Roth Conversion in Virginia
A Roth conversion in Virginia is taxed by the Commonwealth as ordinary income in the year you convert, at a graduated rate that tops out at 5.75% on taxable income above $17,000 (Source: Tax Foundation 2026 Virginia profile, taxfoundation.org/location/virginia). Because that top bracket starts so low, essentially every dollar of a meaningful conversion is taxed at 5.75% at the state level, on top of federal tax.
A Virginia resident who converts $100,000 from a traditional IRA to a Roth generally owes about $5,750 in Virginia income tax on it (5.75%), before any federal tax. For residents 65 and older, the true cost can run higher because the conversion inflates income and phases out Virginia’s age deduction of up to $12,000 per person (Source: tax.virginia.gov, Virginia Taxes and Your Retirement, 2026).
Does Virginia tax a Roth conversion?
Yes. Virginia begins its income tax calculation from your federal adjusted gross income, and a traditional-to-Roth conversion flows into that figure as ordinary income. Virginia has no conversion-specific exclusion, so the converted amount is taxed at graduated rates reaching 5.75% (Source: tax.virginia.gov, Virginia Taxes and Your Retirement, 2026). The only offset is the income-tested age deduction, which a sizable conversion usually erases.
The conversion is taxed by the state where you legally reside in the conversion year. If you convert while domiciled in Virginia, Virginia taxes it. Federal law (4 U.S.C. 114) bars a former state from taxing that same retirement income once you have moved. For the mechanics of sizing a conversion, see our guide on how much to convert to a Roth and the underlying Roth conversion planning service.
Virginia retirement income tax rate and the 5.75% bracket for retirees
Virginia levies a graduated income tax with four brackets, unchanged for 2026, and no county or local income tax anywhere in the state (Source: Tax Foundation 2026 Virginia profile, taxfoundation.org/location/virginia). The 5.75% top rate begins at just $17,000 of taxable income, so for most retirees the state tax behaves like a near-flat 5.75% on pension, IRA, and conversion income.
| Virginia taxable income (2026) | Marginal rate |
|---|---|
| First $3,000 | 2% |
| $3,001 to $5,000 | 3% |
| $5,001 to $17,000 | 5% |
| Over $17,000 | 5.75% |
A retiree with a modest pension and any IRA withdrawal is already well past $17,000, so any Roth conversion stacked on top is taxed at the full 5.75% Virginia rate (Source: Virginia Form 760 rate schedule; Tax Foundation 2026 Virginia profile, 2026).
Does Virginia tax Social Security benefits?
No. Virginia does not tax Social Security retirement benefits, nor Tier 1 Railroad Retirement benefits; any federally taxed portion is subtracted on your Virginia return (Source: tax.virginia.gov, Subtractions and Virginia Taxes and Your Retirement, 2026). Excluded Social Security keeps your Virginia taxable income lower, but it does not shield the conversion itself, which remains fully taxable. Compare with our national overview of the taxation of Social Security benefits in 2026.
Does Virginia tax 401(k), IRA, and pension withdrawals?
Yes. Virginia taxes distributions from traditional IRAs, 401(k), 403(b), and both public and private pensions as ordinary income at rates up to 5.75%, even pensions earned in another state (Source: tax.virginia.gov, Virginia Taxes and Your Retirement, 2026). Virginia is not a Pennsylvania-style state that exempts retirement-plan withdrawals. The only retirement relief for most residents is the age deduction described below, not a distribution exemption.
Does Virginia tax Roth IRA distributions?
Qualified Roth IRA distributions are generally not taxed by Virginia, because the contributions and converted amounts were already taxed and the account has met the federal qualification rules (Source: tax.virginia.gov, Virginia Taxes and Your Retirement, 2026). In concept, converting means paying Virginia’s 5.75% now so that later qualified withdrawals are not taxed by Virginia; whether that trade is worthwhile depends on the upfront tax paid, time horizon, and future rates (see our break-even analysis). See our Roth conversion break-even analysis for how long that trade takes to pay off.
Virginia age deduction 2026 and its income phase-out limit
Virginia’s age deduction lets residents 65 and older subtract up to $12,000 each. Those born on or before January 1, 1939 take the full $12,000 regardless of income. Everyone else faces an income test: the deduction drops $1 for every $1 that adjusted federal AGI (AFAGI) exceeds $50,000 single or $75,000 married, reaching zero at $62,000 single and $99,000 for a couple where both spouses claim $12,000 (Source: Va. Code 58.1-322.03; tax.virginia.gov Subtractions, 2026).
| Filing status (born after 1/1/1939, age 65+) | Full $12,000 deduction if AFAGI at or below | Deduction begins phasing out | Deduction fully gone at AFAGI of |
|---|---|---|---|
| Single | $50,000 | above $50,000 | $62,000 |
| Married, both spouses 65+, combined (up to $12,000 each = $24,000) | $75,000 | above $75,000 | $99,000 |
AFAGI is federal AGI, adjusted for Virginia conformity, reduced by any taxable Social Security and Tier 1 Railroad benefits (Source: Va. Code 58.1-322.03, law.lis.virginia.gov, 2026). Because a Roth conversion raises AFAGI directly, it is the single fastest way to push a 65-plus household through this phase-out.
What a $100,000 Roth conversion actually costs a Virginia couple: the age-deduction interaction
This interaction is easy to overlook. The headline rate on a conversion is 5.75%, but for a household aged 65-plus in the phase-out band, each dollar of conversion income both gets taxed and destroys age-deduction dollars that then become taxable too. The result is a hidden Virginia marginal rate well above 5.75%. The table below is illustrative, using 2026 rules and rounded figures.
| Illustrative case: married couple, both 66, Virginia residents, 2026 | Amount |
|---|---|
| Pre-conversion AFAGI (pension plus IRA withdrawal; Social Security excluded) | $60,000 |
| Age deduction available before conversion ($12,000 each) | $24,000 |
| Roth conversion added to income | $100,000 |
| New AFAGI after conversion | $160,000 |
| Age deduction after conversion (past the $99,000 point) | $0 |
| Age deduction lost, now also taxable | $24,000 |
| Extra Virginia taxable income caused by the conversion | $124,000 |
| Virginia rate applied | 5.75% |
| Estimated Virginia tax attributable to the conversion | ~$7,130 |
| Effective Virginia rate on the $100,000 conversion | ~7.1% (not 5.75%) |
The extra roughly $1,380 (5.75% of the lost $24,000 deduction) is the age-deduction cost that stated-rate math ignores. Inside the phase-out band itself the effect is sharper: for a single filer between $50,000 and $62,000 of AFAGI, each added conversion dollar is taxed and strips a deduction dollar, an effective Virginia marginal rate near 11.5% on that band (2 times 5.75%); for a couple where both deductions phase out, the compounding can push the band rate higher still. Figures are illustrative, not a projection for any individual.
Mechanically, keeping AFAGI at or below the $50,000 single or $75,000 married threshold preserves the full age deduction, while a conversion that runs past it trades the deduction for a smaller future traditional balance ahead of RMDs at 73. Which pattern fits a given household depends on its full picture; this describes how the rule behaves and is not a recommendation. Our state-by-state Roth conversion tax guide shows how this compares to other states.
Rothology® Premier Roth Conversion
A flat-fee, fiduciary Roth conversion planning service: a multi-year conversion plan and tax projections that account for your state. Educational conversation first; no products sold.
Virginia military retirement subtraction, uncapped for 2026
Beginning with tax year 2026, Virginia’s Military Benefits Subtraction is uncapped: the full amount of military retirement pay and Survivor Benefit Plan payments may be subtracted, with no $40,000 limit and no age requirement (Source: tax.virginia.gov/military-benefits-faq, 2026). The $40,000 cap applied only to tax year 2025. For a service member weighing a conversion, this subtraction lowers AFAGI, which can preserve more of the age deduction and leave room to convert under the phase-out thresholds.
Virginia estate tax 2026 and inheritance tax
Virginia has no estate tax and no inheritance tax. The state estate tax was effectively repealed for deaths on or after July 1, 2007, when the federal state-death-tax credit it was tied to disappeared (Source: tax.virginia.gov/estate-and-inheritance-taxes, 2026). Only the federal estate tax remains, applying above $15 million per person in 2026 under the One Big Beautiful Bill Act (Source: IRS; OBBBA 2025).
Because there is no state death tax, heirs inherit a Roth with no Virginia estate or inheritance tax layered on the account. See our note on the 2026 estate tax exemption.
Residency and timing: a Roth conversion before moving from Virginia
Because Virginia taxes a conversion only if you are a resident when you convert, timing relative to a move matters. A resident who converts while domiciled in Virginia pays the 5.75% state tax; the same conversion done after establishing residency in a no-income-tax state such as Florida, Tennessee, or Texas would carry no state income tax, and 4 U.S.C. 114 stops Virginia from reaching back (Source: 23 VAC 10-110-40; 4 U.S.C. 114, 2026).
The reverse also holds: if you plan to stay in Virginia through retirement, converting while the current top rate is 5.75% means today’s rate applies to the converted amount; future Virginia rates could be higher or lower, which affects whether converting earlier is advantageous. Part-year residents are taxed as residents only for the Virginia portion of the year, and a conversion is attributed to the period of residence. This is factual, not a recommendation to relocate; the right move depends on your full picture. Our overview of moving to a tax-friendly state in retirement covers the tradeoffs.
Is Virginia tax-friendly for retirees?
Virginia is moderately tax-friendly for retirees. It exempts Social Security, fully exempts military retirement from 2026, levies no estate or inheritance tax, and caps its top income rate at 5.75% with no local income tax (Source: tax.virginia.gov; Tax Foundation, 2026). Against that, it fully taxes pension, 401(k), and IRA income and offers only a modest, income-tested age deduction.
Property tax is relatively low, at roughly a 0.78% effective rate on owner-occupied housing value, with local senior relief and deferral programs (Source: Tax Foundation 2026 Virginia profile, taxfoundation.org/location/virginia). The state sales tax rate is 4.3%, and a mandatory 1% local add-on brings the statewide minimum to 5.3% (Source: Virginia Department of Taxation, Retail Sales and Use Tax, tax.virginia.gov, 2026). For a Roth conversion specifically, the 5.75% income-tax ceiling is lower than in many states, and once converted, qualified Roth withdrawals are not taxed by Virginia. The watch item is the age deduction phase-out, which a large conversion erodes.
How Rothology plans a Roth conversion for Virginia residents
Q3 Advisors is a fiduciary registered investment adviser that sells no insurance or investment products. The Rothology Premier Roth Conversion service is a flat-fee engagement built around a multi-year conversion plan and tax projections that model your specific state, Virginia in this case. The work is educational and analytical, not a product sale.
For a Virginia household, the modeling accounts for Virginia-specific items:
- The 5.75% top rate reached at just $17,000, so conversion income is projected at that marginal rate.
- The age-deduction phase-out at $50,000 single or $75,000 married AFAGI, sizing each year’s conversion around the cliff where sensible.
- Social Security and, from 2026, uncapped military retirement subtractions that lower baseline AFAGI.
- Federal interactions that still hit Virginia filers, including RMDs at 73 or 75, the pro-rata rule, the 5-year rule, and Medicare IRMAA surcharges.
- Any planned change of residence, so conversions are timed against a possible move.
The output is a year-by-year schedule you can act on, reviewed as tax law and your income change.
Frequently asked questions
Does Virginia tax Roth conversions?
Yes. Virginia treats a traditional-to-Roth conversion as ordinary income in the conversion year because it starts from your federal AGI, which includes the converted amount. It is taxed at graduated rates topping out at 5.75%, with no conversion-specific exclusion (Source: tax.virginia.gov, Virginia Taxes and Your Retirement, 2026). Only the income-tested age deduction can offset part of it, and a large conversion usually phases that out.
How much tax will I pay on a Roth conversion in Virginia?
For most retirees, roughly 5.75% of the converted amount at the state level, so about $5,750 on a $100,000 conversion, before federal tax (Source: Tax Foundation 2026 Virginia profile, 2026). If you are 65 or older and the conversion pushes your AFAGI past $50,000 single or $75,000 married, losing the age deduction can raise the effective Virginia cost to around 7% or more. Figures are illustrative.
Does Virginia tax Social Security retirement benefits?
No. Virginia does not tax Social Security or Tier 1 Railroad Retirement benefits, and it subtracts any federally taxed portion on the Virginia return (Source: tax.virginia.gov Subtractions, 2026). Excluded Social Security also lowers the AFAGI used for the age-deduction income test, which can leave more room to convert before the deduction phases out.
What is Virginia’s age deduction and how does it phase out?
Residents 65 and older may deduct up to $12,000 each. Those born on or before January 1, 1939 get the full amount regardless of income; everyone else loses $1 of deduction for every $1 that AFAGI exceeds $50,000 single or $75,000 married, reaching zero at $62,000 single and $99,000 for a couple where both claim $12,000 (Source: Va. Code 58.1-322.03; tax.virginia.gov, 2026). A Roth conversion raises AFAGI and can erase it.
Does Virginia tax 401(k) and traditional IRA withdrawals?
Yes. Virginia taxes traditional IRA, 401(k), 403(b), and pension distributions as ordinary income at up to 5.75%, including pensions earned in other states (Source: tax.virginia.gov, Virginia Taxes and Your Retirement, 2026). Virginia offers no blanket retirement-income exemption; the age deduction is the only general relief. Qualified Roth IRA distributions, by contrast, are generally not taxed by Virginia.
Does Virginia tax military retirement pay?
Not from 2026. Virginia’s Military Benefits Subtraction is uncapped for tax year 2026 and later, so the full amount of military retirement and Survivor Benefit Plan pay can be subtracted, with no $40,000 cap and no age requirement (Source: tax.virginia.gov/military-benefits-faq, 2026). Lowering that income also helps preserve the age deduction when planning a conversion.
Does Virginia have an estate or inheritance tax?
No. Virginia has neither an estate tax nor an inheritance tax; the state estate tax was effectively repealed for deaths on or after July 1, 2007 (Source: tax.virginia.gov/estate-and-inheritance-taxes, 2026). Only the federal estate tax applies, above $15 million per person in 2026 under the One Big Beautiful Bill Act. Heirs receiving a Roth account face no Virginia death tax on it.
Sources
- Virginia Department of Taxation, Virginia Taxes and Your Retirement, tax.virginia.gov (2026)
- Virginia Department of Taxation, Subtractions, tax.virginia.gov/subtractions (2026)
- Virginia Department of Taxation, Military Benefits Subtraction FAQ, tax.virginia.gov/military-benefits-faq (2026)
- Virginia Department of Taxation, Estate and Inheritance Taxes, tax.virginia.gov/estate-and-inheritance-taxes (2026)
- Virginia Department of Taxation, Retail Sales and Use Tax (4.3% state rate plus 1% mandatory local), tax.virginia.gov/retail-sales-and-use-tax (2026)
- Code of Virginia 58.1-322.03 (age deduction and phase-out) and 23 VAC 10-110-40 (part-year residents), law.lis.virginia.gov
- Virginia Form 760 instructions and Age Deduction Worksheet (2026 filing year)
- Tax Foundation, 2026 Virginia state tax profile, taxfoundation.org/location/virginia
- Federal: 4 U.S.C. 114 (state taxation of nonresident retirement income); IRS 2026 contribution and RMD figures; One Big Beautiful Bill Act (2025) $15 million estate/gift exemption