Virginia Enacts IRC Conformity Legislation

Recent Virginia legislation advances the state’s IRC conformity date to February 9, 2018. The previous IRC conformity date was December 31, 2016.

Virginia Conforms on Some Federal Provisions

The legislation specifically conforms Virginia to:

  • provisions of the Tax Cuts and Jobs Act effective for tax year 2017, other than the temporary enhancement of the medical expense deduction;
  • tax relief for certain 2016 disaster areas;
  • the extension of combat zone benefits to members of the armed forces serving in the Sinai Peninsula of Egypt; and
  • provisions of the Bipartisan Budget Act effective for tax year 2017.

Areas Where Virginia Does Not Conform

Under the legislation, Virginia does not conform to the following:

  • special bonus depreciation allowance for certain property;
  • five-year carryback period for certain net operating losses (NOLs);
  • deductions related to the original issue discount on applicable high-yield discount obligations;
  • exclusions related to cancellation of debt income;
  • the increased medical expense deduction for tax years 2017 and 2018
  • provisions of the Tax Cuts and Jobs Act effective for tax years other than 2017; and
  • provisions of the Bipartisan Budget Act effective for tax years other than 2017.

Ch. 14 (S.B. 230), Laws 2018, effective February 22, 2018; Ch. 15 (H.B. 154). Laws 2018, effective February 23. 2018

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