Virginia has made the following changes for the upcoming 2019 tax year:
Deductions & Subtractions:
- Increased Standard Deduction- For taxable years beginning January 1, 2019 to January 1, 2026, the standard deduction has increased from $3,000 to $4,500 for individuals and married filing separate returns and increased from $6,000 to $9,000 for married filing joint returns.
- Changes to Certain Itemized Deductions- beginning on or after January 1, 2019, taxpayers may claim a deduction for the actual amount of real and personal property taxes imposed by Virginia or any other taxing jurisdiction not otherwise deducted solely on account of the $10,000 annual limitation on the federal deduction for state and local taxes paid. Virginia also Virginia deconforms from the suspension of the overall limitation on itemized deductions, commonly known as
the Pease limitation.
- Taxpayer's may claim a subtraction for any gain that was recognized from the taking of real property by condemnation proceedings.
- Taxpayer's may take a subtraction from income regarding an investment in a Virginia real estate investment trust made on or after January 1, 2019 but before December 31, 2024.
- For taxable years beginning on and after January 1, 2018, an individual income tax deduction is allowed in an amount equal to 20% of the business interest that is disallowed for federal income tax purposes.
- There has been an extension to the sunset date of the Major Business Facility Job Tax Credit. The credit is now set to sunset for taxable years beginning on or after July 1, 2022.
- Any taxpayer holding a Port Volume Increase Tax Credit issued in taxable years beginning on and after January 1, 2018, but before January 1, 2022, may transfer unused but otherwise allowable credits to another taxpayer for use on the Virginia income tax return.
- The Telework Expenses Tax Credit has been repealed. This credit cannot be claimed for any taxable years beginning on or after January 1, 2019.
- The Worker Retraining Tax Credit sunset date has been moved up to January 1, 2019. Taxpayers will no longer be able to earn the Worker Retraining Tax Credit starting with the 2019 VA tax return. Credits earned in prior taxable years may be carried forward for up to 3 years.
- Beginning January 1, 2019, a business may receive a credit of up to $500 per qualified employee or up to $1,000 per non-highly compensated worker receiving eligible worker training.