cost the organization its certificate.
The organization must also comply with all applicable Virginia solicitation laws and verify that compliance in the application. The exemption covers purchases of tangible personal property for the organization’s own use, not items bought on behalf of individual members for personal benefit. Apply online through the Department of Taxation’s nonprofit exemption portal, submit proof of federal tax-exempt status, financial statements showing the 40-percent administrative cost compliance, and the solicitation law verification. If approved, you receive a certificate that covers a set period and must be renewed. Present the certificate to vendors at the point of sale.
No State Estate or Inheritance Tax
Virginia imposes no state estate tax and no inheritance tax. The former Virginia estate tax was tied to the federal credit for state death taxes, and after Congress eliminated that credit, Virginia’s estate tax was effectively repealed as of July 1, 2007.12Virginia Tax. Estate and Inheritance Taxes One narrow legacy inheritance tax may still reach certain remainder interests, but it affects very few estates.
Federal estate tax is a separate matter. For someone who dies in 2026, a federal estate tax return is required if the gross estate exceeds $15,000,000.13Internal Revenue Service. Estate Tax Estates below that threshold owe nothing at the federal level and nothing to Virginia.