EARNED INCOME TAX CREDIT (EITC)
- Fully-Refundable: 15% of the federal credit
- Non-Refundable: 20% of the federal credit
Eligibility Requirements: All Virginia taxpayers who qualify for the federal credit are automatically eligible. (See the Virginia tax credit information page for details)
Latest Legislative Action: In 2022, lawmakers passed HB30, creating a refundable state EITC valued at 15% of the federal credit.2 The tax credit will be available for taxable years 2022 through 2025.
- During the 2015 legislative session, lawmakers considered two bills, SB 810 and HB 1831, which would have offered eligible taxpayers the option of claiming a refundable EITC worth 10% of the federal credit. However, both measures failed in committee votes.
- Virginia also offers a non-refundable Low Income Individuals Credit (CLI) to families with adjusted gross incomes below the federal poverty guidelines. The credit is worth $300 for each personal and dependent exemption claimed on the taxpayers’ Virginia tax return. Claimants may not file for both the CLI and the state EITC and must choose whichever is greater.
- During the 2010 legislative session, the Virginia General Assembly adopted a new provision in the state budget, which decoupled the state’s EITC from federal EITC improvements in the Recovery and Reinvestment Act, resulting in a $6 million tax increase for approximately 114,000 families with three or more children.
- In 2011, Gov. Bob McDonnell signed legislation that improved the state EITC by realigning the state credit with the federal expansion for one year. McDonnell again signed a one year extension of tax conformity in 2012, before approving a five year.
CHILD TAX CREDIT (CTC)
Virginia does not currently offer a state-level CTC.
CHILD AND DEPENDENT CARE TAX CREDIT (CDCTC)
Virginia does not currently offer a state-level CDCTC.
Notes: While Virginia does not have a state credit, it does allow a deduction for child care expenses equal to the amount of their CDCTC. In order to qualify, expenses must be eligible for the federal CDCTC. Maximum deductions are $3,000 for one qualifying dependent and $6,000 for two or more.3
- Virginia Earned Income Tax Credit (EITC) & Credit for Low-Income Individuals, Virginia Department of Taxation
- HB30, Budget Amendments, Virginia’s Legislative Information System
- Deductions, Virginia Department of Taxation