Virginia has made the following changes for the upcoming 2022 tax year:
- Refundable EITC - Starting with tax year 2022 through 2025 residents of Virginia may claim a "Refundable Virginia Earned Income Tax Credit ("EITC") in lieu of one of the two nonrefundable credits that are already available. The new legislation will allow eligible full year residents to claim a refundable individual income tax credit which would equal 15% of the federal EITC claimed for that tax year.
- Beneficial Hardwood Management (Restoration and Afforestation) Tax Credit - Starting in tax year 2022 through 2024, a nonrefundable credit for individuals is available fore expenses incurred by a taxpayer for implementing beneficial hardwood management practices on at least five acres of forestland, or a one-acre minimum hardwood afforestation planting. The credit will equal the eligible expenses up to $1,000.
- Medical Expense Deduction - For the tax year 2022, Virginia will deconform from the increase in the medical expense deduction
- Standard Deduction Increase - An increase of the standard deduction has been enacted during the 2022 General Assembly increasing the standard deduction to $8,000 from $4,500 for single filers and $16,000 from $9,000 for married filers filing jointly.
- Educator Deduction - Beginning with tax year 2022 through 2024 a credit is available for individuals for up to $500 of expenses paid for eligible educator qualifying expenses. According to Virginia, "An eligible educator is an individual for at least 900 hours during the taxable year served as a Virginia licensed teacher, instructor, student counselor, special needs personnel, principal, or student aide for public or private primary and secondary school students in Virginia.
- Military Benefits Subtraction - Beginning in 2022, "certain military benefits received by an individual aged 55 or older may be subtracted from Virginia taxable Income." For 2022, the maximum subtraction is $10,000.