VirginiaVirginia taxpayers could subtract part of a federal overtime deduction
For tax years beginning in 2026, Virginia taxpayers could subtract 25 percent of an amount tied to a federal overtime deduction, rising to 50 percent in 2027.
What it does
Virginia taxpayers could subtract a share of an amount tied to a federal overtime deduction when calculating state taxable income.
Argument forEligible taxpayers may owe less Virginia income tax because the subtraction could reduce the overtime income counted in their state taxable income.
Argument againstThe benefit may be limited for workers whose federal overtime deduction is small or unavailable, since Virginia's subtraction is based on that federal amount.
More detail
Virginia taxpayers could subtract a share of an amount tied to a federal overtime deduction when calculating state taxable income. The provision applies to income attributable to overtime, to the extent it is included in federal adjusted gross income. The amount is based on the deduction the taxpayer was permitted under federal law. For tax years beginning in 2026, the share is 25 percent; for tax years beginning in 2027 or later, it is 50 percent.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jul 21Continued from last sessionLatest
- Jan 20Continued to next session in Finance and Appropriations (9-Y 5-N)
- Jan 17Fiscal Impact statement From TAX (1/17/2026 9:40 am)
- Jan 7Referred to Committee on Finance and AppropriationsMinor
- Jan 7Prefiled and ordered printed; Offered 01-14-2026 26104555DIntroduced
Taxes & Budget