Virginians with lower income may qualify for one of several income-based tax credits:

  • Virginia Earned Income Tax Credit (Refundable)
  • Credit for Low Income Individuals
  • Virginia Earned Income Tax Credit (Non-refundable)

If you qualify, these credits can reduce the amount of tax you owe or increase your refund. Both the Credit for Low Income Individuals and the non-refundable Earned Income Tax Credit cannot exceed the total amount of your tax. 

You can only claim one of these credits, so choose the one that benefits you most. 

Virginia Earned Income Tax Credit (Refundable)
You may qualify to claim this credit if:

You qualified to claim an Earned Income Tax Credit on your federal income tax return. 

What is it?

An income tax credit equal to 15% of your federal Earned Income Tax Credit. The credit is refundable. 

If you claim this credit, you cannot claim a Credit for Low Income Individuals or a non-refundable Virginia Earned Income Tax Credit.

You also may not claim this credit if 

  • you were claimed as a dependent on someone else’s Virginia income tax return, or
  • you, your spouse, or any dependent listed on your return claimed one or more of the following exemptions, deductions, or subtractions:
    • subtraction for wages or salaries received by members of the Virginia National Guard
    • subtraction for up to $15,000 of military basic pay for military service personnel on extended active duty
    • subtraction for up to $15,000 of salary for a federal or state employee whose annual salary is $15,000 or less
    • additional personal exemption for blind or aged taxpayers 
    • age deduction

To claim your credit, complete the Virginia Earned Income Credit section of Schedule ADJ, and attach it to your Virginia income tax return. 

Credit for Low Income Individuals (CLI)
You may qualify to claim this credit if: 

Your family’s total Virginia adjusted gross income (VAGI) is below federal poverty guidelines.

What is it?

An income tax credit of up to $300 per each personal or dependent deduction claimed on your Virginia income tax return. The credit cannot exceed your tax liability. If you claim this credit, you cannot claim either of the Virginia Earned Income Tax Credits.

You also may not claim this credit if: 

  • you were claimed as a dependent on someone else’s Virginia income tax return, or
  • you, your spouse, or any dependent listed on your return claimed one or more of the following exemptions, deductions or subtractions:
    • subtraction for wages or salaries received by members of the Virginia National Guard
    • subtraction for up to $15,000 of military basic pay for military service personnel on extended active duty
    • subtraction for up to $15,000 of salary for a federal or state employee whose annual salary is $15,000 or less
    • additional personal exemption for blind or aged taxpayers (Note: If you qualify for both the Credit for Low-Income Individuals (CLI) and an additional exemption for blindness, it may be to your advantage to claim the CLI, rather than the additional exemption).
    • age deduction
What makes up family VAGI?

Virginia adjusted gross income (VAGI):

Federal adjusted gross income (from your federal income tax return)
+ any required additions to income
-  your Social Security income and any allowable subtractions from income. 
Virginia adjusted gross income

For further details, please see Form 760. 

To calculate your family’s VAGI, combine your VAGI with that of your spouse and any dependents you have, even if they were not required to file a Virginia income tax return.

Note for married couples filing separately:

Only one spouse may claim the credit. The spouse claiming the credit must include the other spouse’s VAGI, and the VAGI of any dependent the other spouse claims, in their total family VAGI to determine their eligibility for the credit. 

How can I tell if I qualify for the credit?

You qualify for the credit if your family’s total Virginia adjusted gross income (VAGI) is below federal poverty guidelines. For 2023:

If the number of eligible exemptions is: Your family Virginia adjusted income must be less than:
1 $14,580
2 $19,720
3 $24,860
4 $30,000
5 $35,140
6 $40,280
7 $45,420
8 $50,560

For each additional exemption over 8, add $5,140.

Eligible exemptions include personal exemptions only. You may not claim this credit if you also claim additional exemptions for blindness or age.

To claim the credit

Multiply the total number of personal exemptions claimed on your return by $300. The credit cannot be more than your total tax as shown on your Virginia income tax return. Complete the Credit for Low-Income Individuals section of Schedule ADJ, and attach it to your Virginia income tax return. 

Virginia Earned Income Tax Credit (Non-refundable)
You may qualify to claim this credit if:

You qualified to claim an Earned Income Tax Credit on your federal income tax return. 

What is it?

An income tax credit equal to 20% of your federal earned income tax credit. The credit is not refundable and cannot exceed your tax liability. If you claim this credit, you cannot claim a Credit for Low Income Individuals or a refundable Virginia Earned Income Tax Credit.  

You also may not claim this credit if 

  • you were claimed as a dependent on someone else’s Virginia income tax return, or
  • you, your spouse, or any dependent listed on your return claimed one or more of the following exemptions, deductions or subtractions:
    • subtraction for wages or salaries received by members of the Virginia National Guard
    • subtraction for up to $15,000 of military basic pay for military service personnel on extended active duty
    • subtraction for up to $15,000 of salary for a federal or state employee whose annual salary is $15,000 or less
    • additional personal exemption for blind or aged taxpayers 
    • age deduction

To claim your credit, complete the Virginia Earned Income Credit section of Schedule ADJ, and attach it to your Virginia income tax return.