Virginia’s date of conformity with the Internal Revenue Code (IRC) was advanced from December 31, 2019 to December 31, 2020, with limited exceptions.
Virginia will continue to not conform with the following:
- The bonus depreciation allowed for certain assets under federal law;
- the five-year carryback of certain federal net operating loss (NOL) deductions generated in the 2008 or 2009 taxable years;
- the federal income treatment of applicable high yield discount obligations; and
- the federal income tax treatment of cancellation of debt income realized in connection with certain business debts.
For the above conformity adjustments, the taxpayer may be required to make additions and/or subtractions in the account.
What else do I need to know?
For taxable year 2021, Virginia will also not conform to the increase in the medical expense deduction and the suspension of the limitation of itemized deductions. These provisions have already been incorporated into the Virginia Schedule A. Therefore, the taxpayer will not be required to make any additional additions or subtractions.