For Virginia, state AGI is not the income made in the state, but rather, your Federal AGI plus Virginia add-backs (on deductions that Virginia does not allow) and minus subtractions (income that Virginia does not tax). The following information comes directly from 763 Instructions (Virginia Nonresident tax form instruction booklet), page 4:
If your Virginia Adjusted Gross Income (VAGI) is at or above the threshold amount shown in the following table, you are required to file. VAGI is the Adjusted Gross Income on your federal return plus any Virginia additions from Line 2, minus any Virginia subtractions from Line 8. Information on Virginia additions and subtractions is included in the instructions later in this booklet. (Italics added).
The reason Virginia uses this standard is that Virginia will prorate your Virginia tax to the percentage of income earned in Virginia. If you earned enough income to require you to file a Federal tax return, you almost surely will also be required to file a Virginia return if you earned any income there.
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