Military Retirement in Virginia: Complete 2026 Tax Guide
FULL exemption on retirement pay for age 55+, up to $20,000 exemption under 55
🎯 Quick Summary: Virginia Military Retirement Taxes (2026)
- ✓ Military retirement pay (55+): 100% tax-free at state level
- ✓ Military retirement pay (under 55): Up to $20,000 exemption
- ✓ VA disability payments: Tax-free (federal and state)
- ✓ Survivor Benefit Plan (SBP): Same exemptions as military retirement
- ✓ Property tax: Exemptions available for 100% disabled veterans
- ✓ Overall ranking: Top 10 most tax-friendly state for military retirees 55+
Why Virginia Is Excellent for Military Retirement
Virginia is one of the most military-friendly states in the nation, with a massive veteran population (over 730,000 veterans) and generous tax benefits for retirees age 55 and older. If you're 55+ when you retire, you'll pay zero state income tax on your entire military pension.
Virginia is home to the Pentagon, Naval Station Norfolk (world's largest naval base), Fort Belvoir, Quantico, and Langley AFB, giving you unmatched access to military bases, commissaries, VA healthcare, and a massive veteran community. The combination of tax benefits, military infrastructure, and quality of life makes Virginia a top choice for military retirees.
2026 Virginia Military Retirement Tax Breakdown
State Income Tax on Military Retirement Pay
🎉 Age 55+: 100% Tax-Free!
If you're age 55 or older, Virginia exempts ALL military retirement pay from state income tax. This is a full exemption with no dollar limit. Whether you receive $30,000 or $100,000+ in military retirement, you pay $0 in Virginia state tax on it.
📊 Under Age 55: Up to $20,000 Exemption
If you retire before age 55, Virginia allows you to subtract up to $20,000 of your military retirement income from state taxation (2026). Any amount over $20,000 is taxed at Virginia's income tax rates (2% to 5.75%).
VA Disability Compensation
✓ Completely Tax-Free
VA disability payments are tax-exempt at both the federal and Virginia state levels. Whether you receive 10%, 100%, or any rating in between, you keep every dollar.
Other Tax Benefits for Virginia Veterans (2026)
| Benefit | Details |
|---|---|
| Property Tax Exemption |
|
| Sales Tax | 4.3% state sales tax plus 1-1.7% local tax (5.3%-6% total). No special veteran exemption, but applies to all residents equally. |
| Vehicle Property Tax | Personal property tax on vehicles. Some localities offer exemptions for 100% disabled veterans. Check your city/county. |
| State Park Access | Veterans with 100% service-connected disability get free Virginia State Parks pass. |
Real Example: How Much You'll Save in Virginia (2026)
Let's compare a military retiree in Virginia vs. a state with no exemptions:
Example Scenario: O-4 Retired After 20 Years (Age 58)
- • Military retirement pay: $3,500/month ($42,000/year)
- • VA disability (50%): $1,076/month ($12,912/year)
- • Part-time civilian job: $35,000/year
- • Total annual income: $89,912
Virginia (Age 55+ Exemption)
Taxable income: $35,000 (civilian job only)
$42,000 military retirement: 100% exempt
$12,912 VA disability: Tax-free
State tax: ~$1,500
State With No Exemption (6% rate)
Taxable income: $77,000 (retirement + civilian)
No military retirement exemption
VA disability still tax-free
State tax: ~$4,600
Annual Virginia Savings: $3,100+
Over 20 years of retirement: $62,000+ saved
Cost of Living in Virginia for Military Retirees (2026)
Virginia's cost of living is approximately 4% above the national average, but varies significantly by region:
| Category | Virginia vs. National Average | Notes |
|---|---|---|
| Housing | +8% more expensive | Median home price: $410,000 (2026). Northern VA significantly higher ($600K+), Hampton Roads closer to $350K. |
| Groceries | +3% more expensive | Commissary access saves 20-30% for eligible retirees. |
| Healthcare | Similar to average | 10 VA medical centers + TRICARE network widely accepted. |
| Transportation | +5% more expensive | Northern VA has Metro rail. Hampton Roads is car-dependent. Gas prices near national average. |
| Utilities | Similar to average | Moderate heating/cooling costs. Four seasons climate. |
Major Military Installations in Virginia
Virginia hosts some of the most important military installations in the world, across all service branches:
🏰 Army
- Fort Belvoir - Fairfax County - Army logistics hub
- Pentagon - Arlington - DoD headquarters
- Fort Gregg-Adams - Petersburg - Sustainment center
✈️ Air Force
- Langley AFB - Hampton - ACC headquarters, F-22s
- Joint Base Langley-Eustis - Combined installation
⚓ Navy & Marines
- Naval Station Norfolk - World's largest naval base
- Marine Corps Base Quantico - "Crossroads of the Marine Corps"
- NAS Oceana - Virginia Beach - Master jet base
- Dam Neck - Virginia Beach - Training facility
🎖️ Other
- Coast Guard Training Center Yorktown
- Pentagon - All service branches
Best Cities in Virginia for Military Retirees (2026)
| City/Area | Nearby Base | Median Home Price | Why It's Great |
|---|---|---|---|
| Virginia Beach | NAS Oceana, Dam Neck | $385,000 | Beach lifestyle, massive veteran community, great schools, outdoor recreation |
| Chesapeake | Norfolk Naval Base | $360,000 | More affordable than VB, family-friendly, Great Bridge area popular |
| Hampton/Newport News | Langley AFB, Fort Eustis | $310,000 | Most affordable Hampton Roads, shipbuilding jobs, history |
| Fredericksburg | Quantico, Pentagon | $425,000 | Between DC and Richmond, historic town, I-95 corridor |
| Fairfax County | Pentagon, Fort Belvoir | $650,000 | Defense contractor jobs, top schools, Metro access (expensive) |
VA Healthcare & Resources in Virginia
Virginia has 10 VA medical centers and hospitals serving over 730,000 veterans:
- Hampton VA Medical Center - Full services for Hampton Roads area
- Richmond VA Medical Center (McGuire) - Major teaching hospital
- Salem VA Medical Center - Serves southwest Virginia
- Washington DC VA Medical Center - Serves Northern Virginia
- Multiple outpatient clinics - Including Virginia Beach, Alexandria, Fredericksburg, Charlottesville
- Commissaries at all major bases - Save 20-30% on groceries
🎓 Education Benefits for Veterans & Families in Virginia
Virginia offers excellent education benefits for veterans and their families, including unique programs for dependents of disabled and fallen service members. These benefits can save military families tens of thousands of dollars in college tuition costs.
Virginia Military Survivors and Dependents Education Program (VMSDEP)
FREE Tuition for Dependents of KIA/100% Disabled Veterans
VMSDEP provides tuition waivers to spouses and children of veterans who were killed in action, died as a result of service, or are rated 100% permanently and totally disabled. This benefit can be worth $50,000-$100,000+ depending on the institution.
Who Qualifies for VMSDEP?
| Eligibility Category | Details |
|---|---|
| Veteran Status | Veteran must be Virginia resident, killed in action, died in service, MIA/POW, or 100% permanently and totally disabled |
| Spouse Eligibility | Must be admitted to Virginia public college/university as undergraduate or graduate student |
| Children Eligibility | Ages 16-29 (can be extended in certain cases); must maintain satisfactory academic progress |
| Benefits Covered | Tuition waiver at all Virginia public colleges and universities (8 years/full-time, longer if part-time) |
Virginia National Guard Tuition Assistance
Virginia National Guard members have access to state-funded education assistance in addition to federal benefits:
Virginia National Guard State Tuition Assistance Program (State TA)
- Up to $2,000 per year for eligible Guard members
- Can be combined with federal Tuition Assistance
- Covers tuition at Virginia public and private institutions
- Must maintain satisfactory military and academic performance
- Contact your unit's Education Services Officer for details
In-State Tuition for All Veterans
All veterans qualify for in-state tuition rates in Virginia
Under Virginia law, all military veterans using VA education benefits (GI Bill, VR&E, etc.) are automatically eligible for in-state tuition rates at Virginia public colleges and universities, regardless of residency status. This can save veterans thousands per year compared to out-of-state rates.
Yellow Ribbon Program Schools in Virginia
For veterans using the Post-9/11 GI Bill at private universities, the Yellow Ribbon Program can cover tuition costs above the GI Bill cap. Virginia has many participating schools:
Top Yellow Ribbon Schools
- University of Virginia - Full tuition coverage
- Virginia Tech - Full tuition coverage
- George Mason University - Generous awards
- Liberty University - Significant funding
- William & Mary - Full tuition coverage
How Yellow Ribbon Works
- School contributes a portion
- VA matches the school's contribution
- Combined with GI Bill = free tuition
- Must have 100% Post-9/11 GI Bill
- Contact school's VA office to apply
Virginia Community College System (VCCS)
The Virginia Community College System consists of 23 colleges across the state offering veteran-friendly programs:
- VET-TEC Programs: Technology training for veterans
- Transfer Agreements: Guaranteed admission pathways to 4-year Virginia universities
- Affordable Tuition: ~$5,000/year for in-state students (covered by GI Bill)
- Veterans Resource Centers: Dedicated support staff at each campus
- Credit for Military Training: ACE-recommended credit for military experience
How to Apply for Virginia Education Benefits
- VMSDEP: Apply through the Virginia Department of Veterans Services (DVS). Submit proof of veteran's disability/service and dependent relationship. Visit dvs.virginia.gov
- In-State Tuition: Submit VA Certificate of Eligibility to your school's registrar or VA certifying official.
- Yellow Ribbon: Contact the school's VA office directly - each school has its own application process.
- Virginia National Guard TA: Contact your unit's Education Services Officer.
- Questions? Call the Virginia Department of Veterans Services: 1-804-225-2083
Official Resources: DVS Education Benefits | VA Yellow Ribbon Search
Pros and Cons of Retiring in Virginia
✅ Pros
- • 100% state tax exemption on military retirement (55+)
- • Up to $20,000 exemption (under 55)
- • VMSDEP: Free tuition for dependents of KIA/100% disabled veterans
- • All veterans qualify for in-state tuition rates
- • Massive veteran population (730,000+)
- • World-class military installations
- • Pentagon, Norfolk Naval Base, Quantico nearby
- • Excellent VA healthcare (10 medical centers)
- • Defense contractor job opportunities
- • Four seasons climate (mild winters)
- • Beach access (Virginia Beach, Hampton Roads)
- • Strong education system
- • Historical sites & culture
⚠️ Cons
- • Cost of living 4% above national average
- • Northern Virginia extremely expensive
- • Vehicle property tax (annual)
- • State income tax on other income (2%-5.75%)
- • Traffic congestion (especially Northern VA, I-64)
- • Humid summers (80-90°F + humidity)
- • Hurricane risk (coastal areas)
- • Higher home prices near DC/Pentagon
- • Limited exemption if you retire before 55
Frequently Asked Questions
Does Virginia tax military retirement pay?
Virginia offers a full exemption on military retirement pay for retirees age 55 and older. For retirees under age 55, Virginia exempts up to $20,000 of military retirement income (2026). VA disability is always tax-free.
Does Virginia tax VA disability payments?
No. VA disability compensation is tax-free at both the federal and state levels nationwide, including Virginia.
What is the cost of living in Virginia for military retirees?
Virginia has a cost of living approximately 4% above the national average in 2026. Northern Virginia (Pentagon, Fort Belvoir area) is significantly more expensive, while Hampton Roads (Norfolk, Virginia Beach) is closer to the national average.
What major military bases are in Virginia?
Virginia hosts major installations including the Pentagon, Fort Belvoir, Naval Station Norfolk (world's largest naval base), Quantico, Langley Air Force Base, Fort Eustis, Dam Neck, and the Coast Guard Training Center Yorktown.
Do veterans get property tax exemptions in Virginia?
Yes. Veterans with 100% service-connected disability may receive full property tax exemption on their primary residence (varies by locality, often up to $10,000 in value). Some localities offer additional exemptions for elderly or disabled veterans.
Does Virginia offer free college for military dependents?
Yes. The Virginia Military Survivors and Dependents Education Program (VMSDEP) provides FREE tuition at Virginia public colleges and universities for spouses and children of veterans who were killed in action, died as a result of service, or are rated 100% permanently and totally disabled. This benefit can be worth $50,000-$100,000+ depending on the institution.
What is the VMSDEP program?
VMSDEP (Virginia Military Survivors and Dependents Education Program) provides tuition waivers to dependents of veterans who were killed in action, died in service, or are 100% permanently and totally disabled. Eligible spouses and children (ages 16-29) receive free tuition at all Virginia public colleges and universities for up to 8 years of full-time study. The veteran must have been a Virginia resident.
Is Virginia a good state for military retirees?
Yes. Virginia ranks in the top 10 states for military retirees age 55+ due to full military retirement exemption, massive veteran community (730,000+ vets), world-class military bases, excellent VA healthcare, and defense contractor job opportunities. The combination of tax benefits and military-friendly culture makes Virginia highly attractive.
Calculate Your Virginia Retirement Income
Use our free calculator to see exactly how much you'll keep after taxes when retiring in Virginia. Factor in your military pension, VA disability, age, and any civilian income to plan your retirement with confidence.
Ready to Calculate Your Virginia Retirement Income?
See exactly what civilian salary you need based on your retirement pay, VA disability, and Virginia's military-friendly tax benefits
Use the Free Calculator →Additional Resources for Virginia Veterans
- Virginia Department of Veterans Services - dvs.virginia.gov - State benefits, claims assistance
- Virginia Veterans Benefits - In-state tuition, education benefits, employment programs
- Virginia Property Tax Relief - Apply through local city/county assessor
- Virginia State Parks - Free access for 100% disabled veterans
- Military Officers Association (Hampton Roads Chapter) - Networking and support
- Fleet Reserve Association - Social organization for Navy, Marine Corps, Coast Guard retirees
🎖️ Bottom Line for Virginia Military Retirement
Virginia offers exceptional tax benefits for military retirees age 55+ with 100% state tax exemption on retirement pay, saving thousands annually. Combined with the world's largest concentration of military installations, a massive veteran community, excellent VA healthcare, and defense contractor opportunities, Virginia is one of the top retirement destinations for servicemembers. Use our calculator above to see your exact financial picture in the Old Dominion.
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