Summary
On February 15, Virginia Governor Ralph Northam (D) signed House Bill 2529. The bill includes an emergency clause that updates the Commonwealth’s conformity to the Internal Revenue Code (IRC) in effect on February 9, 2018, to the IRC “as [it] existed on” December 31, 2018. As emergency legislation, the bill will have retroactive application to January 1, 2018, and is effective for the 2018 tax year. With the passage of H.B. 2529, Virginia generally now conforms to most, but not all, of the 2017 federal tax reform law known as the Tax Cuts and Job Act (TCJA) amendments, for tax years beginning on or after January 1, 2018, with certain exceptions.
Details
The advancement of Virginia’s IRC conformity date brings the Commonwealth into general conformity with the IRC and, more importantly, with the TJCA. During the 2018 legislative session, changes due to the TCJA were adopted only for the 2017 tax year, leaving Virginia taxpayers in limbo with respect to all the TCJA amendments that were first effective with the 2018 tax year.
The bill also establishes the Taxpayer Relief Fund. For fiscal years 2019 through 2025, any additional revenues attributable to the TCJA, beyond those necessary to fund the provisions of the bill, would accrue to the fund. The bill directs the General Assembly to appropriate money from the fund to enact permanent or temporary tax reform measures.
What does this mean for VA businesses and individual tax payers? Click HERE to read more and find out if an amended return is in your future.
Want to connect with a local human? Email Lauren Soles lsoles@bdo.com to set up a call to answer your questions.
