Under legislation enacted by the General Assembly, Virginia's date of conformity to the federal tax code will advance to December 31, 2021. See Tax Bulletin 22-1 for more information.
In addition to the deductions below, Virginia law allows for several subtractions from income that may reduce your tax liability.
If you claimed the standard deduction on your federal income tax return, you must also claim the standard deduction on your Virginia return. Virginia standard deduction amounts are:
|Filing Status||Description||Standard Deduction|
|1||All Returns - Single||$4,500|
|2||All Returns - Married, Filing Jointly||$9,000|
|3||Form 760 (resident) - Married, filing separate returns||$4,500|
|3||Form 760PY (part-year resident) - Married, filing separate returns||$4,500*|
|3||Form 763 (nonresident) - Married, spouse has no income from any source||$4,500|
|4||Form 760 (resident)||N/A|
|4||Form 760-PY (part-year resident) - Married, filing separately on a combined return||$9,000*|
|4||Form 763 (nonresident) - Married, filing separate returns||$4,500|
* Part-year residents must prorate the standard deduction based on their period of residency. For details, see the instructions for Form 760-PY.
Beginning with your 2022 income taxes (returns due in 2023), the standard deduction will increase to:
|Filing Status||Description||Standard Deduction|
|1||All Returns - Single||$8,000|
|2||All Returns - Married, Filing Jointly||$16,000|
|3||Form 760 (resident) - Married, filing separate returns||$8,000|
|3||Form 760PY (part-year resident) - Married, filing separate returns||$8,000*|
|3||Form 763 (nonresident) - Married, spouse has no income from any source||$8,000|
|4||Form 760 (resident)||N/A|
|4||Form 760-PY (part-year resident) - Married, filing separately on a combined return||$16,000*|
|4||Form 763 (nonresident) - Married, filing separate returns||$8,000|
This increase depends on Virginia hitting certain revenue targets. If the targets aren’t met, the standard deduction will increase to $7,500 and $15,000, respectively.
Virginia Itemized Deductions
If you itemize your deductions on your federal income tax return, you must also itemize them on your Virginia return. Complete the Virginia Schedule A, and attach it to your return. You can claim most of the same deductions on your Virginia return that you did on your federal Schedule A.
Part-year residents should complete the computation using only the deductions paid for while Virginia residents.
Married Couples Filing Separate Returns
If you filed a joint federal income tax return, but your Virginia filing status is married, filing separately, you’ll need to divide your deductions between both spouses. Generally, you can claim the deductions you personally paid for. If you can’t separately account for the deductions, you can allocate them based on the percentage of income for each spouse. For example, if your federal adjusted gross income (FAGI) represents 25% of the couple's joint FAGI, then you may claim 25% of the total itemized deductions from federal Schedule A.
Child and Dependent Care Expenses
You may claim this deduction on your Virginia return if you were eligible to claim a credit for child and dependent care expenses on your federal return. Enter the amount on which the federal credit for child and dependent care is based. (This is the amount on federal Form 2441 that is multiplied by the decimal amount - up to $8,000 for one dependent and $16,000 for 2 or more). Do not enter the federal credit amount.
If you were unable to claim this deduction on your federal return because your adjusted gross income exceeded the maximum amount allowed, you may still claim it on your Virginia return.
Example: Jon and Mary have three children in day care. Both their incomes exceed the maximum federal child care expense amount of $6,000. Their actual child care expenses were $4,000. Therefore, on their federal return, their child care credit was based on $4,000 (from line 6 of Form 2441).
Based on the information from Form 2441, Jon and Mary will subtract $4,000 on their Virginia return - the expenses on which they based their credit.
Tip: The amount of employment-related expenses that may be subtracted is limited to the amount actually used in computing the federal credit for child and dependent care expenses. As a general rule, you are limited to a maximum of $3,000 for one child and $6,000 if you are claiming the expenses for two or more dependents, or the earned income of the spouse having the lowest income, whichever is less.
Caution: Filers often deduct their federal credit amount by mistake, which results in a much lower deduction. Be sure to use the qualified expense amount for your Virginia deduction.
Foster Care Deduction
Foster parents may claim a deduction of $1,000 for each child residing in their home under permanent foster care, as defined in the Code of Virginia, provided that they claim the foster child as a dependent on their federal and Virginia income tax returns.
Bone Marrow Screening Fee
Enter the amount of the fee paid for an initial screening to become a possible bone marrow donor, provided you were not reimbursed for the fee and did not claim a deduction for the fee on your federal return.
Virginia College Savings Plan Prepaid Tuition Contract Payments and College Savings Trust Account Contributions
If you are under age 70 on or before Dec. 31 of the taxable year, enter the lesser of $4,000 or the amount contributed during the taxable year to each Virginia529 account (Virginia 529 prePAID, Virginia 529 inVEST, College America, CollegeWealth). If you contributed more than $4,000 per account during the taxable year, you may carry forward any undeducted amounts until the contribution has been fully deducted. However, if you are age 70 or older on or before Dec. 31 of the taxable year, you may deduct the entire amount contributed during the taxable year. Only the owner of record for an account may claim a deduction for contributions made.
Continuing Teacher Education
A licensed primary or secondary school teacher may enter a deduction equal to 20% of unreimbursed tuition costs incurred to attend continuing teacher education courses that are required as a condition of employment, provided these expenses were not deducted from federal adjusted gross income.
Beginning with your 2022 Virginia income tax return (return filed in 2023), eligible educators may deduct up to $500 for:
- professional development courses, and
- purchase of qualifying equipment, supplies, and materials used directly in the service of students.
Qualifying items include:
- Computer equipment, software, and related services,
- Supplementary materials, and
- Other educational and teaching equipment.
To qualify for the deduction, the educator must make the purchase themselves and not be reimbursed by their school or educational institution. You can’t deduct any expenses that were also deducted on your federal income tax return.
Eligible educators are those who have worked for an accredited Virginia public or private primary or secondary school for at least 900 hours during the year, as a Virginia-licensed:
- student counselor,
- special needs personnel, or
- student aide.
Long-Term Health Care Premiums
Enter the amount of premiums paid for long-term health care insurance, provided you did not claim a deduction for long-term health care insurance premiums on your federal return. The Virginia deduction for long-term health care insurance premiums is completely disallowed if you claimed a federal income tax deduction of any amount for long-term health care insurance premiums paid during the taxable year.
Virginia Public School Construction Grants Program and Fund
Enter the amount of total contributions to the Virginia Public School Construction Grants Program and Fund, provided that you have not claimed a deduction for this amount on your federal income tax return.
Tobacco Quota Buyout
Allows a deduction from taxable income for payments received in the preceding year in accordance with the Tobacco Quota Buyout Program of the American Jobs Creation Act of 2004 to the extent included in federal adjusted gross income. For example, on your 2020 Virginia return you may deduct the portion of such payments received in 2019 that is included in your 2019 federal adjusted gross income; while payments received in 2020 may generate a deduction on your 2021 Virginia return. Individuals cannot claim a deduction for a payment that has been, or will be, subtracted by a corporation unless the subtraction is shown on a Schedule VK-1 you received from an S-corporation. If you chose to accept payment in installments, the gain from the installment received in the preceding year may be deducted. If, however, you opted to receive a single payment, 10% of the gain recognized for federal purposes in the year that the payment was received may be deducted in the following year and in each of the 9 succeeding taxable years.
Sales Tax Paid on Certain Energy Efficient Equipment or Appliances
Allows an income tax deduction for 20% of the sales tax paid on certain energy efficient equipment or appliances, up to $500 per year. If filing a joint return, you may deduct up to $1,000.
Organ and Tissue Donor Expenses
Allows a deduction for unreimbursed expenses that are paid by a living organ and tissue donor that have not been taken as a medical deduction on the taxpayer's federal income tax return. The amount of the deduction is the lesser of $5,000 or the actual amount paid by the taxpayer. If filing a joint return, the deduction is limited to $10,000 or the actual amount paid.
Enter the difference between 18 cents per mile and the charitable mileage deduction per mile allowed on federal Schedule A. If you used actual expenses for the charitable mileage deduction, and those expenses were less than 18 cents per mile, then you may use the difference between actual expenses and 18 cents per mile.
Virginia Bank Franchise Tax
A shareholder of a bank may be required to make certain adjustments to his or her federal adjusted gross income. Such adjustments are required only if the shareholder invests in a bank that (1) is subject to the Virginia Bank Franchise Tax for state tax purposes (Va. Code § 58.1-1207) and (2) has elected to be taxed as a small business corporation (S corporation) for federal tax purposes. Complete the worksheet below to determine the amount of your adjustment.
Computation of Virginia Bank Franchise Tax Deduction
A shareholder of a bank may be required to make certain adjustments to his or her federal adjusted gross income. Complete the worksheet below to determine the amount of your adjustment.
- If your allocable share of the income or gain of the bank was included in federal adjusted gross income, enter the amount here _____________________
- If your allocable share of the losses or deductions of the bank was included in federal adjusted gross income, enter the amount here. _____________________
- Enter the value of any distributions paid or distributed to you by the bank to the extent that such distributions were excluded from federal adjusted gross income. _____________________
- Add line b and Line c. _____________________
- Subtract line d from line a. This is your net deduction amount. If this amount is negative you must enter the amount on Schedule ADJ, line 8a and fill in the box marked "LOSS". _____________________
Income from Dealer Disposition of Property
Allows an adjustment for certain income from dealer dispositions of property made on or after Jan. 1, 2009. In the year of disposition the adjustment will be a subtraction for gain attributable to installment payments to be made in future taxable years provided that (i) the gain arises from an installment sale for which federal law does not permit the dealer to elect installment reporting of income, and (ii) the dealer elects installment treatment of the income for Virginia purposes on or before the due date prescribed by law for filing the taxpayer's income tax return. In subsequent taxable years the adjustment will be an addition for gain attributable to any payments made during the taxable year with respect to the disposition. In the years following the year of disposition, the taxpayer would be required to add back the amount that would have been reported under the installment method. Each disposition must be tracked separately for purposes of this adjustment.
Prepaid Funeral, Medical, and Dental Insurance Premiums
You may be allowed a deduction of payments for (i) a prepaid funeral insurance policy that covers you or (ii) medical or dental insurance premiums for any person for whom you may claim a deduction for such premiums under federal income tax laws. To qualify for this deduction, you must be age 66 or older with earned income of at least $20,000 for the taxable year and federal adjusted gross income not in excess of $30,000 for the taxable year. The deduction is not allowed for any portion of premiums for which you have been reimbursed, have claimed a deduction for federal income tax purposes, have claimed another Virginia income tax deduction or subtraction, or have claimed a federal income tax credit or any Virginia income tax credit.
ABLEnow Account Contributions
Effective for taxable years beginning on or after January 1, 2016, you may claim a deduction for the amount contributed during the taxable year to an ABLEnow account entered into with the Virginia College Savings Plan. No deduction is allowed if such contributions are deducted on the contributor’s federal income tax return. If the contribution to an ABLEnow account exceeds $2,000 the remainder may be carried forward and subtracted in future taxable years until the amount has been fully deducted; however, in no event shall the amount deducted in any taxable year exceed $2,000 per ABLEnow account. Deductions are subject to recapture in the taxable year or years in which distributions or refunds are made for any reason other than (i) to pay qualified disability expenses; or (ii) the beneficiary’s death. A contributor who is 70 or older is allowed a deduction for the full amount contributed to an ABLEnow account, less any amounts previously deducted..
If you were not allowed to deduct business interest on your federal income tax return due to §163(j) of the Internal Revenue Code, you may be able to subtract 20% of it on your Virginia income tax return. Beginning with your 2022 individual income taxes (returns due in 2023), the percentage you can deduct on your Virginia return will increase to 30%.
Enclose an explanation for other deductions.