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Virginia Executor Fee: Is It Taxable, and Can You Waive It?

Two questions that go together: compensation is always taxable income, which is exactly why so many family personal representatives choose not to take it. Virginia also has a real way to lose it involuntarily.

IRS Publication 559 · Va. Code § 64.2-1208 FigureMyTax Editorial Team

By the FigureMyTax Editorial Team · How we calculate

Quick answer: Yes, the compensation is always taxable, and yes, a Virginia personal representative can waive it. All personal representatives must report compensation as gross income — there's no exception for a one-time family fiduciary. What changes is how it's taxed: a family member handling a single estate generally owes regular income tax only, while someone in the trade or business of serving as a fiduciary also owes self-employment tax. Estimate your Virginia compensation first with the executor fee calculator.

Part 1: is it taxable?

The trade-or-business test

IRS Publication 559, Personal Representatives: if you aren't in the trade or business of serving as a personal representative — for instance, you're administering a relative's estate as a one-time matter — you report the compensation as other income on Schedule 1 (Form 1040), line 8z. If you are in that trade or business — typically a professional fiduciary or someone who does this repeatedly — you report it as self-employment income on Schedule C, which brings in self-employment tax.

Why it matters: self-employment tax

Self-employment tax adds 15.3% (Social Security and Medicare combined) on top of regular income tax, calculated on Schedule SE. A one-time family fiduciary in Virginia generally avoids this layer entirely by reporting on Schedule 1 instead of Schedule C — the compensation is still taxed as ordinary income, just without the extra 15.3%.

Does a 1099 change anything?

No. A Form 1099 (whether 1099-NEC or 1099-MISC) is a reporting mechanism, not the rule itself. Getting a 1099 doesn't automatically mean you're "in business" as a fiduciary, and not getting one doesn't mean the compensation isn't taxable. Report the income according to the trade-or-business test above regardless of what form, if any, you receive.

Worked example: the tax treatment

A personal representative administers a parent's Virginia estate with a $500,000 inventory value, receiving the $24,000 guideline estimate under Va. Code § 64.2-1208. As a one-time family fiduciary: reported as $24,000 other income, Schedule 1, line 8z; no self-employment tax; regular federal income tax owed at the fiduciary's normal rate. A professional fiduciary handling the same estate would instead report it on Schedule C, owing both income tax and the 15.3% self-employment tax.

Part 2: should you waive it?

Waiving is straightforward; forfeiture is different

Va. Code § 64.2-1208 doesn't require a fiduciary to claim compensation — simply not requesting it functions as a waiver, and the will itself may disallow fiduciary compensation entirely. That's distinct from § 64.2-1217, which lets compensation be forfeited involuntarily if a proper account isn't filed on time, unless good cause is shown — a real consequence for a personal representative who wanted to be paid but missed their filing deadlines.

Why personal representatives waive the fee

  • The tax difference. Compensation is taxable income, as shown above; an inheritance generally isn't. A beneficiary-fiduciary sometimes ends up with more after-tax money by skipping compensation and simply inheriting the full share instead.
  • Family dynamics. Taking compensation out of the estate reduces what's left for other heirs. Some personal representatives waive it to avoid that friction, especially on a modest estate.
  • It was never expected to be paid. Many family members step in assuming the role is unpaid, without realizing Virginia law actually entitles them to reasonable compensation by default.

Make it a deliberate decision

Say it out loud: reasonable compensation is available under § 64.2-1208 by default, reviewed through the Commissioner of Accounts process. A personal representative who assumes they won't be paid may later find other heirs expected exactly that — or discover, only when someone asks, that compensation was available all along. Discuss it openly with beneficiaries, ideally before administration is far along, so the decision to seek it (or not) is made knowingly — and keep filing deadlines in mind either way, since forfeiture applies regardless of intent.

Worked example: the full tax tradeoff

A personal representative who is also the sole heir administers the same $500,000 Virginia estate, entitled to the $24,000 guideline compensation.

  • Takes the compensation: $24,000 taxable income (per the rules above), reducing what's left in the estate to distribute by $24,000.
  • Waives it: the $24,000 stays in the estate and passes to the fiduciary as part of their inheritance instead — generally not taxable income to them.

Simplified for illustration; actual tax outcomes depend on the fiduciary's full financial picture. Consult a CPA before deciding.

Facing probate in Virginia?

A local probate attorney can review your estate — many offer a free consultation.

Talk to a Virginia attorney

Virginia executor fee taxes & waiver — frequently asked questions

Is the Virginia executor fee taxable?

Yes. All personal representatives must report compensation as gross income under IRS Publication 559. A one-time family fiduciary reports it as other income with no self-employment tax; a professional or repeat fiduciary owes the additional 15.3% self-employment tax.

Can a Virginia personal representative waive their fee?

Yes. Nothing in § 64.2-1208 requires a fiduciary to claim compensation — they can decline it or accept a reduced amount, and the will itself may also disallow fiduciary compensation entirely.

Can a Virginia executor lose their fee even if they wanted to take it?

Yes. Under § 64.2-1217, fiduciary compensation may be forfeited if a proper account is not filed on time, unless good cause is shown — a real consequence distinct from a voluntary waiver.

Is the Virginia executor fee taxed differently for a family member versus a professional fiduciary?

Yes. A one-time family fiduciary reports the compensation as other income with no self-employment tax, while a professional or repeat fiduciary owes the additional 15.3% self-employment tax.

Does a Virginia will always need to say something for a fiduciary to waive compensation?

No — simply not requesting compensation functions as a waiver under § 64.2-1208, regardless of what the will says.

Keep going

Virginia Executor Fee CalculatorYour estimate + PDF Virginia Executor Fee: How Much Is It?The Commissioner of Accounts guideline Virginia Co-Fiduciaries: How Is the Fee Split?Multiple PRs Virginia Probate Cost CalculatorThe full cost picture

Estimate for general guidance only, not tax or legal advice. Based on IRS Publication 559 and Va. Code § 64.2-1208, § 64.2-1217. The federal tax rules apply the same way regardless of state; only the underlying compensation amount is Virginia-specific here. Whether self-employment tax applies depends on your specific facts. A fiduciary can decline compensation at any time; compensation can also be forfeited involuntarily for a late account, unless good cause is shown. Consult a CPA or Virginia probate attorney for your situation before filing or deciding.