Under emergency legislation enacted by the 2019 General Assembly on February 15, 2019, Virginia's date of conformity to the terms of the Internal Revenue Code will advance from February 9, 2018, to December 31, 2018.
The new legislation allows Virginia to generally conform to the Tax Cuts and Jobs Act and the Bipartisan Budget Act of 2018 for Taxable Year 2018 and after. It also includes Virginia income tax law changes that may affect business taxpayers filing income tax returns for Taxable Year 2018 and after.
In addition, this legislation provides a refund of up to $110 for an individual or $220 for married persons filing a joint return. In order to receive a refund, taxpayers need to file a complete return for Taxable Year 2018 before July 1, 2019. A refund is allowed up to the amount of a taxpayer’s tax liability after the application of any deductions, subtractions, or credits to which the individual or married persons are otherwise entitled. Such refunds are required to be issued on or after October 1, 2019, but before October 15, 2019.
This legislation also includes Virginia income tax law changes that may affect individual taxpayers filing income tax returns for Taxable Year 2019 and after. We will publish additional guidance regarding such provisions soon.
Tax Bulletin 19-1 details the conformity adjustments that may be necessary and provides more information on how the changes affect 2018 Virginia income tax returns.
Additionally, Virginia will continue to deconform from:
- Bonus depreciation allowed for certain assets under federal income taxation;
- Five-year carry back of certain net operating losses (“NOLs”) generated in Taxable Years 2008 and 2009;
- Tax exclusions related to cancellation of debt income; and
- Tax deductions related to the application of the applicable high yield debt obligation rules.
If you have additional questions, please visit our website at www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.
