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A sweeping federal tax change is poised to bring meaningful relief to Virginia’s retirees.
Thanks to the One Big Beautiful Bill, a new deduction for seniors will sharply reduce—or eliminate entirely—federal taxes on Social Security income.
In Virginia, about 1.5 million residents aged 65 and older are expected to qualify for the exemption.
Most Seniors Will See Their Social Security Go Untaxed
The White House says 88% of all seniors receiving Social Security will no longer owe federal taxes on those benefits beginning in the 2026 tax year. That’s a sharp increase from the current 64%, representing 14.2 million more retirees keeping more of their monthly income.
This change stems from a new senior tax deduction—$6,000 for individuals and $12,000 for married couples over 65—added on top of existing standard and senior deductions. Combined, these deductions could reach $23,750 for individuals and $46,700 for couples.
Virginia’s Aging Population Set to Gain
Virginia has one of the largest and fastest-growing senior populations in the Mid-Atlantic. Of the state’s 8.71 million residents, approximately 1.49 million are aged 65 or older—about 17.2% of the population, according to the most recent census information.
Among them, 1.5 million seniors are expected to benefit from the Social Security tax exemption provided under the bill. The new law is also projected to raise real wages in Virginia by $4,400 to $8,000 and increase take-home pay by up to $11,800 depending on household income.
Not Every Retiree Will Benefit Equally
The senior tax deduction is designed to help middle-income retirees who still owe income taxes. For these households, the new deduction could significantly lower or eliminate federal tax liability.
However, seniors with very low incomes—often those living solely on Social Security—already owe little to no income tax and won’t benefit directly. Wealthier retirees will also see limits. The deduction phases out beginning at $75,000 for single filers and $150,000 for married couples, and disappears completely at $175,000 and $250,000.
Additionally, the deduction is only guaranteed through the 2028 tax year. Congress would need to extend it to make the benefit permanent.
Easing the Pressure on Virginia Homeowners
For older homeowners in places like Fairfax, Richmond, and Virginia Beach, the new deduction could help ease rising housing-related expenses. Property taxes and insurance costs have been steadily increasing—even in areas once considered budget-friendly for retirees.
The quadrupled SALT deduction cap is also expected to provide added relief, allowing deductions of up to $40,000 on state and local taxes—compared to the previous $10,000 limit.
That could translate into meaningful savings for those who itemize their returns, especially in counties with higher property tax assessments.And with a COLA adjustment projected for 2026, Virginia retirees could benefit from a double boost: larger Social Security checks, and fewer taxes taken out of them.
This article was produced with editorial input from Dina Sartore-Bodo, Gabriella Iannetta, and Allaire Conte.