Tax Type
Individual Income Tax
Description
Federal itemized deductions
Topic
Returns/Payments/Records
Date Issued
08-24-1989
August 24, 1989
Re: Individual Income Tax
Dear *********
Thank you for your recent letter regarding the requirement that a person who itemizes deductions for federal individual income tax purposes must also itemize deductions for Virginia individual income tax purposes.
In computing Virginia taxable income, Virginia Code § 58.1-322(D)(1) provides a deduction from federal adjusted gross income for:
- The amount allowable for itemized deductions for federal income tax purposes where the taxpayer has elected for the taxable year to itemize deductions on his federal return.
This requirement was part of the 1971 legislation which conformed the Virginia individual income tax return to the federal individual income tax return. Conformity makes the tax easier to administer, for both the department and the public, since taxpayers do not have to compute separate Virginia itemized deductions. Legislation has been introduced on numerous occasions since 1971 to permit a Virginia taxpayer to claim either itemized or standard deductions regardless of how the federal return is filed, but has failed to receive favorable consideration by the General Assembly.
While this requirement has put some taxpayers at a disadvantage due to the gap that exists between the federal and Virginia standard deductions, the Virginia Tax Reform Act of 1987 has effectively put the federal and Virginia standard deductions on an equal footing beginning in 1989. Effective for taxable year 1989 and beyond, the Virginia standard deduction is $3,000 for single taxpayers, $2,500 for married taxpayers filing separate returns and $5,000 for married taxpayers filing a combined or joint return. These amounts are equal to the base federal standard deduction amounts for taxable year 1988 (the federal standard deduction will be indexed for inflation beginning in taxable year 1989). When coupled with the extra $800 exemption for the elderly, the maximum benefit to a married couple, aged 65 and over who use the Virginia standard deduction in 1989, will be $6,600, as much as $200 more than the $6,400 they will receive for federal purposes.
In addition, Virginia's maximum 5.75% individual income tax rate ranks it among the lowest in the nation among states which impose individual income taxes. Further, as a result of the U.S. Supreme Court decision in Davis v. Michigan, Virginia recently enacted legislation to provide a subtraction from federal adjusted gross income of up to $16,000 of retirement income for each taxpayer aged 55 and over.
If you have any further questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner