Virginia tips tax calculator and $2.13 cash wage

Virginia conforms to the 2025 federal law only “to the extent” it changes federal AGI or itemized deductions — the tips deduction does neither, so Virginia taxes tips — and it lets employers pay $2.13 against a $12.77 minimum.

Your Virginia tips

State where you work Qualified tips this year

Voluntary cash and card tips on your W-2, 1099 or Form 4137 — not service charges.

Tax year

2025202620272028

Filing status Other income in your AGI

Wages without the tips, plus any other income (both spouses if filing jointly).

Your occupation The 71 Treasury Tipped Occupation Codes in the final rule (TD 10044).

How you are paid

Employee (W-2) Self-employed (1099)

More options

Itemized deductions (if larger than the standard deduction)

State marginal rate override (%) Leave blank to use the state’s published rate for your bracket.

Federal income tax saved in 2026Deduction $18,000 at 12% $2,160

$18,000 of the $25,000 cap used (72%)

Qualified tips	$18,000
After the $25,000 cap	$18,000
Income phase-out (MAGI $48,000)	$0
Tips deduction	$18,000
Federal tax before → after	$3,580 → $1,420
Social Security & Medicare still due on tips	$1,377
Virginia 2026: Tips stay taxable in this state	$0
Total income tax saved	$2,160

What the estimate leaves out

Conformity with a carve-out

During the 2026 session Virginia replaced rolling conformity with a fixed date of December 31, 2025, on the same terms. The 2025 Form 760 instructions also note the standard deduction of $8,750 single and $17,500 joint for 2025 and 2026, which reverts to $3,000 and $6,000 afterwards, and a refundable earned income credit raised to 20%.

Virginia figures

Cash wage / minimum	$2.13 / $12.77
In force	July 1, 2026 – December 31, 2026
Next change	after December 31, 2026 — not yet published
Tipped threshold	More than $30 a month in tips
Tips on the 2025 return	tips stay taxable in this state. Virginia conforms to H.R. 1 only “to the extent they affect the computation of federal adjusted gross income or federal itemized deductions” — the tips deduction does neither. Source: Virginia Department of Taxation
Tips on the 2026 return	tips stay taxable in this state. The 2026 session fixed conformity at Dec. 31, 2025 on the same terms; no tips subtraction was added. Source: Virginia Department of Taxation

A $10.64 tip credit

Virginia’s minimum is inflation-adjusted every January; at $12.77 in 2026 and a $2.13 cash wage, tips must cover $10.64 an hour before the employer owes make-up pay. The 2027 rate had not been published when we checked.

A Richmond server

A $18,000 deduction saves $2,070 federally; Virginia taxes the tips. Thirty hours at $2.13 plus $200 of tips leaves $119 for the employer to make up against $383.

Check a Virginia workweek

Employer make-up owed$2.13 cash wage + tips must reach $12.77 an hour. $190

Minimum for the hours	$409
Cash wage paid	$68
Tips counted toward the minimum	$150
Your effective hourly pay	$12.77

How the make-up rule works

Where these figures come from

Federal rules: how the deduction works. Nearby: Maryland, District of Columbia, West Virginia, Kentucky, Tennessee, North Carolina.

Figures verified against primary sources on October 5, 2026