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2021 Session

Budget Amendments - SB1100 (Member Request)

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Chief Patron: Petersen
Co-Patron(s): Pillion
Income Tax Exclusion for Paycheck Protection Plan Loan Forgiveness and Deductibility (language only)

Item 4-14 #2s

Item 4-14 #2s

Effective Date
Effective Date

Language

Page 736, after line 32, insert:


"12. That § 58.1-321 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-321. Exemptions and exclusions.

A. No tax levied pursuant to § 58.1-320 is imposed, nor any return required to be filed, by:

1. A single individual where the Virginia adjusted gross income plus the modification specified in subdivision 5 of § 58.1-322.03 for such taxable year is less than $11,650 for taxable years beginning on and after January 1, 2010, but before January 1, 2012.

A single individual where the Virginia adjusted gross income plus the modification specified in subdivision 5 of § 58.1-322.03 for such taxable year is less than $11,950 for taxable years beginning on and after January 1, 2012.

2. An individual and spouse if their combined Virginia adjusted gross income plus the modification specified in subdivision 5 of § 58.1-322.03 is less than $23,300 for taxable years beginning on and after January 1, 2010 (or one-half of such amount in the case of a married individual filing a separate return) but before January 1, 2012, and less than $23,900 for taxable years beginning on and after January 1, 2012 (or one-half of such amount in the case of a married individual filing a separate return).

For the purposes of this section, "Virginia adjusted gross income" means federal adjusted gross income for the taxable years with the modifications specified in §§ 58.1-322.01 and 58.1-322.02.

B. Persons in the Armed Forces of the United States stationed on military or naval reservations within Virginia who are not domiciled in Virginia shall not be held liable to income taxation for compensation received from military or naval service.

C. For taxable years beginning on and after January 1, 2020, but before January 1, 2026, any amount that is includible in the federal adjusted gross income of an eligible veteran by reason of the whole or partial discharge of any loan described in § 108(f)(5)(B) of the Internal Revenue Code shall be excluded from Virginia adjusted gross income. This exclusion shall apply only to those discharges that (i) are described in clauses (i), (ii), and (iii) of §
108(f)(5)(A) of the Internal Revenue Code and (ii) occur after December 31, 2017. For the purposes of this subsection, "eligible veteran" means a veteran who has been rated by the U.S. Department of Veterans Affairs, or its successor agency pursuant to federal law, to have a 100 percent service-connected, permanent, and total disability.

D. For taxable years beginning on and after January 1, 2020, any amount that would otherwise be includible in the federal adjusted gross income of an eligible recipient by reason of forgiveness of indebtedness described in § 1106(b) of P.L. 116-136 (the Coronavirus Aid, Relief, and Economic Security Act) shall be excluded from Virginia adjusted gross income. For the purposes of this subsection, "eligible recipient" has the same meaning as that term is defined in § 1106(a) of P.L. 116-136. No taxpayer shall be denied an otherwise allowable deduction by reason of the exclusion from Virginia adjusted gross income provided by this subsection."

Page 736, line 33, strike "12" and insert "13".

Page 736, line 35, strike "13" and insert "14".

Page 736, line 35, strike "and eleventh" and insert "eleventh and twelfth".



Explanation

(This amendment is consistent with SB 1394. The amendment would establish an income tax exclusion for forgiveness of indebtedness on a loan received under the CARES Act through the Paycheck Protection Program (PPP), and it would provide that businesses who received federal PPP loans will be able to deduct forgiven loan income and expenses paid for by their PPP loans on the state income taxes.)