A BILL to amend and reenact § 58.1-339.8 of the Code of Virginia, relating to earned income tax credit.
HB372 amends Virginia’s earned income tax credit statute, § 58.1-339.8, to change the state credit available to low-income taxpayers. The bill keeps the existing structure for the nonrefundable credit tied to household income and the federal Earned Income Tax Credit (EITC), but updates the refundable credit provisions so that eligible taxpayers may claim a refundable credit equal to 20 percent of the federal EITC for taxable years beginning on and after January 1, 2025 and before January 1, 2027. The bill also preserves the existing rule that taxpayers must choose among the available credit options and cannot claim more than one credit type for the same taxable year.
The measure continues to define key terms such as family Virginia adjusted gross income, household, poverty guidelines, and Virginia adjusted gross income, and it retains the limitation that the credit cannot exceed Virginia income tax liability for certain taxpayers. It also keeps the prohibition on claiming the credit in years when the taxpayer or a dependent claims certain other Virginia tax subtractions or deductions, including those related to retirement income and age or blindness-related exemptions. In practical terms, the bill affects low-income workers and families who qualify for the federal EITC and seek a corresponding Virginia credit.
HB372 would amend § 58.1-339.8 of the Code of Virginia, which governs the state income tax credit for low-income taxpayers, including the Virginia earned income tax credit. The bill primarily affects individual income tax filers who qualify for the federal EITC, especially those eligible for the refundable state credit, and it would continue to interact with Virginia’s income tax liability rules and other subtraction/deduction provisions. Because it is an amendment to an existing tax credit statute, the bill would alter how the credit is calculated and claimed for the specified tax years without creating a wholly new program.
The available legislative context suggests the bill did not advance in a contentious way, but instead was continued to the next session in the House Finance Committee by voice vote. That procedural outcome indicates limited recorded opposition in the available materials, though it also means the bill did not receive final approval during the session. No committee transcript or recorded roll-call vote is available here, so the broader sentiment can only be described as generally favorable or at least noncontroversial at the committee stage, with no documented debate in the provided record.
The main policy issue is the size and structure of the refundable earned income tax credit for low-income taxpayers. Supporters of the bill appear to favor preserving and extending the refundable credit at 20 percent of the federal EITC for the covered years, which would increase tax relief for qualifying households. Potential points of contention include the fiscal cost of a refundable credit, the temporary nature of the provision, and the interaction with other Virginia tax subtractions and deductions that can disqualify a taxpayer from claiming the credit in the same year. Because no transcript is provided, there is no specific recorded opposition or named critic in the available materials.