By Mark Hodges, CPA | Family, Entrepreneur & Executive Advisory Services team
When considering the impacts of the Federal 2017 Tax Cuts and Jobs Act on individual state taxpayers, the Virginia General Assembly enacted emergency legislation in February of 2019 to provide an additional refund of up to $110 for single taxpayers (or $220 for married taxpayers filing a joint return).
What do I have to do to claim the additional refund offered to Virginia taxpayers as a result of Virginia conformity with the 2017 Tax Cuts and Jobs Act?
Nothing! Just be sure that you meet the requirements listed below. If you qualify, refunds will be automatically issued between October 1, 2019 and October 15, 2019.
What are the requirements to claim the refunds available?
1. Virginia Taxpayers must file a complete return for the 2018 tax year by July 1, 2019.
2. The refund is available up to the lesser of your total Virginia tax liability or the total available refund based on your filing status ($110 for single taxpayers, $220 for married taxpayers filing a joint return).
Where is Virginia getting their $110/$220 refund amount from?
If you’re curious as to how the Virginia Department of taxation arrived at these numbers, the refund was enacted to line up the changes in the Federal standard deduction with the Virginia standard deduction. As you’re well aware by now, the Federal standard deduction for taxpayers in 2018 increased from $6,350 for single taxpayers in 2017 ($12,700 for married taxpayers filing a joint return) to $12,000 for single taxpayers in 2018 ($24,000 for married taxpayers filing a joint return). When comparing the higher standard deduction as well as the $10,000 limit on state and local taxes at the Federal level, many taxpayers received a greater benefit from claiming the Federal standard deduction. However, Virginia law requires that taxpayers who claim the standard deduction on their Federal return must also claim the standard deduction on their Virginia return. As Virginia’s standard deduction remained consistent with 2017 at $3,000 for individual taxpayers ($6,000 for married taxpayers filing a joint return), Virginia is effectively bringing the tax impact of the 2019 legislated standard deduction increase ($4,500 for individual taxpayers, $9,000 for married taxpayers) to 2018 taxpayers, assuming that you meet the qualifications detailed above.
If you have any questions regarding Virginia’s “standard deduction” refunds, please reach out to your Keiter representative or Email | Call: 804.747.0000
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.