HB 472 — Income tax, state; increases standard deduction.

SESSION INTRODUCEDHOUSE 22100741DSUBSTITUTE I22105245D HOUSEAMENDMENT IN THE NATURE OF A SUBSTITUTE (Proposed by the House Committee on Finance on February 2, 2022) (Patron Prior to Substitute––Delegate McNamara) A BILL NO.to amend and reenact § 58.1-322.03 of the Code of Virginia, relating to income tax;

472standard Offereddeduction. January 12, 2022 N Prefiled January 11, 2022 T A Bdeduction.nd and reenact § 58.1-322.03 of the Code of Virginia, relating to income tax;

stanRardBe ––––––––––it Patrons––McNamara,enacted Avoli,by Ballard,the Bloxom,General Campbell,Assembly J.L.,of Cherry,Virginia: Cordoza, Davis, Fowler, O Greenhalgh, Kilgore, LaRock, Leftwich, March, McGuire, O'Quinn, Orrock, Runion, Scott, P.A.,D Tata, Taylor, Wachsmann, Walker, Ware, Wiley, Williams and Wyatt;

Senators:1.

Suetterlein§ and58.1-322.03. Ruff –––––––––– U Referred to Committee on Finance C –––––––––– 1.

That § 58.1-322.03 of the Code of Virginia is amended and reenacted as follows:

E § 58.1-322.03.

deductions.deductions.ed and reenacted as follows:

D In computing Virginia taxable income pursuant to § 58.1-322, there shall be deducted from Virginia adjusted gross income as defined in § 58.1-321:

The amount allowable for itemized deductions for federal income tax purposes where the taxpayer has elected for the taxable year to itemize deductions on his federal return, but reduced by the amount of income taxes imposed by the Commonwealth or any other taxing jurisdiction and deducteddeducteO on§ such170 federalof returnthe andInternal increasedRevenue byCode anfor amountmileage, that,results whenin addeda tomileage deduction at the amountstate deductedlevel underfor such purposes at a rate of 18 cents per mile;

orresultsor inU a mileage deduction at the state level for b.

(i) for taxable years beginning before January 1, 2019, and on and after January 1,72026,1,S2026, $3,000 for single individuals and $6,000 for married persons (one-half of such amounts in the case of a married individual filing a separate return) and;

(ii) for taxable years beginning on and afterafterEJanuary January 1, 2019, but before January 1, 2026 2022, $4,500 for single individuals and $9,000 for married persons (one-half of such amounts in the case of a married individual filing a separate return);

and (iii) for taxable years beginning on and after January 1, 2022, but before January 1, 2026, $9,000 for single individuals and $18,000 for Formarried purposespersons (one-half of thissuch section,amounts anyin personthe whocase mayof bea claimedmarried asS aindividual dependentfiling ona anotherseparate taxpayer'sreturn).return).

For purposes of this section, any person who may be claimed as a dependent on another taxpayer's return for the taxable year may compute the deduction only with respect to earned income.

2.B federal income tax purposes.amount of $930 for each personal exemption allowable to the taxpayer for b.

a.Each blind or aged taxpayer as defined under § 63(f) of the Internal Revenue Code shall be entitled to an additional personal exemption in the amount of $800.

AT deductionThe inadditional thededuction amount of $930 for eachblind personalor exemptionaged allowabletaxpayers toallowed theunder taxpayerthis forsubdivision federalshall incomebeI tax: purposes.

3335 b.allowable regardless of whether the taxpayer itemizes deductions for the taxable year for federal income 36 tax purposes.

EachT blind/ or38 agedbased taxpayer as defined under § 63(f)21 of the Internal Revenue Code shallfor beexpenses 34for entitledhousehold toand andependent additionalcare personalservicess exemption/ in39 thenecessary amountfor ofgainful $800.employment.

3540 The4. additional deduction for blind or aged taxpayers allowed under this subdivision shall be 36 allowable regardless of whether the taxpayer itemizes deductions for the taxable year for federal income tax3.

AAn additional $1,000 deduction equalfor toeach child residing for the amountentire oftaxable employment-relatedyear expensesin upona whichhome theunder federalpermanent creditfoster iscare basedplacement underas defined in § 2163.2-908, ofprovided that the Internaltaxpayer Revenuecan Codealso forcEaim expensesthe forchild householdas anda dependentpersonal careexemption servicesunder necessary§ for151 gainfulof employment.the Internal Revenue Code.

4.

An additional $1,000 deduction for each child residing for the entire taxable year in a home under permanent foster care placement as defined in § 63.2-908, provided that the taxpayer can also claim the child as a personal exemption under § 151 of the Internal Revenue Code.

For the purposes of this subdivision, "adjusted federal adjusted gross income" means federalfederalHadjusted adjusted gross income minus any benefits received under Title II of the Social Security Act and other benefitsbe4efits subject to federal income taxation solely pursuant to § 86 of the Internal Revenue Code, as amended.ame2ded.

6.donor, if (i) the individual is not reimbursed for such fee or (ii) the individual has not claimed aow deduction for the payment of such fee on his federal income tax return.

The1 amount7. an individual pays as a fee for an initial screening to become a possible bone marrow donor, if (i) the individual is not reimbursed for such fee or (ii) the individual has not claimed a ded7.

A deduction shall be allowed to the purchaser or contributor for the amount paid or contributed HB472 2 of 3 during the taxable year for a prepaid tuition contract or college savings trust account entered into with the Virginia College Savings Plan, pursuant to Chapter 7 (§ 23.1-700 et seq.) of Title 23.1.

No deduction HB472H1 2 of 3 shall be allowed pursuant to this subdivision 7 if such payments or contributions are deducted on the purchaser's or contributor's federal income tax return.

(ix) any advanced oil-fired furnace with a minimum annual fuel-utilization of 3 rating of 85;

The lesser of $5,000 or the amount actually paid by a living donor of an organ or other Iivingliving tissue for unreimbursed out-of-pocket expenses directly related to the donation that arose withNnwithin 12 months of such donation, provided that the provisionsdonor ofhas §not 213taken a medical deduction in accordance with of 3 the Internaltaxable Revenueyear Codein forwhich suchthe expenses.donation is made or the taxable year in which the 12-month periodken in expires.

The14. deduction may be taken in the taxable year in which the donation is made or the taxable year in which the 12-month periodT expires.

RFor 14.taxable years beginning on and after January 1, 2013, the amount an individual age 66 or excess of $30,000 for the year pays annually in premiums for (i) a prepaid funeral insurance policy covering the individual or (ii) medical or dental insurance for any person for whom individual tax filers "earned income" means the same as that term is defined in § 32(c) of the Internal Revenue Code.

ForThe taxablededuction yearsshall beginningnot onbe andallowed afterfor Januaryany 1,portion 2013, the amount an individual age 6O or excess of $30,000such for the year pays annually in premiums paid for (i)which a prepaid funeral insurance policy covering the individual orhas (ii)(a) medicalbeen orreimbursed, dental(b) insuranceclaimed fora anydeduction person for whomfederal individualincome tax filerspurposes, may(c) claimclaimed a deduction foror suchincome premiumstax undercredit federalpursuant incometo taxthis laws.chapter.

As used in this subdivisUon, "earned income" means the same as that term is defined in § 32(c) of the Internal Revenue Code.CThe been reimbursed, (b) claimed a deduction for federal income tax purposes, (c) claimed a deduction or) subtraction under another provision of this section, or (d) claimed a federal income tax credit or any income15. tax credit pursuant to this chapter.

DFor 15.taxable years beginning on and after January 1, 2018, 20 percent of business interest disallowed as a deduction pursuant to § 163(j) of the Internal Revenue Code.

For taxablepurposes years beginning on and after January 1, 2018, 20 percent of businessthHs interestRevenue subdivision,Code."business "business interest" means the same as that term is defined under § 163(j) of the Internal Revenue16. Code.

16.For taxable years beginning on and after January 1, 2019, the actual amount of real and personal solely on account of the dollar limitation imposed on individual deductions by § 164(b)(6)(B) oU the Internal Revenue Code.

For17. taxable years beginning on and after January 1, 2019, the actual amount of real and personal solely on account of the dollar limitation imposed on individual deductions by § 164(b)(6)(B) of the Internal Revenue Code.

HFor 17.taxable years beginning on and after January 1, 2020, but before January 1, 2021, upSto account of the portion of subdivision B 10 of § 58.1-301 related to Paycheck Protection ProgramEloans.