For taxable years beginning on or after January 1, 2025, and before January 1, 2027, Virginia has suspended its rolling conformity with the Internal Revenue Code (IRC). This means:
- Virginia will not automatically adopt federal tax changes made during this period.
- Taxpayers may need to make manual adjustments to their Virginia returns if federal law changes affect income, deductions, or credits.
- Virginia will continue to conform to the Inflation Reduction Act and the Consolidated Appropriations Act of 2023.
Virginia will continue to deconform from the following federal provisions:
- Bonus depreciation allowed for certain assets under federal law
- Five-year carryback of federal net operating loss (NOL) deductions from 2008 or 2009
- Federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F)
- Federal treatment of cancellation of debt income realized in connection with certain business debts
- Temporary changes from the CARES Act, including:
- Suspension of NOL limitations for 2018–2020
- Increased business interest limitation for 2019–2020
Taxpayers must add back the difference between regular depreciation and special depreciation if they used bonus depreciation on their federal return and it affected their Federal Adjusted Gross Income (FAGI). Example:
- Asset purchase price: $5,000
- Purchase date: 1/15/2016
- Depreciation method: 5-year MACRS
- Federal regular depreciation: $1,000 (20% of $5,000)
- Federal bonus depreciation: $3,000 (50% bonus + 20% of remaining balance)
- Virginia adjustment: $2,000 must be added back to Virginia taxable income
For Tax Years 2024 and Prior
Virginia maintained rolling conformity with the IRC during these years, meaning it generally adopted federal tax changes as they occurred. However, the same deconformity provisions listed above remained in effect. Taxpayers preparing returns for 2022, 2023, or 2024 should:
- Refer to the Virginia instructions for Form 760 and Schedule A.
- Apply required additions or subtractions for deconformity items.
- Continue to reference Federal Schedule A (Form 1040) when itemizing deductions, with exceptions such as: Virginia deconforms from the suspension of the Pease limitation (the overall limitation on itemized deductions) for taxable years beginning on or after January 1, 2019.
To enter adjustments for income taxed by Virginia but not by federal from the main menu of the state return select:
- Additions To Income
- Enter the Fixed Date Conformity (Bonus Depr)
TaxSlayer Pro strives to keep the information on this page timely and accurate but makes no promise or guarantee about the timeliness, accuracy, or completeness of the contents of this page. This is general information and is not intended to be tax advice. You are encouraged to also review the underlying state resources and publications.
Additional Information:
Virginia Form 760 Instructions