In addition to the deductions below, Virginia law allows for several subtractions from income that may reduce your tax liability. You should review these before completing your return.
If you claimed the standard deduction on your federal income tax return, you must also claim the standard deduction on your Virginia return. The Virginia standard deduction amounts are:
|Filing Status||Description||Standard Deduction|
|1||All Returns - Single||$3,000|
|2||All Returns - Married, Filing Jointly||$6,000|
|3||Form 760 (resident) - Married, filing separate returns||$3,000|
|3||Form 760PY (part-year resident) - Married, filing separate returns||$3,000*|
|3||Form 763 (nonresident) - Married, spouse has no income from any source||$3,000|
|4||Form 760 (resident)||N/A|
|4||Form 760-PY (part-year resident) - Married, filing separately on a combined return||$6,000*|
|4||Form 763 (nonresident) - Married, filing separate returns||$3,000|
* Part-year residents must prorate the standard deduction based on their period of residency. For details, see the instructions for Form 760-PY.
Virginia Itemized Deductions
If you claim itemized deductions on your federal income tax return, you must also itemize your deductions on your Virginia return. This requirement applies even if using the standard deduction would result in a greater tax benefit on your Virginia return.
You can generally claim the same deductions for Virginia purposes that you claimed on your federal Schedule A, except for the deduction for state and local income taxes. The computation is provided in the appropriate line instructions for each Virginia income tax return. You do not need to file a copy of your federal Schedule A.
Before computing the itemized deductions on your return, answer the following questions:
Part-year residents should complete the computation using only the deductions for which the underlying expense payments were made during their period of residency in Virginia.
Married Couples Filing Separate Returns
If you use Filing Status 3 on Form 760 or Form 760PY, or Filing Status 4 on Form 763, and you filed a joint federal income tax return, you must compute your Virginia itemized deductions as if you had filed a separate federal return. As a general rule, the spouse claiming a deduction on the federal return must be able to prove that he or she actually paid the underlying expense. In cases where the reporting spouse cannot separately account for underlying expenses, the itemized deductions may be allocated between the spouses based on percentage of income. For example, if the federal adjusted gross income (FAGI) attributable to the reporting spouse represents 25% of the couple's joint FAGI, then the reporting spouse may claim 25% of the total itemized deductions from Schedule A.
Child and Dependent Care Expenses
You may claim this deduction on your Virginia return only if you were eligible to claim a credit for child and dependent care expenses on your federal return. Enter the amount on which the federal credit for child and dependent care is based. (This is the amount on federal Form 2441 or Schedule 2 of Form 1040A that is multiplied by the decimal amount - up to $3,000 for one dependent and $6,000 for 2 or more.). Do not enter the federal credit amount.
Example: Jon and Mary have three children in day care. Both their incomes exceed the maximum federal child care expense amount of $6,000. Their actual child care expenses were $4,000. Therefore, on their federal return, their child care credit was based on $4,000 (from line 6 of Form 2441).
Based on the information from Form 2441, Jon and Mary will subtract $4,000 on their Virginia return - the expenses on which they based their credit.
Tip: The amount of employment-related expenses that may be subtracted is limited to the amount actually used in computing the federal credit for child and dependent care expenses. As a general rule, you are limited to a maximum of $3,000 for one child and $6,000 if you are claiming the expenses for two or more dependents, or the earned income of the spouse having the lowest income, whichever is less.
Caution: Filers often deduct their federal credit amount by mistake, which results in a much lower deduction. Be sure to use the qualified expense amount for your Virginia deduction.
Foster Care Deduction
Foster parents may claim a deduction of $1,000 for each child residing in their home under permanent foster care, as defined in the Code of Virginia, provided that they claim the foster child as a dependent on their federal and Virginia income tax returns.
Bone Marrow Screening Fee
Enter the amount of the fee paid for an initial screening to become a possible bone marrow donor, provided you were not reimbursed for the fee and did not claim a deduction for the fee on your federal return.
Virginia College Savings Plan Prepaid Tuition Contract Payments and College Savings Trust Account Contributions
If you are under age 70 on or before Dec. 31 of the taxable year, enter the lesser of $4,000 or the amount contributed during the taxable year to each Virginia529 account (Virginia 529 prePAID, Virginia 529 inVEST, College America, CollegeWealth). If you contributed more than $4,000 per account during the taxable year, you may carry forward any undeducted amounts until the contribution has been fully deducted. However, if you are age 70 or older on or before Dec. 31 of the taxable year, you may deduct the entire amount contributed during the taxable year. Only the owner of record for an account may claim a deduction for contributions made.
Continuing Teacher Education
A licensed primary or secondary school teacher may enter a deduction equal to 20% of unreimbursed tuition costs incurred to attend continuing teacher education courses that are required as a condition of employment, provided these expenses were not deducted from federal adjusted gross income.
Long-Term Health Care Premiums
Enter the amount of premiums paid for long-term health care insurance, provided that they were not actually included as a deduction on Schedule A of your federal income tax return. In addition, the premiums may not have been used as the basis of the Virginia Long-Term Care Insurance Credit, although the taxpayer may be able to claim both the credit and the Virginia deduction in the same year. For example, if an individual purchased a policy on July 1 and made payments on a monthly basis, he would claim a credit in the current taxable year for 6 months of premiums and a credit in the second year for the next six months of premiums in order to reach the allowed total of 12 months. In that case, the individual could also claim a deduction in the second year for the 6 months of premiums that were not used as a basis for the credit. See the Schedule CR instructions for more information.
Virginia Public School Construction Grants Program and Fund
Enter the amount of total contributions to the Virginia Public School Construction Grants Program and Fund, provided that you have not claimed a deduction for this amount on your federal income tax return.
Tobacco Quota Buyout
Allows a deduction from taxable income for payments received in the preceding year in accordance with the Tobacco Quota Buyout Program of the American Jobs Creation Act of 2004 to the extent included in federal adjusted gross income. For example, on your 2017 Virginia return you may deduct the portion of such payments received in 2016 that is included in your 2016 federal adjusted gross income; while payments received in 2017 may generate a deduction on your 2018 Virginia return. Individuals cannot claim a deduction for a payment that has been, or will be, subtracted by a corporation unless the subtraction is shown on a Schedule VK-1 you received from an S-corporation. If you chose to accept payment in installments, the gain from the installment received in the preceding year may be deducted. If, however, you opted to receive a single payment, 10% of the gain recognized for federal purposes in the year that the payment was received may be deducted in the following year and in each of the 9 succeeding taxable years.
Sales Tax Paid on Certain Energy Efficient Equipment or Appliances
Allows an income tax deduction for 20% of the sales tax paid on certain energy efficient equipment or appliances, up to $500 per year. If filing a joint return, you may deduct up to $1,000.
Organ and Tissue Donor Expenses
Allows a deduction for unreimbursed expenses that are paid by a living organ and tissue donor that have not been taken as a medical deduction on the taxpayer's federal income tax return. The amount of the deduction is the lesser of $5,000 or the actual amount paid by the taxpayer. If filing a joint return, the deduction is limited to $10,000 or the actual amount paid.
Enter the difference between 18 cents per mile and the charitable mileage deduction per mile allowed on federal Schedule A. If you used actual expenses for the charitable mileage deduction, and those expenses were less than 18 cents per mile, then you may use the difference between actual expenses and 18 cents per mile.
Virginia Bank Franchise Tax
A shareholder of a bank may be required to make certain adjustments to his or her federal adjusted gross income. Such adjustments are required only if the shareholder invests in a bank that (1) is subject to the Virginia Bank Franchise Tax for state tax purposes (Va. Code § 58.1-1207) and (2) has elected to be taxed as a small business corporation (S corporation) for federal tax purposes. Complete the worksheet below to determine the amount of your adjustment.
Computation of Virginia Bank Franchise Tax Deduction
A shareholder of a bank may be required to make certain adjustments to his or her federal adjusted gross income. Complete the worksheet below to determine the amount of your adjustment.
- If your allocable share of the income or gain of the bank was included in federal adjusted gross income, enter the amount here _____________________
- If your allocable share of the losses or deductions of the bank was included in federal adjusted gross income, enter the amount here. _____________________
- Enter the value of any distributions paid or distributed to you by the bank to the extent that such distributions were excluded from federal adjusted gross income. _____________________
- Add line b and Line c. _____________________
- Subtract line d from line a. This is your net deduction amount. If this amount is negative you must enter the amount on Schedule ADJ, line 8a and fill in the box marked "LOSS". _____________________
Income from Dealer Disposition of Property
Allows an adjustment for certain income from dealer dispositions of property made on or after Jan. 1, 2009. In the year of disposition the adjustment will be a subtraction for gain attributable to installment payments to be made in future taxable years provided that (i) the gain arises from an installment sale for which federal law does not permit the dealer to elect installment reporting of income, and (ii) the dealer elects installment treatment of the income for Virginia purposes on or before the due date prescribed by law for filing the taxpayer's income tax return. In subsequent taxable years the adjustment will be an addition for gain attributable to any payments made during the taxable year with respect to the disposition. In the years following the year of disposition, the taxpayer would be required to add back the amount that would have been reported under the installment method. Each disposition must be tracked separately for purposes of this adjustment.
Prepaid Funeral, Medical, and Dental Insurance Premiums
You may be allowed a deduction of payments for (i) a prepaid funeral insurance policy that covers you or (ii) medical or dental insurance premiums for any person for whom you may claim a deduction for such premiums under federal income tax laws. To qualify for this deduction, you must be age 66 or older with earned income of at least $20,000 for the taxable year and federal adjusted gross income not in excess of $30,000 for the taxable year. The deduction is not allowed for any portion of premiums for which you have been reimbursed, have claimed a deduction for federal income tax purposes, have claimed another Virginia income tax deduction or subtraction, or have claimed a federal income tax credit or any Virginia income tax credit.
ABLEnow Account Contributions
Effective for taxable years beginning on or after January 1, 2016, you may claim a deduction for the amount contributed during the taxable year to an ABLEnow account entered into with the Virginia College Savings Plan. No deduction is allowed if such contributions are deducted on the contributor’s federal income tax return. If the contribution to an ABLEnow account exceeds $2,000 the remainder may be carried forward and subtracted in future taxable years until the amount has been fully deducted; however, in no event shall the amount deducted in any taxable year exceed $2,000 per ABLEnow account. Deductions are subject to recapture in the taxable year or years in which distributions or refunds are made for any reason other than (i) to pay qualified disability expenses; or (ii) the beneficiary’s death. A contributor who is 70 or older is allowed a deduction for the full amount contributed to an ABLEnow account, less any amounts previously deducted..
If you were not allowed to deduct business interest on your federal income tax return due to §163(j) of the Internal Revenue Code, you may be able to subtract 20% of it on your Virginia income tax return.
Enclose an explanation for other deductions.