Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
6/27/2022

23VAC10-110-143. Virginia taxable income; deductions.

The following items shall be deducted in determining Virginia taxable income.

1. Itemized deductions.

a. Generally. Any taxpayer who itemizes his deductions for federal income tax purposes must also itemize deductions for Virginia income tax purposes. The federally allowable amount of itemized deductions (prior to the subtraction of the federal zero bracket amount) shall be subtracted from FAGI in determining Virginia taxable income, but must be reduced by any amount claimed as a deduction for income taxes paid to Virginia or any other state, locality, foreign country, or other taxing jurisdiction. (See subdivision 6 of 23VAC10-110-142.)

b. Additional deduction for charitable mileage. The amount of itemized deductions allowed for federal income tax purposes shall be increased to allow a deduction for Virginia purposes of 18 cents per mile for charitable contribution transportation. The additional Virginia deduction is allowed only with respect to transportation expenses allowed under IRC § 170 and only to the extent that such expenses are actually deducted for federal purposes.

The amount of charitable mileage expenses claimed for federal purposes is increased to result in a deduction of 18 cents per mile for Virginia purposes. If a person elects to compute the federal deduction based upon actual expenses, the increased Virginia deduction is computed by converting expenses to a per mile amount and adding to that an amount sufficient to equal 18 cents per mile. The amount of the addition is the additional Virginia deduction.

Example 1: Taxpayer A uses his automobile for charitable purposes and determines annual expenses (gasoline, oil, etc.) attributable to charitable usage to be $500, which is deducted as a charitable contribution for federal tax purposes. A drove his automobile 4,350 miles in incurring the $500 in expenses, which results in a per mile cost of 11.5 cents. Therefore A is entitled to an additional Virginia deduction of $282.75 computed as follows:

($.18 - $.115) = $.065 X 4,350 = $282.75

If the standard federal mileage rate for charitable mileage is used, the amount of the Virginia addition is the difference between the standard rate and 18 cents per mile.

Example 2: Taxpayer B is entitled to deduct expenses attributable to 5,555 miles of automobile use as a charitable contribution. B utilizes the standard mileage rate (9¢ per mile for taxable year 1983) and therefore is allowed a federal deduction of $500. B is entitled to an additional Virginia deduction of $500 computed as follows:

($.18 - $.09) = $.09 X 5,555 = $500

2. Standard deduction.

a. Generally. Any taxpayer who does not itemize deductions for federal purposes must claim the standard deduction in the computation of Virginia taxable income. The amount of the standard deduction for a single individual or a married couple filing jointly shall be fifteen percent (15%) of federal adjusted gross income not to exceed $2,000; except as set forth in c below, the standard deduction shall not be less than $1,300. In the case of a married individual filing a separate return or separately on a combined return, the standard deduction shall not exceed $1,000 or be less than $650.

b. Lump sum distribution. When any taxpayer has received a lump sum distribution from a qualified retirement plan and, under the provisions of IRC § 402, has elected to use the special ten-year averaging method for the computation of federal tax on the distribution, then for purposes of computing the standard deduction FAGI shall be increased by any amount of the distribution which has not been included in FAGI.

c. Dependents. Any individual who may be claimed as a dependent on another taxpayer's return may compute the standard deduction only with respect to earned income. As used in this section the term "earned income" shall mean wages, salaries or professional fees and other amounts received as compensation for professional services actually rendered, but does not include that part of the compensation derived by the taxpayer for personal services rendered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered. This rule applies to dependents under age 19 and full-time students who are eligible to be claimed on their parents, return even though the parents do not actually take the exemption.

3. Exemptions. There shall be deducted from FAGI $600 for each personal exemption allowed to the taxpayer for federal income tax purposes. For each exemption allowed to the taxpayer under the provisions of IRC § 151(c), there shall be deducted an additional $400. IRC § 151(c) allows an additional deduction for an individual who is at least 65 years of age during the taxable year. In the case of a husband and wife filing a joint return, each may claim the additional exemption if both are at least 65 years of age during the taxable year. This additional exemption may not be claimed for dependents even though such dependents may meet the age requirement. (Note: For purposes of qualifying for the additional federal exemption under IRC § 151(c), a person is deemed to be 65 years of age on the day before his birthday. For example, a person who is 65 on January 1, 1985 may claim the additional exemption for taxable year 1984.)

4. Child and dependent care. Effective for taxable years beginning on and after January l, 1982, the amount of employment-related expenses allowed for computing the federal child and dependent care credit (IRC § 44A) may be subtracted from FAGI in computing Virginia taxable income. The amount of employment-related expenses which may be subtracted is limited to that amount actually used in computing the federal credit. Such amount will be limited by the restrictions of IRC § 44A, including the maximum amount of expenses allowable in computing the federal credit and earned income limitations. This subtraction will further be limited to only expenses which qualify for federal credit. For example, if federal law places a ceiling on expenditures for purposes of computing the federal credit such ceiling will similarly limit the Virginia deduction.

The actual amount of the federal child and dependent care credit claimed has no bearing upon this deduction; only the base for computing the federal credit is relevant.

Statutory Authority

§§ 58.1-203 and 58.1-322 of the Code of Virginia.

Historical Notes

Derived from VR630-2-322 § 2, eff. January 21, 1987; amended, eff. February 1, 1987.

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