Tax season can be a source of a headache for all with federal taxes having been due April 15 and the filing deadline for state taxes coming up on May 1. However, once state taxes are paid, money will be refunded this fall due to the GOP-led tax reform push that occurred in this year’s 46-day General Assembly session in Richmond.
Republican majorities in the House of Delegates and State Senate delivered on a key promise to return $976 million from the federal Tax Cuts and Jobs Act (TCJA) to Virginia taxpayers. The Commonwealth also saw a windfall of taxes paid in this year; therefore also causing refunds to be sent out to taxpayers this fall.
Additional tax refunds will amount to $110 for individuals and $220 for couples in October 2019, totaling $420 million in tax relief. Over the next two years, married couples will receive an average of $392 in tax relief.
Moreover, 70 percent of all rebates will go to taxpayers making $100,000 or less.
Republicans reiterated at the passage of the tax plan that the tax relief will not cost the state “one penny,” benefiting the Commonwealth’s General Fund.
Going forward, Virginia’s standard deduction has also been increased by 50 percent – the first such change for individual filers since 1989 – rising from $3,000 to $4,500 for individuals, and from $6,000 to $9,000 for couples. This provision will primarily benefit lower and middle-income taxpayers as it applies across the board.
Due to that, Virginians should have to pay fewer state taxes in the coming years.
The tax reform plan passed by the General Assembly also preserves existing state law on the deductibility of state and local taxes (SALT) instead of capping it at $10,000, thus preventing a double tax hike on homeowners.
By conforming Virginia tax law to the recently-altered federal law, Virginians should be able to file their state taxes without complications by May 1.