Virginia 2026 Appropriation Act tax provisions (HB 30)

changelog.d/va-educator-expense-deduction.added.md

@@ -0,0 +1 @@
+Add Virginia's eligible educator expense deduction (up to $500), reinstated for tax year 2026 and after by the 2026 Appropriation Act (HB 30).

changelog.d/va-refundable-eitc-2026-budget.changed.md

@@ -0,0 +1 @@
+Extend Virginia's 20% refundable EITC through tax year 2029 under the 2026 Appropriation Act (HB 30); it expires (0%) for tax years beginning on or after January 1, 2030.

changelog.d/va-standard-deduction-2026-budget.changed.md

@@ -0,0 +1 @@
+Raise Virginia's standard deduction under the 2026 Appropriation Act (HB 30) to $9,200 single / $18,400 joint for tax year 2027 and $9,300 / $18,600 for tax years 2028-2029, with the sunset to $3,000 / $6,000 moved to tax year 2030.

policyengine_us/parameters/gov/states/va/tax/income/credits/eitc/match/refundable.yaml

@@ -3,7 +3,7 @@ values:
   2021-01-01: 0
   2022-01-01: 0.15
   2025-01-01: 0.2
-  2027-01-01: 0.15
+  2030-01-01: 0
 
 metadata:
   period: year
@@ -26,4 +26,8 @@ metadata:
   # 2025 EITC reflected in statute
   - title: House Bill 1600 (2025 Appropriations Act)
     href: https://legiscan.com/VA/text/HB1600/id/3262750/Virginia-2025-HB1600-Chaptered.pdf#page=783
-
+  # HB 30 (2026) 3rd enactment clause extends the 20% refundable EITC through TY2029; it expires (0%) for TY2030+
+  - title: House Bill 30 (2026 Appropriation Act, Special Session I, Chapter 1), Item 4-14 #1c (third enactment clause)
+    href: https://budget.lis.virginia.gov/amendment/2026/2/HB30/Introduced/CR/4-14/1c
+  - title: Virginia Department of Taxation 2026 Legislative Summary - refundable EITC
+    href: https://www.tax.virginia.gov/sites/default/files/inline-files/2026-legislative-summary.pdf#page=9

policyengine_us/parameters/gov/states/va/tax/income/deductions/educator_expense/cap.yaml

@@ -0,0 +1,17 @@
+description: Virginia caps the eligible educator expense deduction at this amount per eligible educator. The deduction did not apply for tax year 2025.
+values:
+  2021-01-01: 0
+  2022-01-01: 500
+  2025-01-01: 0
+  2026-01-01: 500
+metadata:
+  unit: currency-USD
+  period: year
+  label: Virginia eligible educator expense deduction cap
+  reference:
+    - title: Code of Virginia § 58.1-322.03.18
+      href: https://law.lis.virginia.gov/vacode/title58.1/section58.1-322.03/
+    - title: House Bill 30 (2026 Appropriation Act, Special Session I, Chapter 1), third enactment clause - reinstates the deduction for tax year 2026 and after
+      href: https://budget.lis.virginia.gov/amendment/2026/2/HB30/Introduced/CR/4-14/1c
+    - title: Virginia Department of Taxation 2026 Legislative Summary - eligible educator expenses deduction
+      href: https://www.tax.virginia.gov/sites/default/files/inline-files/2026-legislative-summary.pdf#page=10

policyengine_us/parameters/gov/states/va/tax/income/deductions/standard.yaml

@@ -7,7 +7,7 @@ metadata:
   - filing_status
   reference:
   - title: Code of Virginia § 58.1-322.03.(1)(b)
-    href: https://law.lis.virginia.gov/vacodefull/title58.1/chapter3/article2/
+    href: https://law.lis.virginia.gov/vacode/title58.1/section58.1-322.03/
   - title: Virginia 2025 Form 760 Resident Individual Income Tax Instructions
     href: https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2025-760-instructions.pdf#page=17
   - title: Virginia 2024 Form 760 Resident Individual Income Tax Instructions
@@ -22,34 +22,48 @@ metadata:
     href: https://www.tax.virginia.gov/sites/default/files/inline-files/2023-legislative-summary.pdf#page=10
   - title: House Bill 1600 (2025 Appropriations Act)
     href: https://legiscan.com/VA/text/HB1600/id/3262750/Virginia-2025-HB1600-Chaptered.pdf#page=780
+  - title: House Bill 30 (2026 Appropriation Act, Special Session I, Chapter 1), Item 4-14 #1c
+    href: https://budget.lis.virginia.gov/amendment/2026/2/HB30/Introduced/CR/4-14/1c
+  - title: Virginia Department of Taxation 2026 Legislative Summary - standard deduction
+    href: https://www.tax.virginia.gov/sites/default/files/inline-files/2026-legislative-summary.pdf#page=9
 
 JOINT:
   2021-01-01: 9_000
   2022-01-01: 16_000
   2024-01-01: 17_000
   2025-01-01: 17_500
-  2027-01-01: 6_000
+  2027-01-01: 18_400
+  2028-01-01: 18_600
+  2030-01-01: 6_000
 SINGLE:
   2021-01-01: 4_500
   2022-01-01: 8_000
   2024-01-01: 8_500
   2025-01-01: 8_750
-  2027-01-01: 3_000
+  2027-01-01: 9_200
+  2028-01-01: 9_300
+  2030-01-01: 3_000
 SEPARATE:
   2021-01-01: 4_500
   2022-01-01: 8_000
   2024-01-01: 8_500
   2025-01-01: 8_750
-  2027-01-01: 3_000
+  2027-01-01: 9_200
+  2028-01-01: 9_300
+  2030-01-01: 3_000
 HEAD_OF_HOUSEHOLD:
   2021-01-01: 4_500
   2022-01-01: 8_000
   2024-01-01: 8_500
   2025-01-01: 8_750
-  2027-01-01: 3_000
+  2027-01-01: 9_200
+  2028-01-01: 9_300
+  2030-01-01: 3_000
 SURVIVING_SPOUSE:
   2021-01-01: 4_500
   2022-01-01: 8_000
   2024-01-01: 8_500
   2025-01-01: 8_750
-  2027-01-01: 3_000
+  2027-01-01: 9_200
+  2028-01-01: 9_300
+  2030-01-01: 3_000

policyengine_us/tests/policy/baseline/gov/states/va/tax/income/credits/eitc/va_refundable_eitc_if_claimed.yaml

@@ -31,3 +31,38 @@
     eitc: 0
   output:
     va_refundable_eitc_if_claimed: 0
+
+# HB 30 (2026) extends the 20% refundable rate through TY2029. Under prior law
+# the rate reverted after TY2026; these years now stay at 20%.
+- name: VA 2027 Refundable EITC still at 20%
+  period: 2027
+  input:
+    state_code: VA
+    eitc: 5_000
+  output:
+    va_refundable_eitc_if_claimed: 1_000
+
+- name: VA 2028 Refundable EITC still at 20%
+  period: 2028
+  input:
+    state_code: VA
+    eitc: 5_000
+  output:
+    va_refundable_eitc_if_claimed: 1_000
+
+- name: VA 2029 Refundable EITC still at 20%
+  period: 2029
+  input:
+    state_code: VA
+    eitc: 5_000
+  output:
+    va_refundable_eitc_if_claimed: 1_000
+
+# The refundable EITC expires for taxable years beginning on/after 2030.
+- name: VA 2030 Refundable EITC has expired
+  period: 2030
+  input:
+    state_code: VA
+    eitc: 5_000
+  output:
+    va_refundable_eitc_if_claimed: 0

policyengine_us/tests/policy/baseline/gov/states/va/tax/income/deductions/educator_expense/va_educator_expense_deduction.yaml

@@ -0,0 +1,151 @@
+# Virginia eligible educator expense deduction (Va. Code 58.1-322.03): the lesser
+# of $500 or eligible educator expenses not claimed federally, per eligible
+# educator. Reinstated for TY2026+ by the 2026 Appropriation Act (HB 30); it did
+# not apply for TY2025. Eligible expenses are an explicit input (default $0).
+
+- name: 2026 educator deduction defaults to zero with no expenses
+  period: 2026
+  input:
+    state_code: VA
+  output:
+    va_educator_expense_deduction: 0
+
+- name: 2026 educator deduction is the lesser of expenses and the $500 cap
+  period: 2026
+  input:
+    people:
+      person1:
+        va_educator_expenses: 800
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: VA
+  output:
+    va_educator_expense_deduction: 500
+
+- name: 2026 educator deduction below the cap equals the expenses
+  period: 2026
+  input:
+    people:
+      person1:
+        va_educator_expenses: 300
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: VA
+  output:
+    va_educator_expense_deduction: 300
+
+- name: 2025 educator deduction is unavailable even with expenses
+  period: 2025
+  input:
+    people:
+      person1:
+        va_educator_expenses: 400
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: VA
+  output:
+    va_educator_expense_deduction: 0
+
+- name: 2026 non-Virginia filer receives no educator deduction
+  period: 2026
+  input:
+    people:
+      person1:
+        va_educator_expenses: 400
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MD
+  output:
+    va_educator_expense_deduction: 0
+
+- name: 2026 the $500 cap applies per eligible educator
+  period: 2026
+  input:
+    people:
+      person1:
+        va_educator_expenses: 500
+      person2:
+        va_educator_expenses: 500
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: VA
+  output:
+    va_educator_expense_deduction: 1_000
+
+- name: 2026 educator deduction reduces Virginia taxable income
+  period: 2026
+  input:
+    people:
+      person1:
+        va_educator_expenses: 400
+    tax_units:
+      tax_unit:
+        members: [person1]
+        va_agi: 50_000
+        va_deductions: 0
+        va_total_exemptions: 0
+    households:
+      household:
+        members: [person1]
+        state_code: VA
+  output:
+    va_educator_expense_deduction: 400
+    va_taxable_income: 49_600
+
+- name: 2024 educator deduction was available under prior law
+  period: 2024
+  input:
+    people:
+      person1:
+        va_educator_expenses: 800
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: VA
+  output:
+    va_educator_expense_deduction: 500
+
+# Regression: the cap is defined before 2022 (0), so pre-2022 VA taxable-income
+# calculations do not error on a missing parameter value.
+- name: 2021 educator deduction is zero and taxable income still computes
+  period: 2021
+  input:
+    people:
+      person1:
+        va_educator_expenses: 400
+    tax_units:
+      tax_unit:
+        members: [person1]
+        va_agi: 50_000
+        va_deductions: 0
+        va_total_exemptions: 0
+    households:
+      household:
+        members: [person1]
+        state_code: VA
+  output:
+    va_educator_expense_deduction: 0
+    va_taxable_income: 50_000