VirginiaVirginia taxpayers may claim set deductions and an earned-income credit
For tax years beginning in 2027, taxpayers who do not itemize may subtract set amounts, while eligible workers may claim a refundable credit for 2025 or 2026.
What it does
For tax years beginning in 2027 or later, taxpayers who do not itemize may subtract $3,000 if single or $6,000 if married. Married taxpayers filing separately may subtract half the married amount.
Eligible taxpayers may claim a refundable Virginia credit worth 20% of their federal earned income tax credit for tax years beginning in 2025 or 2026. They cannot also claim either alternative credit for that year.
Argument forEligible workers could receive a refundable state credit based on their federal earned income credit, which may help when their state tax bill is small.
Argument againstHouseholds choosing the refundable credit could not also claim either alternative credit that year, which may limit their tax-credit choices.
More detail
A taxpayer who does not itemize may subtract $3,000 if single or $6,000 if married. This applies to taxpayers who do not itemize deductions on their federal income tax return. A taxpayer who may be claimed as another person’s dependent may figure this deduction only from earned income. Married taxpayers filing separately may subtract half the married amount. These amounts apply to tax years beginning on or after January 1, 2027.
An eligible taxpayer may claim a refundable Virginia credit equal to 20% of the federal earned income tax credit. This applies to individuals and married couples filing jointly who qualify for the federal earned income tax credit. A household cannot claim this credit and either of the other two credits in this section for the same tax year. The credit applies to tax years beginning on or after January 1, 2025, and before January 1, 2027.
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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 10:20 am)
- 2025
- Nov 17Referred to Committee on Finance and AppropriationsMinor
- Nov 17Prefiled and ordered printed; Offered 01-14-2026 26100495DIntroduced
Taxes & Budget