Virginia’s date of conformity with the Internal Revenue Code (IRC) was advanced from February 9, 2018 to December 31, 2018, with limited exceptions. Virginia will continue to deconform from 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.
At the time the instructions went to print, the only required fixed date conformity adjustments for “fixed date conformity” were those mentioned above. However, if legislation is enacted that results in changes to the IRC for the 2018 taxable year, taxpayers may need to make adjustments to their Virginia returns that are not described in these instructions. Information about any adjustments will be posted on the Department’s website at www.tax.virginia.gov.
Additional Information about conformity adjustments see Tax Bulletin 19-1