Filing season officially started Monday, January 23 – here are a few changes that might impact you when you file this year.
Increased standard deduction
If you take the standard deduction, you’ll benefit from an increase in the deduction amount this year.
The new standard deduction is:
- $8,000 for single filers (up from $4,500), and
- $16,000 for married couples filing jointly (up from $9,000).
New Refundable Earned Income Tax Credit
If you qualify for the federal Earned Income Tax Credit, you may be able to claim a new, refundable version of the Virginia Earned Income Tax Credit (EITC) on your state tax return equal to 15% of your federal Earned Income Tax Credit.
Eligible Educator Expense Deduction
If you’re a Virginia educator, you can now deduct up to $500 of qualifying expenses from your Virginia taxable income. You can’t take the deduction for purchases that were reimbursed or claimed as a deduction on your federal income tax return.
Note: if you qualify for this deduction and already filed your return, you don’t need to take any additional action. Now that Virginia’s conformity legislation passed, we can now process your return and send your refund (if you’re eligible).
Military Retirement Subtraction
If you’re 55 or older and retired from one of the branches of the Armed Forces, you may be able to claim a subtraction of up to $10,000 from your Virginia taxable income for certain military retirement income and other benefits. If you claim this subtraction, you can’t claim another subtraction, deduction, credit, or exemption from the same income.
Hardwood Management Practices Credit
You may be able to claim a nonrefundable credit equal to your eligible expenses related to implementing beneficial hardwood management practices, up to $1,000.
Date of IRC Conformity Advanced
Virginia’s General Assembly recently passed legislation that advances our conformity to the federal tax code through the end of 2022, with some exceptions. Because the changes were already included in federal tax forms, most Virginians will not need to make an adjustment to their Virginia return. For more information about this year’s conformity legislation, see Tax Bulletin 23-1.