diff --git a/changelog_entry.yaml b/changelog_entry.yaml
index e69de29bb2d..c8b73e1aabc 100644
--- a/changelog_entry.yaml
+++ b/changelog_entry.yaml
@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    added:
+    - Create reform to separate dependent children from Virginia personal exemption.
diff --git a/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/age_limit/in_effect.yaml b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/age_limit/in_effect.yaml
new file mode 100644
index 00000000000..ec50ab1cbfb
--- /dev/null
+++ b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/age_limit/in_effect.yaml
@@ -0,0 +1,9 @@
+description: Virginia limits the dependent exemption to dependents under a certain age, if this is true.
+
+values:
+  0000-01-01: false
+
+metadata:
+  unit: bool
+  period: year
+  label: Virginia dependent exemption age limit in effect
diff --git a/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/age_limit/threshold.yaml b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/age_limit/threshold.yaml
new file mode 100644
index 00000000000..7be83cca320
--- /dev/null
+++ b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/age_limit/threshold.yaml
@@ -0,0 +1,9 @@
+description: Virginia limits the dependent exemption to dependents under this age.
+
+values:
+  2025-01-01: 18
+
+metadata:
+  label: Virginia dependent exemption age threshold
+  period: year
+  unit: year
diff --git a/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/amount.yaml b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/amount.yaml
new file mode 100644
index 00000000000..e603486433f
--- /dev/null
+++ b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/amount.yaml
@@ -0,0 +1,9 @@
+description: Virginia provides this dependent exemption amount per eligible dependent child under the reform.
+
+values:
+  2025-01-01: 930
+
+metadata:
+  label: Virginia dependent exemption amount
+  period: year
+  unit: currency-USD
diff --git a/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/in_effect.yaml b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/in_effect.yaml
new file mode 100644
index 00000000000..893d27540fe
--- /dev/null
+++ b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/in_effect.yaml
@@ -0,0 +1,9 @@
+description: Virginia applies the dependent exemption reform, if this is true (separates dependent children from the personal exemption with configurable amounts and phaseout).
+
+values:
+  0000-01-01: false
+
+metadata:
+  unit: bool
+  period: year
+  label: Virginia dependent exemption reform in effect
diff --git a/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/phaseout/rate.yaml b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/phaseout/rate.yaml
new file mode 100644
index 00000000000..e782da349a5
--- /dev/null
+++ b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/phaseout/rate.yaml
@@ -0,0 +1,9 @@
+description: Virginia phases out the dependent exemption at this rate per dollar of excess AGI.
+
+values:
+  2025-01-01: 0
+
+metadata:
+  label: Virginia dependent exemption phaseout rate
+  period: year
+  unit: /1
diff --git a/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/phaseout/threshold.yaml b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/phaseout/threshold.yaml
new file mode 100644
index 00000000000..b6464cb3fb0
--- /dev/null
+++ b/policyengine_us/parameters/gov/contrib/states/va/dependent_exemption/phaseout/threshold.yaml
@@ -0,0 +1,23 @@
+description: Virginia phases the dependent exemption out for filers with adjusted gross income above this threshold, based on filing status.
+
+metadata:
+  label: Virginia dependent exemption phaseout threshold
+  period: year
+  unit: currency-USD
+  breakdown:
+    - filing_status
+
+JOINT:
+  2025-01-01: 0
+
+HEAD_OF_HOUSEHOLD:
+  2025-01-01: 0
+
+SURVIVING_SPOUSE:
+  2025-01-01: 0
+
+SINGLE:
+  2025-01-01: 0
+
+SEPARATE:
+  2025-01-01: 0
diff --git a/policyengine_us/reforms/reforms.py b/policyengine_us/reforms/reforms.py
index 4549627136e..5c0a65cf3bf 100644
--- a/policyengine_us/reforms/reforms.py
+++ b/policyengine_us/reforms/reforms.py
@@ -124,6 +124,9 @@
 from .states.de.dependent_credit.de_dependent_credit_reform import (
     create_de_dependent_credit_reform_fn,
 )
+from .states.va.dependent_exemption.va_dependent_exemption_reform import (
+    create_va_dependent_exemption_reform_fn,
+)
 from .aca import (
     create_aca_ptc_additional_bracket_reform,
     create_aca_ptc_simplified_bracket_reform,
@@ -283,6 +286,9 @@ def create_structural_reforms_from_parameters(parameters, period):
     de_dependent_credit = create_de_dependent_credit_reform_fn(
         parameters, period
     )
+    va_dependent_exemption = create_va_dependent_exemption_reform_fn(
+        parameters, period
+    )
     aca_ptc_additional_bracket = create_aca_ptc_additional_bracket_reform(
         parameters, period
     )
@@ -348,6 +354,7 @@ def create_structural_reforms_from_parameters(parameters, period):
         ri_ctc,
         ri_exemption,
         de_dependent_credit,
+        va_dependent_exemption,
         aca_ptc_additional_bracket,
         aca_ptc_simplified_bracket,
         aca_ptc_700_fpl_cliff,
diff --git a/policyengine_us/reforms/states/va/__init__.py b/policyengine_us/reforms/states/va/__init__.py
new file mode 100644
index 00000000000..9062918ae8c
--- /dev/null
+++ b/policyengine_us/reforms/states/va/__init__.py
@@ -0,0 +1,3 @@
+from .dependent_exemption.va_dependent_exemption_reform import (
+    create_va_dependent_exemption_reform_fn,
+)
diff --git a/policyengine_us/reforms/states/va/dependent_exemption/va_dependent_exemption_reform.py b/policyengine_us/reforms/states/va/dependent_exemption/va_dependent_exemption_reform.py
new file mode 100644
index 00000000000..a1003a5d288
--- /dev/null
+++ b/policyengine_us/reforms/states/va/dependent_exemption/va_dependent_exemption_reform.py
@@ -0,0 +1,164 @@
+from policyengine_us.model_api import *
+from policyengine_core.periods import period as period_
+from policyengine_core.periods import instant
+
+
+def create_va_dependent_exemption_reform() -> Reform:
+    class va_eligible_dependents_count(Variable):
+        value_type = int
+        entity = TaxUnit
+        label = "Virginia eligible dependents count"
+        definition_period = YEAR
+        defined_for = StateCode.VA
+
+        def formula(tax_unit, period, parameters):
+            p = parameters(period).gov.contrib.states.va.dependent_exemption
+
+            person = tax_unit.members
+            age = person("age", period)
+            is_dependent = person("is_tax_unit_dependent", period)
+
+            # Apply age limit if in effect
+            if p.age_limit.in_effect:
+                age_threshold = p.age_limit.threshold
+                eligible_dependents = is_dependent & (age < age_threshold)
+            else:
+                eligible_dependents = is_dependent
+
+            return tax_unit.sum(eligible_dependents)
+
+    class va_dependent_exemption_maximum(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Virginia dependent exemption maximum before phaseout"
+        unit = USD
+        definition_period = YEAR
+        defined_for = StateCode.VA
+
+        def formula(tax_unit, period, parameters):
+            p = parameters(period).gov.contrib.states.va.dependent_exemption
+
+            dependents_count = tax_unit("va_eligible_dependents_count", period)
+            return dependents_count * p.amount
+
+    class va_dependent_exemption_phaseout(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Virginia dependent exemption phaseout amount"
+        unit = USD
+        definition_period = YEAR
+        defined_for = StateCode.VA
+
+        def formula(tax_unit, period, parameters):
+            p = parameters(period).gov.contrib.states.va.dependent_exemption
+
+            filing_status = tax_unit("filing_status", period)
+            agi = tax_unit("va_agi", period)
+
+            threshold = p.phaseout.threshold[filing_status]
+            excess_income = max_(agi - threshold, 0)
+            return excess_income * p.phaseout.rate
+
+    class va_dependent_exemption(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Virginia dependent exemption"
+        unit = USD
+        definition_period = YEAR
+        defined_for = StateCode.VA
+
+        def formula(tax_unit, period, parameters):
+
+            maximum = tax_unit("va_dependent_exemption_maximum", period)
+            phaseout = tax_unit("va_dependent_exemption_phaseout", period)
+
+            return max_(maximum - phaseout, 0)
+
+    class va_older_dependents_count(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Virginia older dependents count"
+        unit = USD
+        definition_period = YEAR
+        defined_for = StateCode.VA
+
+        def formula(tax_unit, period, parameters):
+            person = tax_unit.members
+            is_dependent = person("is_tax_unit_dependent", period)
+            total_dependents = tax_unit.sum(is_dependent)
+            eligible_dependent_exemptions = tax_unit(
+                "va_eligible_dependents_count", period
+            )
+            return max_(0, total_dependents - eligible_dependent_exemptions)
+
+    class va_personal_exemption(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Virginia personal exemption"
+        unit = USD
+        definition_period = YEAR
+        defined_for = StateCode.VA
+
+        def formula(tax_unit, period, parameters):
+            p_base = parameters(
+                period
+            ).gov.states.va.tax.income.exemptions.personal
+
+            # Calculate personal exemptions base amount (filer + spouse + older dependents)
+            filing_status = tax_unit("filing_status", period)
+            older_dependents = tax_unit("va_older_dependents_count", period)
+            personal_count = (
+                where(
+                    filing_status == filing_status.possible_values.JOINT,
+                    2,
+                    1,
+                )
+                + older_dependents
+            )
+            personal_exemption_amount = personal_count * p_base
+
+            # Add dependent exemption (has its own phase-out logic)
+            dependent_exemption_amount = tax_unit(
+                "va_dependent_exemption", period
+            )
+
+            return personal_exemption_amount + dependent_exemption_amount
+
+    class reform(Reform):
+        def apply(self):
+            self.update_variable(va_eligible_dependents_count)
+            self.update_variable(va_dependent_exemption_maximum)
+            self.update_variable(va_dependent_exemption_phaseout)
+            self.update_variable(va_dependent_exemption)
+            self.update_variable(va_older_dependents_count)
+            self.update_variable(va_personal_exemption)
+
+    return reform
+
+
+def create_va_dependent_exemption_reform_fn(
+    parameters, period, bypass: bool = False
+):
+    if bypass:
+        return create_va_dependent_exemption_reform()
+
+    p = parameters.gov.contrib.states.va.dependent_exemption
+
+    reform_active = False
+    current_period = period_(period)
+
+    for i in range(5):
+        if p(current_period).in_effect:
+            reform_active = True
+            break
+        current_period = current_period.offset(1, "year")
+
+    if reform_active:
+        return create_va_dependent_exemption_reform()
+    else:
+        return None
+
+
+va_dependent_exemption_reform = create_va_dependent_exemption_reform_fn(
+    None, None, bypass=True
+)
diff --git a/policyengine_us/tests/policy/contrib/states/va/exemption_reform_test.yaml b/policyengine_us/tests/policy/contrib/states/va/exemption_reform_test.yaml
new file mode 100644
index 00000000000..345b8cd67b0
--- /dev/null
+++ b/policyengine_us/tests/policy/contrib/states/va/exemption_reform_test.yaml
@@ -0,0 +1,182 @@
+- name: VA exemption reform - restrict to children under 18
+  period: 2025
+  reforms: policyengine_us.reforms.states.va.dependent_exemption.va_dependent_exemption_reform.va_dependent_exemption_reform
+  input:
+    gov.contrib.states.va.dependent_exemption.in_effect: true
+    gov.contrib.states.va.dependent_exemption.amount: 930
+    gov.contrib.states.va.dependent_exemption.age_limit.in_effect: true
+    gov.contrib.states.va.dependent_exemption.age_limit.threshold: 18
+    people:
+      parent:
+        age: 40
+        employment_income: 60_000
+      child1:
+        age: 16
+        is_tax_unit_dependent: true
+      child2:
+        age: 20
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [parent, child1, child2]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [parent, child1, child2]
+        state_name: VA
+  output:
+    # 1 personal (930) + 1 eligible dependent (930) + 1 older dependent (930)
+    va_personal_exemption: 2_790
+
+- name: VA exemption reform - restrict to children under 13
+  period: 2025
+  reforms: policyengine_us.reforms.states.va.dependent_exemption.va_dependent_exemption_reform.va_dependent_exemption_reform
+  input:
+    gov.contrib.states.va.dependent_exemption.in_effect: true
+    gov.contrib.states.va.dependent_exemption.amount: 930
+    gov.contrib.states.va.dependent_exemption.age_limit.in_effect: true
+    gov.contrib.states.va.dependent_exemption.age_limit.threshold: 13
+    people:
+      parent:
+        age: 40
+        employment_income: 60_000
+      child1:
+        age: 10
+        is_tax_unit_dependent: true
+      child2:
+        age: 16
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [parent, child1, child2]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [parent, child1, child2]
+        state_name: VA
+  output:
+    # 1 personal (930) + 1 eligible dependent (930) + 1 older dependent (930)
+    va_personal_exemption: 2_790
+
+- name: VA exemption reform - different amounts for dependent children
+  period: 2025
+  reforms: policyengine_us.reforms.states.va.dependent_exemption.va_dependent_exemption_reform.va_dependent_exemption_reform
+  input:
+    gov.contrib.states.va.dependent_exemption.in_effect: true
+    gov.contrib.states.va.dependent_exemption.amount: 2_000
+    gov.contrib.states.va.dependent_exemption.age_limit.in_effect: true
+    gov.contrib.states.va.dependent_exemption.age_limit.threshold: 18
+    people:
+      parent:
+        age: 40
+        employment_income: 60_000
+      child1:
+        age: 10
+        is_tax_unit_dependent: true
+      child2:
+        age: 16
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [parent, child1, child2]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [parent, child1, child2]
+        state_name: VA
+  output:
+    # 1 personal (930) + 2 eligible dependents (2_000 each = 4_000) = 4_930
+    va_personal_exemption: 4_930
+
+- name: VA exemption reform - AGI phaseout
+  period: 2025
+  reforms: policyengine_us.reforms.states.va.dependent_exemption.va_dependent_exemption_reform.va_dependent_exemption_reform
+  input:
+    gov.contrib.states.va.dependent_exemption.in_effect: true
+    gov.contrib.states.va.dependent_exemption.amount: 930
+    gov.contrib.states.va.dependent_exemption.phaseout.threshold.SINGLE: 100_000
+    gov.contrib.states.va.dependent_exemption.phaseout.rate: 0.05
+    people:
+      parent:
+        age: 40
+        employment_income: 120_000
+      child1:
+        age: 10
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [parent, child1]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [parent, child1]
+        state_name: VA
+  output:
+    # Personal exemption: 930 (baseline)
+    # Dependent exemption before phaseout: 930
+    # Phaseout: (120_000 - 100_000) * 0.05 = 1_000 (only applies to dependent exemption)
+    # Dependent exemption after phaseout: max(930 - 1_000, 0) = 0
+    # Final: 930 (personal) + 0 (dependent) = 930
+    va_personal_exemption: 930
+
+- name: VA exemption reform - joint filing
+  period: 2025
+  reforms: policyengine_us.reforms.states.va.dependent_exemption.va_dependent_exemption_reform.va_dependent_exemption_reform
+  input:
+    gov.contrib.states.va.dependent_exemption.in_effect: true
+    gov.contrib.states.va.dependent_exemption.amount: 2_000
+    gov.contrib.states.va.dependent_exemption.age_limit.in_effect: true
+    gov.contrib.states.va.dependent_exemption.age_limit.threshold: 18
+    people:
+      parent1:
+        age: 40
+        is_tax_unit_head: true
+        employment_income: 60_000
+      parent2:
+        age: 38
+        is_tax_unit_spouse: true
+        employment_income: 40_000
+      child1:
+        age: 10
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [parent1, parent2, child1]
+        filing_status: JOINT
+    households:
+      household:
+        members: [parent1, parent2, child1]
+        state_name: VA
+  output:
+    # 2 personal exemptions (930 * 2 = 1_860) + 1 eligible dependent (2_000) = 3_860
+    va_personal_exemption: 3_860
+
+- name: VA exemption reform - no age limit (all dependents eligible)
+  period: 2025
+  reforms: policyengine_us.reforms.states.va.dependent_exemption.va_dependent_exemption_reform.va_dependent_exemption_reform
+  input:
+    gov.contrib.states.va.dependent_exemption.in_effect: true
+    gov.contrib.states.va.dependent_exemption.amount: 2_000
+    gov.contrib.states.va.dependent_exemption.age_limit.in_effect: false
+    people:
+      parent:
+        age: 40
+        employment_income: 60_000
+      child1:
+        age: 10
+        is_tax_unit_dependent: true
+      child2:
+        age: 22
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [parent, child1, child2]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [parent, child1, child2]
+        state_name: VA
+  output:
+    # 1 personal (930) + 2 eligible dependents (2_000 each = 4_000) = 4_930
+    # No older dependents since age limit is not in effect
+    va_personal_exemption: 4_930