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Credit for Low Income Individuals (CLI)

Virginia law provides an income tax credit for individuals whose family Virginia adjusted gross income is below the amounts established under the federal poverty guidelines, or who claimed the earned income tax credit (EITC) on their federal income tax return.   Eligible filers may claim the low income credit as computed on Schedule ADJ, or claim 20% of their federal EITC amount, whichever is greater.

Virginia Earned Income Credit:  The provision for claiming 20% of the federal EITC is available to most filers who claimed an EITC, even to individuals who would not otherwise be eligible for the CLI on the Virginia return because of receiving Virginia adjusted gross income that exceeds the federal poverty guideline amounts. Unlike the EITC, this credit is nonrefundable. Filers who claim certain deductions and special exemptions, as well as filers who can be claimed as dependents on another individual's returns may not claim the credit. Please review Schedule ADJ for revisions and detailed instructions on the Virginia earned income credit.

Credit for Low Income Individuals:  If your total family Virginia adjusted gross income is less than the amounts established under federal poverty guidelines, you may qualify to claim the Credit for Low Income Individuals (CLI). "Virginia adjusted gross income" is federal adjusted gross income, plus any Virginia additions and minus any Virginia subtractions reported on your Virginia income tax return (see line 9 of Virginia Form 760). "Family Virginia adjusted gross income" includes the total Virginia adjusted gross income for you, your spouse (even if you file separate returns) and any dependents claimed on your return (even if they do not file their own Virginia returns). Eligible filers may claim a credit of $300 for each exemption (filer and dependent) reported on their returns. The CLI is not refundable, but it can significantly reduce your tax liability. For details on claiming the CLI, see our Tax Credit information.

Filing Tips:  Claiming the credit is quick and easy when you use iFile, our free Internet filing service, to file your Virginia income tax return.  If you are eligible to claim the CLI, iFile will guide you through a simple step-by-step process to fill out your return and compute your credit.  Using iFile takes the guesswork out of filing taxes, because iFile does the math calculations for you, significantly reducing the chance of errors.  Other features of iFile allow you to pay your tax by Direct Payment from your bank account, pay by check, or pay by credit card, as well as update your name and address information or send us inquiries about your account online.  In addition, iFile lets you choose to have your refund deposited directly into your bank account.  Last year, most of the refunds processed for direct deposit through iFile were deposited within five days!