Payments from deferred compensation plans are taxed based on the state of residence at the time of the deferral into the deferred compensation plan unless you elect installment payments over 10 or more years. If you lived in Virginia when deferrals were credited to your account in the deferred compensation plan, you will be taxed by Virginia when the lump sum payment is made from the deferred compensation plan regardless of where you are living at the time of the payment.
