Virginia HB 1006: Income tax, state and corporate; deductions for business interest.

Bill Text

VIRGINIAACTSOFASSEMBLY--2022SESSION
CHAPTER648
An Act to amend and reenact §§ 58.1-322.03 and 58.1-402 of the Code of Virginia, relating to Virginia
taxable income; corporations; deductions; business interest.
[H1006]
ApprovedApril11,2022
Be it enacted by the General Assembly of Virginia:
1. That §§58.1-322.03 and 58.1-402 of the Code of Virginia are amended and reenacted as follows:
§58.1-322.03. Virginia taxable income; deductions.
In computing Virginia taxable income pursuant to § 58.1-322, there shall be deducted from Virginia
adjusted gross income as defined in §58.1-321:
1. a. 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, but reduced by the
amount of income taxes imposed by the Commonwealth or any other taxing jurisdiction and deducted
on such federal return and increased by an amount that, when added to the amount deducted under
§ 170 of the Internal Revenue Code for mileage, results in a mileage deduction at the state level for
such purposes at a rate of 18 cents per mile; or
b. Provided that the taxpayer has not itemized deductions for the taxable year on his federal income
tax return: (i) for taxable years beginning before January 1, 2019, and on and after January 1, 2026,
$3,000 for single individuals and $6,000 for married persons (one-half of such amounts in the case of a
married individual filing a separate return) and (ii) for taxable years beginning on and after January 1,
2019, but before January 1, 2026, $4,500 for single individuals and $9,000 for married persons (one-half
of such amounts in the case of a married individual filing a separate return). For purposes of this
section, any person who may be claimed as a dependent on another taxpayer's return for the taxable year
may compute the deduction only with respect to earned income.
2. a. A deduction in the amount of $930 for each personal exemption allowable to the taxpayer for
federal income tax purposes.
b. Each blind or aged taxpayer as defined under § 63(f) of the Internal Revenue Code shall be
entitled to an additional personal exemption in the amount of $800.
The additional deduction for blind or aged taxpayers allowed under this subdivision shall be
allowable regardless of whether the taxpayer itemizes deductions for the taxable year for federal income
tax purposes.
3. A deduction equal to the amount of employment-related expenses upon which the federal credit is
based under § 21 of the Internal Revenue Code for expenses for household and dependent care services
necessary for gainful employment.
4. An additional $1,000 deduction for each child residing for the entire taxable year in a home under
permanent foster care placement as defined in § 63.2-908, provided that the taxpayer can also claim the
child as a personal exemption under §151 of the Internal Revenue Code.
5. a. A deduction in the amount of $12,000 for individuals born on or before January 1, 1939.
b. A deduction in the amount of $12,000 for individuals born after January 1, 1939, who have
attained the age of 65. This deduction shall be reduced by $1 for every $1 that the taxpayer's adjusted
federal adjusted gross income exceeds $50,000 for single taxpayers or $75,000 for married taxpayers.
For married taxpayers filing separately, the deduction shall be reduced by $1 for every $1 that the total
combined adjusted federal adjusted gross income of both spouses exceeds $75,000.
For the purposes of this subdivision, "adjusted federal adjusted gross income" means federal adjusted
gross income minus any benefits received under Title II of the Social Security Act and other benefits
subject to federal income taxation solely pursuant to §86 of the Internal Revenue Code, as amended.
6. The amount an individual pays as a fee for an initial screening to become a possible bone marrow
donor, if (i) the individual is not reimbursed for such fee or (ii) the individual has not claimed a
deduction for the payment of such fee on his federal income tax return.
7. a. A deduction shall be allowed to the purchaser or contributor for the amount paid or contributed
during the taxable year for a prepaid tuition contract or college savings trust account entered into with
the Virginia College Savings Plan, pursuant to Chapter 7 (§ 23.1-700 et seq.) of Title 23.1. Except as
provided in subdivision b, the amount deducted on any individual income tax return in any taxable year
shall be limited to $4,000 per prepaid tuition contract or college savings trust account. No deduction
shall be allowed pursuant to this subdivision 7 if such payments or contributions are deducted on the
purchaser's or contributor's federal income tax return. If the purchase price or annual contribution to a
college savings trust account exceeds $4,000, the remainder may be carried forward and subtracted in
future taxable years until the purchase price or college savings trust contribution has been fu