Our program will automatically carry over some deductions on your Virginia state return. However, Virginia doesn’t tax certain types of income that the federal government does. If any of those were included in your Federal Adjusted Gross Income (AGI), enter the amount to subtract.
These subtractions are specific to Virginia and help to reduce tax liability.
VA "Other Subtractions" include:
- Military Pay attributable to Active Duty in Combat Zone (Code 30)
- Basic Military Pay (Code 38)
- Virginia National Guard Income (Code 28)
- Federal and State Employees - If you qualify as a federal or state employee and earn less than $15,000 annually from all employment, you may subtract up to $15,000 of the salary earned as a federal or state employee. The subtraction cannot exceed the actual salary received. Each spouse may qualify for the subtraction. If you elect to claim this, you may not claim the Low-Income Credit or Virginia Earned Income Credit. (Code 39)
- Tier 2 and other Railroad Retirement benefits (Code 22)
- Virginia Lottery Prizes (Code 24)
- Virginia College Savings Plan Income Distribution - Amount included in federal adjusted gross income that is attributable to a distribution of benefits or a refund from the Virginia529 or ABLE, in the event of a beneficiary’s death, disability or receipt of scholarship. (Code 34)
- Long Term Capital Gain - If the income is attributable to an investment in a "qualified business" or any other technology business approved by the Secretary of Administration. See instructions for full requirements. (Code 52)
- Income from Virginia Obligations - Income from interest on Virginia state bonds or municipal obligations and the gains from sales of those obligations to the extent they were included in your federal adjusted gross income. (Code 20)
- Federal work opportunity tax credit wages - The amount of wages or salaries eligible for the Work Opportunity Tax Credit that was included in your federal adjusted gross income. DO NOT enter the federal credit amount. (Code 21)
- Retirement plan income previously Taxed by Another State - Amount of retirement income received during the tax year on which another state taxed the contributions but were deductible on the federal return. The total amount of this subtraction cannot exceed the amount of the contributions previously taxed by another state, usually in a previous year. (Code 31)
- Income Received by Holocaust Victims (Code 40)
- Medal of Honor Recipients (Code 44)
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Certain Death Benefit Payments - A beneficiary taxpayer may subtract from Virginia taxable income any death benefit payments received from an annuity contract that are subject to federal income taxation. (Code 49) To qualify for this subtraction, the death benefit payment must meet all of the following conditions:
- Source Requirement: The payment must originate from an annuity contract established between a customer (the annuitant) and an insurance company.
- Payment Type: The benefit must be received by the beneficiary as a lump sum distribution.
- Taxability: The payment must be subject to federal income tax.
- Gains from Land Preservation (Code 51)
- Historic Rehabilitation (Code 53)
- Income for First-Time Home Buyer Savings Account - If included in federal adjusted gross income, a subtraction for income attributable to a first-time home buyer savings account that was taxed as interest, capital gains or other income. (Code 54)
- Discharge of Student Loans (Code 55)
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Real Estate Investment Trust (REIT) - Beginning on January 1, 2019, taxpayers may claim a subtraction for income attributable to an investment in a Virginia real estate investment trust made on or after January 1, 2019 but before December 31, 2024. Important: The subtraction is not allowed for individual taxpayers or available for tax year 2025.
- In order for the subtraction to be claimed on the investors’ income tax returns, the real estate investment trust in which they invest must be certified by the Department as a Virginia real estate investment trust for the taxable year during which the investment was made. If the fund is approved, a 9-digit certification number will be provided. Enter this number in the “Certification Number” space provided by the subtraction code. (Form 760 Instructions)
- Gain from Eminent Domain - Beginning on January 1, 2019, taxpayers may claim a subtraction for any gain recognized from the taking of real property by condemnation proceedings. (Code 58)
- Federal Partnership Income Subtraction -Income from a federal partnership audit may be subtracted from VA income if income was previously reported on the owner's VA return. (Code 59)
- Military Benefits - Beginning in tax year 2024, certain military benefits received by qualifying individuals may be subtracted from their Virginia income. The maximum amount of this deduction is $30,000 for tax year 2024 and $40,000 for tax year 2025 and after. (Code 60)
- Other Subtractions - If you have any other subtraction included in federal adjusted gross income which is not taxable in Virginia that is not listed above, enter the subtraction as "Other Subtractions" and provide an explanation in the space provided in the program. If you are filing by paper, enclose an explanation and supporting documentation. (Code 99)
What are the form and line numbers?
The total amount entered will be found on Schedule ADJ, Line 7 Total Subtractions and Form 760, Line 7.
Where to enter in the program?
Navigate to your state return using the main menu on the left, then follow the steps below to enter these subtractions into the program.
- State
- Subtractions From Income
- Other Subtractions
- Select Subtraction item from the drop down menu
- Enter the Subtraction Amount
Additional Information
Virginia Form 760 Resident Individual Income Tax Instructions