State and local taxes for retirees

By Joseph Hight


Virginia gets a mixed rating
Some states offer tax breaks for retirees. And many states exempt Social Security retirement benefits from income taxation, while some states go further. Arizona, considered a tax-friendly state for those who have retired, exempts civil service retirement income from the state’s income tax. Virginia gets a “mixed” rating on Kiplinger.com, which offers a state-by-state guide to taxes for retirees. Social Security income is not taxed in Virginia, and the state offers an extra tax exemption for seniors aged 65 and over that can be as high as $12,000 annually. Taxpayers born before 1939 get the full $12,000 deduction; for those born after 1939, the deduction begins to decline for those with annual incomes above $50,000 ($75,000 for spouses filing jointly). The deduction is reduced by $1 for every $1 of income above those levels.

NoVA counties provide tax relief for some seniors
Property taxes in Virginia are local, administered by the state’s cities, counties and towns. In 2010, Forbes.com posted median annual property taxes and home values in a sample of counties in the United States. Three NoVA counties—Loudoun, Fairfax and Arlington—were on the list with high median home values and high median property tax bills. For example, the Fairfax County median annual property tax was $4,616 on a median home value of $556,100. Some NoVA counties provide property tax relief for seniors who meet certain income limits. Fairfax County provides 100 percent property tax relief for seniors aged 65 or over whose annual gross income is less than $52,000. The tax relief declines in three steps to 25 percent of the tax bill for seniors who earn between $62,000 and $72,000 per year, where it phases out. Check local tax departments for property tax relief that may be available to seniors.

Maxx-Studio/Shutterstock.com (house); DVARG/Shutterstock.com (calculator); Rido/Shutterstock.com (couple)

Retirement in Northern Virginia

(February 2015)