What is the difference between federal and state income tax?

In Virginia, both federal and state income taxes are levied on income earned by individuals. The two taxes are separate, with each having its own rules and regulations. Federal income tax is a tax imposed by the federal government. It is the same for all states, and the rate is based on income levels. The rate increases as income goes up, and there are several deductions and credits available to reduce the amount of federal income tax that must be paid. State income tax is a tax imposed by the state of Virginia. It is a percentage of the amount you earn. Currently, the rate is 5.75%. State income tax rules are unique to Virginia, and each state has its own tax brackets and allowable deductions. The main difference between federal and state income taxes is that the federal tax is based on income levels, while the state tax is based on the portion of income earned within the state of Virginia. Federal income tax must be paid to the federal government, while state income tax must be paid to the Commonwealth of Virginia. Additionally, the deductions and credits available for federal income tax are not the same as those for state income tax.

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What is the difference between federal and state income tax?

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