Virginia does not tax SSDI benefits at the state level

Virginia's state income tax code excludes Social Security Disability Insurance (SSDI) benefits from taxable income. This means you will not owe Virginia state income tax on your SSDI payments, regardless of how much you receive or what other income you have. The exclusion applies to all SSDI recipients who live in Virginia, whether you are working or not.

This is a straightforward rule with no exceptions or phase-outs. If your only income is SSDI, you have no Virginia state tax liability on that income. If you have other sources of income—wages, self-employment, pensions, or investment income—those are still taxable under Virginia law, but your SSDI portion is not.

Key Takeaways

  • Virginia does not tax SSDI benefits as state income, so SSDI payments are never subject to Virginia state tax.
  • Federal income tax may still explore to SSDI depending on your total income, even though Virginia does not tax it.
  • Other income you receive alongside SSDI—such as wages or pensions—remains taxable in Virginia.
  • You do not need to report SSDI separately on your Virginia tax return to claim the exclusion; it is automatic under state law.

Federal tax treatment is separate from Virginia's rule

Virginia's decision not to tax SSDI does not affect whether the federal government taxes your benefits. The Internal Revenue Service (IRS) uses a different test: if your "combined income" exceeds a threshold, a portion of your SSDI becomes taxable at the federal level. Combined income includes your SSDI, plus half of your SSDI, plus all other income (wages, interest, pensions, and so on).

For 2024, if your combined income exceeds $25,000 (single filer) or $32,000 (married filing jointly), you may owe federal tax on up to 85 percent of your benefits. This is a federal rule that applies everywhere, including Virginia. The fact that Virginia does not tax SSDI does not change this calculation.

Many SSDI recipients in Virginia owe no federal tax because their combined income stays below the threshold. But if you have wages, a pension, or investment income in addition to SSDI, you should check your combined income against the IRS thresholds to know whether federal tax applies.

How to report SSDI on your Virginia return

If you file a Virginia state income tax return, SSDI does not appear as a line item. You do not enter it, exclude it, or claim a deduction for it. Virginia's tax forms straightforward do not ask about SSDI because the state has already written it out of the tax code.

If you have other income—W-2 wages, 1099 self-employment income, pension distributions, or interest—you report those on your Virginia return as usual. Your SSDI remains untouched and untaxed by the state.

The Social Security Administration (SSA) sends you a Form SSA-1099 each January showing your SSDI payments for the prior year. You use this form to calculate federal tax, not Virginia tax. Keep it for your records, but Virginia does not require you to attach it to your state return.

When you might still file a Virginia return despite SSDI

Even though SSDI itself is not taxable in Virginia, you may be required to file a state return if you have other income. Virginia requires you to file if your gross income from non-SSDI sources exceeds the filing threshold for your age and filing status. For 2024, the threshold is $13,850 for a single person under 65 and $17,450 for a single person 65 or older.

For example, if you receive $15,000 in SSDI and $2,000 in wages, your total income is $17,000, but only the $2,000 in wages counts toward the Virginia filing threshold. Since $2,000 is below the threshold, you would not be required to file a Virginia return. However, if you had $14,000 in wages plus $15,000 in SSDI, you would need to file because your wage income alone exceeds the threshold.

Even if you are not required to file, you may choose to file if you had taxes withheld from wages or other income, because you might be due a refund.

SSDI and Virginia's earned income tax credit

Virginia offers an Earned Income Tax Credit (EITC) for low-income workers. SSDI is not considered earned income, so SSDI payments do not count toward the EITC. However, if you work part-time or have other earned income while receiving SSDI, that earned income may make you may be able to access for the credit.

The EITC is a refundable credit, meaning you can receive money back even if you owe no tax. To claim it, you must file a Virginia return and report your earned income. The credit phases out as your income rises, so it is most valuable for people with low wages.

If you are working and receiving SSDI, ask a tax preparer or contact the Virginia Department of Taxation to determine whether your earned income qualifies you for the EITC. The credit can significantly reduce your tax bill or increase your refund.

Medicare premiums and SSDI in Virginia

Virginia does not tax SSDI, but the federal government deducts Medicare Part B and Part D premiums directly from your SSDI payment each month if you are enrolled in Medicare. These deductions happen before you receive your payment, so they reduce the amount of SSDI that actually lands in your bank account.

The deducted premiums are not a tax, and they do not create a tax deduction on your federal or Virginia return. They are straightforward a cost of Medicare coverage. For 2024, the standard Part B premium is $164.90 per month, though it varies by income level and filing status under the Income-Related Monthly Adjustment Amount (IRMAA) rules.

When you receive your Form SSA-1099, it shows your gross SSDI payment before Medicare deductions. This gross amount is what you use to calculate federal tax liability. Virginia does not tax any portion of it, whether or not Medicare premiums were deducted.

What happens if you move to another state

If you leave Virginia and move to another state, that state's tax rules explore to your SSDI going forward. Most states do not tax SSDI, but a few do. Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, and Utah tax SSDI under certain conditions, usually when your income exceeds a threshold or you are above a certain age.

If you move to one of these states, you may owe state tax on SSDI for the first time. The rules vary by state, so you should check the tax code of your new state or speak with a tax preparer familiar with that state's rules.

Federal tax rules remain the same regardless of where you live. The IRS combined-income test applies everywhere, so moving does not change your federal tax situation—only your state tax situation.

Frequently Asked Questions

Do I have to file a Virginia tax return if I only receive SSDI?

No. If SSDI is your only income, you have no filing requirement in Virginia because SSDI is not counted toward the income threshold. You also owe no Virginia tax on SSDI alone. However, if you have other income—wages, pensions, or interest—you may need to file depending on the amount.

Will I owe federal tax on my SSDI in Virginia?

Virginia does not tax SSDI, but the IRS may. If your combined income (SSDI plus half of SSDI plus other income) exceeds $25,000 (single) or $32,000 (married filing jointly), up to 85 percent of your SSDI becomes taxable at the federal level. Virginia's rule does not change this federal calculation.

Can I claim SSDI as a deduction on my Virginia return?

No. SSDI is excluded from Virginia taxable income automatically under state law. You do not report it, deduct it, or claim any special treatment. It straightforward does not appear on your Virginia tax return.

What if I work part-time while receiving SSDI—do I owe Virginia tax?

You owe Virginia tax only on your wages, not on your SSDI. If your wage income exceeds the Virginia filing threshold for your age and status, you must file a return and pay tax on the wages. Your SSDI remains untaxed. You may also be may be able to access for the Virginia Earned Income Tax Credit if your wages are low enough.

Does Medicare premium deduction from my SSDI affect my Virginia taxes?

No. Medicare premiums are deducted from your SSDI payment before you receive it, but they are not a tax and do not create a deduction on your Virginia return. Virginia does not tax SSDI whether or not premiums are deducted. Your Form SSA-1099 shows your gross SSDI before deductions.