{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-322.02.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-322.02.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-322.02.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-322.02.html"}],"law_id":81784,"edition_id":1,"section_id":81784,"structure_id":15071,"section_number":"58.1-322.02","catch_line":"Virginia taxable income; subtractions","history":"2017, cc. 444, 762; 2018, c. 821; 2019, c. 270; 2020, cc. 324, 375, 738, 900; 2021, Sp. Sess. I, cc. 117, 118, 552; 2022, cc. 3, 19, 572, 573; 2022, Sp. Sess. I, cc. 1, 2, 14, 15; 2023, cc. 584, 585; 2023, Sp. Sess. I, c. 1; 2024, c. 217.","full_text":"In computing Virginia taxable income pursuant to \u00a7 58.1-322, to the extent included in federal adjusted gross income, there shall be subtracted:\n\n1\n\nIncome derived from obligations, or on the sale or exchange of obligations, of the United States and on obligations or securities of any authority, commission, or instrumentality of the United States to the extent exempt from state income taxes under the laws of the United States, including, but not limited to, stocks, bonds, treasury bills, and treasury notes but not including interest on refunds of federal taxes, interest on equipment purchase contracts, or interest on other normal business transactions.2\n\nIncome derived from obligations, or on the sale or exchange of obligations, of the Commonwealth or of any political subdivision or instrumentality of the Commonwealth.3\n\nBenefits received under Title II of the Social Security Act and other benefits subject to federal income taxation solely pursuant to § 86 of the Internal Revenue Code.4\n\nUp to $20,000 of disability income, as defined in § 22(c)(2)(B)(iii) of the Internal Revenue Code; however, any person who claims a deduction under subdivision 5 of § 58.1-322.03 may not also claim a subtraction under this subdivision.5\n\nThe amount of any refund or credit for overpayment of income taxes imposed by the Commonwealth or any other taxing jurisdiction.6\n\nThe amount of wages or salaries eligible for the federal Work Opportunity Credit which was not deducted for federal purposes on account of the provisions of § 280C(a) of the Internal Revenue Code.7\n\nAny amount included therein less than $600 from a prize awarded by the Virginia Lottery.8\n\nThe wages or salaries received by any person for active and inactive service in the National Guard of the Commonwealth of Virginia, (i) for taxable years beginning before January 1, 2023, not to exceed the amount of income derived from 39 calendar days of such service or $3,000, whichever amount is less; however, only those persons in the ranks of O3 and below shall be entitled to the subtractions specified in this clause, and (ii) for taxable years beginning on or after January 1, 2023, not to exceed the amount of income derived from 39 calendar days of such service or $5,500, whichever amount is less; however, only those persons in the ranks of O6 and below shall be entitled to the subtractions specified in this clause.9\n\nAmounts received by an individual, not to exceed $1,000 for taxable years beginning on or before December 31, 2019, and $5,000 for taxable years beginning on or after January 1, 2020, as a reward for information provided to a law-enforcement official or agency, or to a nonprofit corporation created exclusively to assist such law-enforcement official or agency, in the apprehension and conviction of perpetrators of crimes. This subdivision shall not apply to the following: an individual who is an employee of, or under contract with, a law-enforcement agency, a victim or the perpetrator of the crime for which the reward was paid, or any person who is compensated for the investigation of crimes or accidents.10\n\nThe amount of “qualified research expenses” or “basic research expenses” eligible for deduction for federal purposes, but which were not deducted, on account of the provisions of § 280C(c) of the Internal Revenue Code and which shall be available to partners, shareholders of S corporations, and members of limited liability companies to the extent and in the same manner as other deductions may pass through to such partners, shareholders, and members.11\n\nAny income received during the taxable year derived from a qualified pension, profit-sharing, or stock bonus plan as described by § 401 of the Internal Revenue Code, an individual retirement account or annuity established under § 408 of the Internal Revenue Code, a deferred compensation plan as defined by § 457 of the Internal Revenue Code, or any federal government retirement program, the contributions to which were deductible from the taxpayer’s federal adjusted gross income, but only to the extent the contributions to such plan or program were subject to taxation under the income tax in another state.12\n\nAny income attributable to a distribution of benefits or a refund from a prepaid tuition contract or savings trust account with the Commonwealth Savers Plan, created pursuant to Chapter 7 (§ 23.1-700 et seq.) of Title 23.1. The subtraction for any income attributable to a refund shall be limited to income attributable to a refund in the event of a beneficiary’s death, disability, or receipt of a scholarship.13\n\nAll military pay and allowances, to the extent included in federal adjusted gross income and not otherwise subtracted, deducted, or exempted under this section, earned by military personnel while serving by order of the President of the United States with the consent of Congress in a combat zone or qualified hazardous duty area that is treated as a combat zone for federal tax purposes pursuant to § 112 of the Internal Revenue Code.14\n\nFor taxable years beginning before January 1, 2015, the gain derived from the sale or exchange of real property or the sale or exchange of an easement to real property which results in the real property or the easement thereto being devoted to open-space use, as that term is defined in § 58.1-3230, for a period of time not less than 30 years. To the extent that a subtraction is taken in accordance with this subdivision, no tax credit under this chapter for donating land for its preservation shall be allowed for three years following the year in which the subtraction is taken.15\n\nFifteen thousand dollars of military basic pay for military service personnel on extended active duty for periods in excess of 90 days; however, the subtraction amount shall be reduced dollar-for-dollar by the amount by which the taxpayer’s military basic pay exceeds $15,000 and shall be reduced to zero if such military basic pay amount is equal to or exceeds $30,000.16\n\nThe first $15,000 of salary for each federal and state employee whose total annual salary from all employment for the taxable year is $15,000 or less.17\n\nUnemployment benefits taxable pursuant to § 85 of the Internal Revenue Code.18\n\na. Any amount received as military retirement income by an individual awarded the Congressional Medal of Honor.\n\t\t\tb. For taxable years beginning on and after January 1, 2022, but before January 1, 2023, up to $10,000 of military benefits; and for taxable years beginning on and after January 1, 2023, but before January 1, 2024, up to $20,000 of military benefits.\n\t\t\tc. For taxable years beginning on and after January 1, 2024, but before January 1, 2025, up to $30,000 of military benefits; and for taxable years beginning on and after January 1, 2025, up to $40,000 of military benefits.\n\t\t\td. For purposes of subdivisions b and c, “military benefits” means any (i) military retirement income received for service in the Armed Forces of the United States, (ii) qualified military benefits received pursuant to § 134 of the Internal Revenue Code, (iii) benefits paid to the surviving spouse of a veteran of the Armed Forces of the United States under the Survivor Benefit Plan program established by the U.S. Department of Defense, and (iv) military benefits paid to the surviving spouse of a veteran of the Armed Forces of the United States. The subtraction allowed by subdivision b shall be allowed only for military benefits received by an individual age 55 or older. The subtraction allowed by subdivision c shall be allowed for military benefits received by an individual of any age. No subtraction shall be allowed pursuant to subdivisions b and c if a credit, exemption, subtraction, or deduction is claimed for the same income pursuant to subdivision a or any other provision of Virginia or federal law.19\n\nItems of income attributable to, derived from, or in any way related to (i) assets stolen from, hidden from, or otherwise lost by an individual who was a victim or target of Nazi persecution or (ii) damages, reparations, or other consideration received by a victim or target of Nazi persecution to compensate such individual for performing labor against his will under the threat of death, during World War II and its prelude and direct aftermath. This subtraction shall not apply to assets acquired with such items of income or with the proceeds from the sale of assets stolen from, hidden from, or otherwise lost to, during World War II and its prelude and direct aftermath, a victim or target of Nazi persecution. The provisions of this subdivision shall only apply to an individual who was the first recipient of such items of income and who was a victim or target of Nazi persecution, or a spouse, surviving spouse, or child or stepchild of such victim.\n\t\t\tAs used in this subdivision:\n\t\t\t“Nazi regime” means the country of Nazi Germany, areas occupied by Nazi Germany, those European countries allied with Nazi Germany, or any other neutral European country or area in Europe under the influence or threat of Nazi invasion.\n\t\t\t“Victim or target of Nazi persecution” means any individual persecuted or targeted for persecution by the Nazi regime who had assets stolen from, hidden from, or otherwise lost as a result of any act or omission in any way relating to (i) the Holocaust, (ii) World War II and its prelude and direct aftermath, (iii) transactions with or actions of the Nazi regime, (iv) treatment of refugees fleeing Nazi persecution, or (v) the holding of such assets by entities or persons in the Swiss Confederation during World War II and its prelude and aftermath. A “victim or target of Nazi persecution” also includes any individual forced into labor against his will, under the threat of death, during World War II and its prelude and direct aftermath.20\n\nThe military death gratuity payment made after September 11, 2001, to the survivor of deceased military personnel killed in the line of duty, pursuant to 10 U.S.C. Chapter 75; however, the subtraction amount shall be reduced dollar-for-dollar by the amount that the survivor may exclude from his federal gross income in accordance with § 134 of the Internal Revenue Code.21\n\nThe death benefit payments from an annuity contract that are received by a beneficiary of such contract, provided that (i) the death benefit payment is made pursuant to an annuity contract with an insurance company and (ii) the death benefit payment is paid solely by lump sum. The subtraction under this subdivision shall be allowed only for that portion of the death benefit payment that is included in federal adjusted gross income.22\n\nAny gain recognized from the sale of launch services to space flight participants, as defined in 49 U.S.C. § 70102, or launch services intended to provide individuals with the training or experience of a launch, without performing an actual launch. To qualify for a deduction under this subdivision, launch services must be performed in Virginia or originate from an airport or spaceport in Virginia.23\n\nAny gain recognized as a result of resupply services contracts for delivering payload, as defined in 49 U.S.C. § 70102, entered into with the Commercial Orbital Transportation Services division of the National Aeronautics and Space Administration or other space flight entity, as defined in § 8.01-227.8, and launched from an airport or spaceport in Virginia.24\n\nAny income taxed as a long-term capital gain for federal income tax purposes, or any income taxed as investment services partnership interest income (otherwise known as investment partnership carried interest income) for federal income tax purposes. To qualify for a subtraction under this subdivision, such income shall be attributable to an investment in a “qualified business,” as defined in § 58.1-339.4, or in any other technology business approved by the Secretary of Administration, provided that the business has its principal office or facility in the Commonwealth and less than $3 million in annual revenues in the fiscal year prior to the investment. To qualify for a subtraction under this subdivision, the investment shall be made between the dates of April 1, 2010, and June 30, 2020. No taxpayer who has claimed a tax credit for an investment in a “qualified business” under § 58.1-339.4 shall be eligible for the subtraction under this subdivision for an investment in the same business.25\n\nFor taxable years beginning on and after January 1, 2014, any income of an account holder for the taxable year taxed as (i) a capital gain for federal income tax purposes attributable to such person’s first-time home buyer savings account established pursuant to Chapter 12 (§ 36-171 et seq.) of Title 36 and (ii) interest income or other income for federal income tax purposes attributable to such person’s first-time home buyer savings account.\n\t\t\tNotwithstanding the statute of limitations on assessments contained in § 58.1-312, any subtraction taken under this subdivision shall be subject to recapture in the taxable year or years in which moneys or funds withdrawn from the first-time home buyer savings account were used for any purpose other than the payment of eligible costs by or on behalf of a qualified beneficiary, as provided under § 36-174. The amount subject to recapture shall be a portion of the amount withdrawn in the taxable year that was used for other than the payment of eligible costs, computed by multiplying the amount withdrawn and used for other than the payment of eligible costs by the ratio of the aggregate earnings in the account at the time of the withdrawal to the total balance in the account at such time.\n\t\t\tHowever, recapture shall not apply to the extent of moneys or funds withdrawn that were (i) withdrawn by reason of the qualified beneficiary’s death or disability; (ii) a disbursement of assets of the account pursuant to a filing for protection under the United States Bankruptcy Code, 11 U.S.C. §§ 101 through 1330; or (iii) transferred from an account established pursuant to Chapter 12 (§ 36-171 et seq.) of Title 36 into another account established pursuant to such chapter for the benefit of another qualified beneficiary.\n\t\t\tFor purposes of this subdivision, “account holder,” “eligible costs,” “first-time home buyer savings account,” and “qualified beneficiary” mean the same as those terms are defined in § 36-171.26\n\nFor taxable years beginning on and after January 1, 2015, any income for the taxable year attributable to the discharge of a student loan solely by reason of the student’s death. For purposes of this subdivision, “student loan” means the same as that term is defined under § 108(f) of the Internal Revenue Code.27\n\na. Income, including investment services partnership interest income (otherwise known as investment partnership carried interest income), attributable to an investment in a Virginia venture capital account. To qualify for a subtraction under this subdivision, the investment shall be made on or after January 1, 2018, but before December 31, 2023. No subtraction shall be allowed under this subdivision for an investment in a company that is owned or operated by a family member or an affiliate of the taxpayer. No subtraction shall be allowed under this subdivision for a taxpayer who has claimed a subtraction under subdivision 24 or a tax credit under § 58.1-339.4 for the same investment.\n\t\t\tb. As used in this subdivision 27:\n\t\t\t“Qualified portfolio company” means a company that (i) has its principal place of business in the Commonwealth; (ii) has a primary purpose of production, sale, research, or development of a product or service other than the management or investment of capital; and (iii) provides equity in the company to the Virginia venture capital account in exchange for a capital investment. “Qualified portfolio company” does not include a company that is an individual or sole proprietorship.\n\t\t\t“Virginia venture capital account” means an investment fund that has been certified by the Department as a Virginia venture capital account. In order to be certified as a Virginia venture capital account, the operator of the investment fund shall register the investment fund with the Department prior to December 31, 2023, (i) indicating that it intends to invest at least 50 percent of the capital committed to its fund in qualified portfolio companies and (ii) providing documentation that it employs at least one investor who has at least four years of professional experience in venture capital investment or substantially equivalent experience. “Substantially equivalent experience” includes, but is not limited to, an undergraduate degree from an accredited college or university in economics, finance, or a similar field of study. The Department may require an investment fund to provide documentation of the investor’s training, education, or experience as deemed necessary by the Department to determine substantial equivalency. If the Department determines that the investment fund employs at least one investor with the experience set forth herein, the Department shall certify the investment fund as a Virginia venture capital account at such time as the investment fund actually invests at least 50 percent of the capital committed to its fund in qualified portfolio companies.28\n\na. Income attributable to an investment in a Virginia real estate investment trust. To qualify for a subtraction under this subdivision, the investment shall be made on or after January 1, 2019, but before December 31, 2024. No subtraction shall be allowed for an investment in a trust that is managed by a family member or an affiliate of the taxpayer. No subtraction shall be allowed under this subdivision for a taxpayer who has claimed a subtraction under subdivision 24 or 27 or a tax credit under § 58.1-339.4 for the same investment.\n\t\t\tb. As used in this subdivision 28:\n\t\t\t“Distressed” means satisfying the criteria applicable to a locality described in subdivision E 2 of § 2.2-115.\n\t\t\t“Double distressed” means satisfying the criteria applicable to a locality described in subdivision E 3 of § 2.2-115.\n\t\t\t“Virginia real estate investment trust” means a real estate investment trust, as defined in 26 U.S.C. § 856, that has been certified by the Department as a Virginia real estate investment trust. In order to be certified as a Virginia real estate investment trust, the trustee shall register the trust with the Department prior to December 31, 2024, indicating that it intends to invest at least 90 percent of trust funds in Virginia and at least 40 percent of trust funds in real estate in localities that are distressed or double distressed. If the Department determines that the trust satisfies the preceding criteria, the Department shall certify the trust as a Virginia real estate investment trust at such time as the trust actually invests at least 90 percent of trust funds in Virginia and at least 40 percent of trust funds in real estate in localities that are distressed or double distressed.29\n\nFor taxable years beginning on and after January 1, 2019, any gain recognized from the taking of real property by condemnation proceedings.30\n\nFor taxable years beginning before January 1, 2021, up to $100,000 of all grant funds received by the taxpayer under the Rebuild Virginia program established by the Governor and administered by the Department of Small Business and Supplier Diversity.31\n\nFor taxable years beginning on and after January 1, 2022, any compensation for wrongful incarceration awarded pursuant to the procedures established under Article 18.2 (§ 8.01-195.10 et seq.) of Chapter 3 of Title 8.01.","order_by":null,"text":{"0":{"id":293016,"text":"In computing Virginia taxable income pursuant to \u00a7 58.1-322, to the extent included in federal adjusted gross income, there shall be subtracted:","type":"section","prefixes":[""],"prefix":"","entire_prefix":"","prefix_anchor":"","level":1,"next_prefix":"1"},"1":{"id":293017,"text":"Income derived from obligations, or on the sale or exchange of obligations, of the United States and on obligations or securities of any authority, commission, or instrumentality of the United States to the extent exempt from state income taxes under the laws of the United States, including, but not limited to, stocks, bonds, treasury bills, and treasury notes but not including interest on refunds of federal taxes, interest on equipment purchase contracts, or interest on other normal business transactions.","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"prior_prefix":"","next_prefix":"2"},"2":{"id":293018,"text":"Income derived from obligations, or on the sale or exchange of obligations, of the Commonwealth or of any political subdivision or instrumentality of the Commonwealth.","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1","next_prefix":"3"},"3":{"id":293019,"text":"Benefits received under Title II of the Social Security Act and other benefits subject to federal income taxation solely pursuant to § 86 of the Internal Revenue Code.","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"4":{"id":293020,"text":"Up to $20,000 of disability income, as defined in § 22(c)(2)(B)(iii) of the Internal Revenue Code; however, any person who claims a deduction under subdivision 5 of § 58.1-322.03 may not also claim a subtraction under this subdivision.","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3","next_prefix":"5"},"5":{"id":293021,"text":"The amount of any refund or credit for overpayment of income taxes imposed by the Commonwealth or any other taxing jurisdiction.","type":"section","prefixes":["5"],"prefix":"5","entire_prefix":"5","prefix_anchor":"5","level":1,"prior_prefix":"4","next_prefix":"6"},"6":{"id":293022,"text":"The amount of wages or salaries eligible for the federal Work Opportunity Credit which was not deducted for federal purposes on account of the provisions of § 280C(a) of the Internal Revenue Code.","type":"section","prefixes":["6"],"prefix":"6","entire_prefix":"6","prefix_anchor":"6","level":1,"prior_prefix":"5","next_prefix":"7"},"7":{"id":293023,"text":"Any amount included therein less than $600 from a prize awarded by the Virginia Lottery.","type":"section","prefixes":["7"],"prefix":"7","entire_prefix":"7","prefix_anchor":"7","level":1,"prior_prefix":"6","next_prefix":"8"},"8":{"id":293024,"text":"The wages or salaries received by any person for active and inactive service in the National Guard of the Commonwealth of Virginia, (i) for taxable years beginning before January 1, 2023, not to exceed the amount of income derived from 39 calendar days of such service or $3,000, whichever amount is less; however, only those persons in the ranks of O3 and below shall be entitled to the subtractions specified in this clause, and (ii) for taxable years beginning on or after January 1, 2023, not to exceed the amount of income derived from 39 calendar days of such service or $5,500, whichever amount is less; however, only those persons in the ranks of O6 and below shall be entitled to the subtractions specified in this clause.","type":"section","prefixes":["8"],"prefix":"8","entire_prefix":"8","prefix_anchor":"8","level":1,"prior_prefix":"7","next_prefix":"9"},"9":{"id":293025,"text":"Amounts received by an individual, not to exceed $1,000 for taxable years beginning on or before December 31, 2019, and $5,000 for taxable years beginning on or after January 1, 2020, as a reward for information provided to a law-enforcement official or agency, or to a nonprofit corporation created exclusively to assist such law-enforcement official or agency, in the apprehension and conviction of perpetrators of crimes. This subdivision shall not apply to the following: an individual who is an employee of, or under contract with, a law-enforcement agency, a victim or the perpetrator of the crime for which the reward was paid, or any person who is compensated for the investigation of crimes or accidents.","type":"section","prefixes":["9"],"prefix":"9","entire_prefix":"9","prefix_anchor":"9","level":1,"prior_prefix":"8","next_prefix":"10"},"10":{"id":293026,"text":"The amount of “qualified research expenses” or “basic research expenses” eligible for deduction for federal purposes, but which were not deducted, on account of the provisions of § 280C(c) of the Internal Revenue Code and which shall be available to partners, shareholders of S corporations, and members of limited liability companies to the extent and in the same manner as other deductions may pass through to such partners, shareholders, and members.","type":"section","prefixes":["10"],"prefix":"10","entire_prefix":"10","prefix_anchor":"10","level":1,"prior_prefix":"9","next_prefix":"11"},"11":{"id":293027,"text":"Any income received during the taxable year derived from a qualified pension, profit-sharing, or stock bonus plan as described by § 401 of the Internal Revenue Code, an individual retirement account or annuity established under § 408 of the Internal Revenue Code, a deferred compensation plan as defined by § 457 of the Internal Revenue Code, or any federal government retirement program, the contributions to which were deductible from the taxpayer’s federal adjusted gross income, but only to the extent the contributions to such plan or program were subject to taxation under the income tax in another state.","type":"section","prefixes":["11"],"prefix":"11","entire_prefix":"11","prefix_anchor":"11","level":1,"prior_prefix":"10","next_prefix":"12"},"12":{"id":293028,"text":"Any income attributable to a distribution of benefits or a refund from a prepaid tuition contract or savings trust account with the Commonwealth Savers Plan, created pursuant to Chapter 7 (§ 23.1-700 et seq.) of Title 23.1. The subtraction for any income attributable to a refund shall be limited to income attributable to a refund in the event of a beneficiary’s death, disability, or receipt of a scholarship.","type":"section","prefixes":["12"],"prefix":"12","entire_prefix":"12","prefix_anchor":"12","level":1,"prior_prefix":"11","next_prefix":"13"},"13":{"id":293029,"text":"All military pay and allowances, to the extent included in federal adjusted gross income and not otherwise subtracted, deducted, or exempted under this section, earned by military personnel while serving by order of the President of the United States with the consent of Congress in a combat zone or qualified hazardous duty area that is treated as a combat zone for federal tax purposes pursuant to § 112 of the Internal Revenue Code.","type":"section","prefixes":["13"],"prefix":"13","entire_prefix":"13","prefix_anchor":"13","level":1,"prior_prefix":"12","next_prefix":"14"},"14":{"id":293030,"text":"For taxable years beginning before January 1, 2015, the gain derived from the sale or exchange of real property or the sale or exchange of an easement to real property which results in the real property or the easement thereto being devoted to open-space use, as that term is defined in § 58.1-3230, for a period of time not less than 30 years. To the extent that a subtraction is taken in accordance with this subdivision, no tax credit under this chapter for donating land for its preservation shall be allowed for three years following the year in which the subtraction is taken.","type":"section","prefixes":["14"],"prefix":"14","entire_prefix":"14","prefix_anchor":"14","level":1,"prior_prefix":"13","next_prefix":"15"},"15":{"id":293031,"text":"Fifteen thousand dollars of military basic pay for military service personnel on extended active duty for periods in excess of 90 days; however, the subtraction amount shall be reduced dollar-for-dollar by the amount by which the taxpayer’s military basic pay exceeds $15,000 and shall be reduced to zero if such military basic pay amount is equal to or exceeds $30,000.","type":"section","prefixes":["15"],"prefix":"15","entire_prefix":"15","prefix_anchor":"15","level":1,"prior_prefix":"14","next_prefix":"16"},"16":{"id":293032,"text":"The first $15,000 of salary for each federal and state employee whose total annual salary from all employment for the taxable year is $15,000 or less.","type":"section","prefixes":["16"],"prefix":"16","entire_prefix":"16","prefix_anchor":"16","level":1,"prior_prefix":"15","next_prefix":"17"},"17":{"id":293033,"text":"Unemployment benefits taxable pursuant to § 85 of the Internal Revenue Code.","type":"section","prefixes":["17"],"prefix":"17","entire_prefix":"17","prefix_anchor":"17","level":1,"prior_prefix":"16","next_prefix":"18"},"18":{"id":293034,"text":"a. Any amount received as military retirement income by an individual awarded the Congressional Medal of Honor.\n\t\t\tb. For taxable years beginning on and after January 1, 2022, but before January 1, 2023, up to $10,000 of military benefits; and for taxable years beginning on and after January 1, 2023, but before January 1, 2024, up to $20,000 of military benefits.\n\t\t\tc. For taxable years beginning on and after January 1, 2024, but before January 1, 2025, up to $30,000 of military benefits; and for taxable years beginning on and after January 1, 2025, up to $40,000 of military benefits.\n\t\t\td. For purposes of subdivisions b and c, “military benefits” means any (i) military retirement income received for service in the Armed Forces of the United States, (ii) qualified military benefits received pursuant to § 134 of the Internal Revenue Code, (iii) benefits paid to the surviving spouse of a veteran of the Armed Forces of the United States under the Survivor Benefit Plan program established by the U.S. Department of Defense, and (iv) military benefits paid to the surviving spouse of a veteran of the Armed Forces of the United States. The subtraction allowed by subdivision b shall be allowed only for military benefits received by an individual age 55 or older. The subtraction allowed by subdivision c shall be allowed for military benefits received by an individual of any age. No subtraction shall be allowed pursuant to subdivisions b and c if a credit, exemption, subtraction, or deduction is claimed for the same income pursuant to subdivision a or any other provision of Virginia or federal law.","type":"section","prefixes":["18"],"prefix":"18","entire_prefix":"18","prefix_anchor":"18","level":1,"prior_prefix":"17","next_prefix":"19"},"19":{"id":293035,"text":"Items of income attributable to, derived from, or in any way related to (i) assets stolen from, hidden from, or otherwise lost by an individual who was a victim or target of Nazi persecution or (ii) damages, reparations, or other consideration received by a victim or target of Nazi persecution to compensate such individual for performing labor against his will under the threat of death, during World War II and its prelude and direct aftermath. This subtraction shall not apply to assets acquired with such items of income or with the proceeds from the sale of assets stolen from, hidden from, or otherwise lost to, during World War II and its prelude and direct aftermath, a victim or target of Nazi persecution. The provisions of this subdivision shall only apply to an individual who was the first recipient of such items of income and who was a victim or target of Nazi persecution, or a spouse, surviving spouse, or child or stepchild of such victim.\n\t\t\tAs used in this subdivision:\n\t\t\t“Nazi regime” means the country of Nazi Germany, areas occupied by Nazi Germany, those European countries allied with Nazi Germany, or any other neutral European country or area in Europe under the influence or threat of Nazi invasion.\n\t\t\t“Victim or target of Nazi persecution” means any individual persecuted or targeted for persecution by the Nazi regime who had assets stolen from, hidden from, or otherwise lost as a result of any act or omission in any way relating to (i) the Holocaust, (ii) World War II and its prelude and direct aftermath, (iii) transactions with or actions of the Nazi regime, (iv) treatment of refugees fleeing Nazi persecution, or (v) the holding of such assets by entities or persons in the Swiss Confederation during World War II and its prelude and aftermath. A “victim or target of Nazi persecution” also includes any individual forced into labor against his will, under the threat of death, during World War II and its prelude and direct aftermath.","type":"section","prefixes":["19"],"prefix":"19","entire_prefix":"19","prefix_anchor":"19","level":1,"prior_prefix":"18","next_prefix":"20"},"20":{"id":293036,"text":"The military death gratuity payment made after September 11, 2001, to the survivor of deceased military personnel killed in the line of duty, pursuant to 10 U.S.C. Chapter 75; however, the subtraction amount shall be reduced dollar-for-dollar by the amount that the survivor may exclude from his federal gross income in accordance with § 134 of the Internal Revenue Code.","type":"section","prefixes":["20"],"prefix":"20","entire_prefix":"20","prefix_anchor":"20","level":1,"prior_prefix":"19","next_prefix":"21"},"21":{"id":293037,"text":"The death benefit payments from an annuity contract that are received by a beneficiary of such contract, provided that (i) the death benefit payment is made pursuant to an annuity contract with an insurance company and (ii) the death benefit payment is paid solely by lump sum. The subtraction under this subdivision shall be allowed only for that portion of the death benefit payment that is included in federal adjusted gross income.","type":"section","prefixes":["21"],"prefix":"21","entire_prefix":"21","prefix_anchor":"21","level":1,"prior_prefix":"20","next_prefix":"22"},"22":{"id":293038,"text":"Any gain recognized from the sale of launch services to space flight participants, as defined in 49 U.S.C. § 70102, or launch services intended to provide individuals with the training or experience of a launch, without performing an actual launch. To qualify for a deduction under this subdivision, launch services must be performed in Virginia or originate from an airport or spaceport in Virginia.","type":"section","prefixes":["22"],"prefix":"22","entire_prefix":"22","prefix_anchor":"22","level":1,"prior_prefix":"21","next_prefix":"23"},"23":{"id":293039,"text":"Any gain recognized as a result of resupply services contracts for delivering payload, as defined in 49 U.S.C. § 70102, entered into with the Commercial Orbital Transportation Services division of the National Aeronautics and Space Administration or other space flight entity, as defined in § 8.01-227.8, and launched from an airport or spaceport in Virginia.","type":"section","prefixes":["23"],"prefix":"23","entire_prefix":"23","prefix_anchor":"23","level":1,"prior_prefix":"22","next_prefix":"24"},"24":{"id":293040,"text":"Any income taxed as a long-term capital gain for federal income tax purposes, or any income taxed as investment services partnership interest income (otherwise known as investment partnership carried interest income) for federal income tax purposes. To qualify for a subtraction under this subdivision, such income shall be attributable to an investment in a “qualified business,” as defined in § 58.1-339.4, or in any other technology business approved by the Secretary of Administration, provided that the business has its principal office or facility in the Commonwealth and less than $3 million in annual revenues in the fiscal year prior to the investment. To qualify for a subtraction under this subdivision, the investment shall be made between the dates of April 1, 2010, and June 30, 2020. No taxpayer who has claimed a tax credit for an investment in a “qualified business” under § 58.1-339.4 shall be eligible for the subtraction under this subdivision for an investment in the same business.","type":"section","prefixes":["24"],"prefix":"24","entire_prefix":"24","prefix_anchor":"24","level":1,"prior_prefix":"23","next_prefix":"25"},"25":{"id":293041,"text":"For taxable years beginning on and after January 1, 2014, any income of an account holder for the taxable year taxed as (i) a capital gain for federal income tax purposes attributable to such person’s first-time home buyer savings account established pursuant to Chapter 12 (§ 36-171 et seq.) of Title 36 and (ii) interest income or other income for federal income tax purposes attributable to such person’s first-time home buyer savings account.\n\t\t\tNotwithstanding the statute of limitations on assessments contained in § 58.1-312, any subtraction taken under this subdivision shall be subject to recapture in the taxable year or years in which moneys or funds withdrawn from the first-time home buyer savings account were used for any purpose other than the payment of eligible costs by or on behalf of a qualified beneficiary, as provided under § 36-174. The amount subject to recapture shall be a portion of the amount withdrawn in the taxable year that was used for other than the payment of eligible costs, computed by multiplying the amount withdrawn and used for other than the payment of eligible costs by the ratio of the aggregate earnings in the account at the time of the withdrawal to the total balance in the account at such time.\n\t\t\tHowever, recapture shall not apply to the extent of moneys or funds withdrawn that were (i) withdrawn by reason of the qualified beneficiary’s death or disability; (ii) a disbursement of assets of the account pursuant to a filing for protection under the United States Bankruptcy Code, 11 U.S.C. §§ 101 through 1330; or (iii) transferred from an account established pursuant to Chapter 12 (§ 36-171 et seq.) of Title 36 into another account established pursuant to such chapter for the benefit of another qualified beneficiary.\n\t\t\tFor purposes of this subdivision, “account holder,” “eligible costs,” “first-time home buyer savings account,” and “qualified beneficiary” mean the same as those terms are defined in § 36-171.","type":"section","prefixes":["25"],"prefix":"25","entire_prefix":"25","prefix_anchor":"25","level":1,"prior_prefix":"24","next_prefix":"26"},"26":{"id":293042,"text":"For taxable years beginning on and after January 1, 2015, any income for the taxable year attributable to the discharge of a student loan solely by reason of the student’s death. For purposes of this subdivision, “student loan” means the same as that term is defined under § 108(f) of the Internal Revenue Code.","type":"section","prefixes":["26"],"prefix":"26","entire_prefix":"26","prefix_anchor":"26","level":1,"prior_prefix":"25","next_prefix":"27"},"27":{"id":293043,"text":"a. Income, including investment services partnership interest income (otherwise known as investment partnership carried interest income), attributable to an investment in a Virginia venture capital account. To qualify for a subtraction under this subdivision, the investment shall be made on or after January 1, 2018, but before December 31, 2023. No subtraction shall be allowed under this subdivision for an investment in a company that is owned or operated by a family member or an affiliate of the taxpayer. No subtraction shall be allowed under this subdivision for a taxpayer who has claimed a subtraction under subdivision 24 or a tax credit under § 58.1-339.4 for the same investment.\n\t\t\tb. As used in this subdivision 27:\n\t\t\t“Qualified portfolio company” means a company that (i) has its principal place of business in the Commonwealth; (ii) has a primary purpose of production, sale, research, or development of a product or service other than the management or investment of capital; and (iii) provides equity in the company to the Virginia venture capital account in exchange for a capital investment. “Qualified portfolio company” does not include a company that is an individual or sole proprietorship.\n\t\t\t“Virginia venture capital account” means an investment fund that has been certified by the Department as a Virginia venture capital account. In order to be certified as a Virginia venture capital account, the operator of the investment fund shall register the investment fund with the Department prior to December 31, 2023, (i) indicating that it intends to invest at least 50 percent of the capital committed to its fund in qualified portfolio companies and (ii) providing documentation that it employs at least one investor who has at least four years of professional experience in venture capital investment or substantially equivalent experience. “Substantially equivalent experience” includes, but is not limited to, an undergraduate degree from an accredited college or university in economics, finance, or a similar field of study. The Department may require an investment fund to provide documentation of the investor’s training, education, or experience as deemed necessary by the Department to determine substantial equivalency. If the Department determines that the investment fund employs at least one investor with the experience set forth herein, the Department shall certify the investment fund as a Virginia venture capital account at such time as the investment fund actually invests at least 50 percent of the capital committed to its fund in qualified portfolio companies.","type":"section","prefixes":["27"],"prefix":"27","entire_prefix":"27","prefix_anchor":"27","level":1,"prior_prefix":"26","next_prefix":"28"},"28":{"id":293044,"text":"a. Income attributable to an investment in a Virginia real estate investment trust. To qualify for a subtraction under this subdivision, the investment shall be made on or after January 1, 2019, but before December 31, 2024. No subtraction shall be allowed for an investment in a trust that is managed by a family member or an affiliate of the taxpayer. No subtraction shall be allowed under this subdivision for a taxpayer who has claimed a subtraction under subdivision 24 or 27 or a tax credit under § 58.1-339.4 for the same investment.\n\t\t\tb. As used in this subdivision 28:\n\t\t\t“Distressed” means satisfying the criteria applicable to a locality described in subdivision E 2 of § 2.2-115.\n\t\t\t“Double distressed” means satisfying the criteria applicable to a locality described in subdivision E 3 of § 2.2-115.\n\t\t\t“Virginia real estate investment trust” means a real estate investment trust, as defined in 26 U.S.C. § 856, that has been certified by the Department as a Virginia real estate investment trust. In order to be certified as a Virginia real estate investment trust, the trustee shall register the trust with the Department prior to December 31, 2024, indicating that it intends to invest at least 90 percent of trust funds in Virginia and at least 40 percent of trust funds in real estate in localities that are distressed or double distressed. If the Department determines that the trust satisfies the preceding criteria, the Department shall certify the trust as a Virginia real estate investment trust at such time as the trust actually invests at least 90 percent of trust funds in Virginia and at least 40 percent of trust funds in real estate in localities that are distressed or double distressed.","type":"section","prefixes":["28"],"prefix":"28","entire_prefix":"28","prefix_anchor":"28","level":1,"prior_prefix":"27","next_prefix":"29"},"29":{"id":293045,"text":"For taxable years beginning on and after January 1, 2019, any gain recognized from the taking of real property by condemnation proceedings.","type":"section","prefixes":["29"],"prefix":"29","entire_prefix":"29","prefix_anchor":"29","level":1,"prior_prefix":"28","next_prefix":"30"},"30":{"id":293046,"text":"For taxable years beginning before January 1, 2021, up to $100,000 of all grant funds received by the taxpayer under the Rebuild Virginia program established by the Governor and administered by the Department of Small Business and Supplier Diversity.","type":"section","prefixes":["30"],"prefix":"30","entire_prefix":"30","prefix_anchor":"30","level":1,"prior_prefix":"29","next_prefix":"31"},"31":{"id":293047,"text":"For taxable years beginning on and after January 1, 2022, any compensation for wrongful incarceration awarded pursuant to the procedures established under Article 18.2 (§ 8.01-195.10 et seq.) of Chapter 3 of Title 8.01.","type":"section","prefixes":["31"],"prefix":"31","entire_prefix":"31","prefix_anchor":"31","level":1,"prior_prefix":"30"}},"ancestry":[{"id":15071,"edition_id":1,"name":"Individual Income Tax","identifier":"2","label":"article","depth":4,"order_by":1,"parent_id":13152,"metadata":{},"date_created":"2026-06-26 03:51:58","date_modified":"2026-06-26 03:51:58","permalink":{"id":253971,"object_type":"structure","relational_id":15071,"identifier":"2","token":"58.1\/I\/3\/2","url":"\/58.1\/I\/3\/2\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13152,"edition_id":1,"name":"Income Tax","identifier":"3","label":"chapter","depth":3,"order_by":1,"parent_id":12837,"metadata":{},"date_created":"2026-06-26 03:44:21","date_modified":"2026-06-26 03:44:21","permalink":{"id":253267,"object_type":"structure","relational_id":13152,"identifier":"3","token":"58.1\/I\/3","url":"\/58.1\/I\/3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12837,"edition_id":1,"name":"Taxes Administered by the Department of Taxation","identifier":"I","label":"subtitle","depth":2,"order_by":1,"parent_id":12703,"metadata":{},"date_created":"2026-06-26 03:43:55","date_modified":"2026-06-26 03:43:55","permalink":{"id":252075,"object_type":"structure","relational_id":12837,"identifier":"I","token":"58.1\/I","url":"\/58.1\/I\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12703,"edition_id":1,"name":"Taxation","identifier":"58.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":251959,"object_type":"structure","relational_id":12703,"identifier":"58.1","token":"58.1","url":"\/58.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":62270,"structure_id":15071,"section_number":"58.1-320","catch_line":"Imposition of tax","url":"\/58.1-320\/","token":"58.1\/I\/3\/2\/58.1-320","metadata":false},{"id":77087,"structure_id":15071,"section_number":"58.1-321","catch_line":"Exemptions and exclusions","url":"\/58.1-321\/","token":"58.1\/I\/3\/2\/58.1-321","metadata":false},{"id":74654,"structure_id":15071,"section_number":"58.1-322","catch_line":"Virginia taxable income of residents","url":"\/58.1-322\/","token":"58.1\/I\/3\/2\/58.1-322","metadata":false},{"id":85168,"structure_id":15071,"section_number":"58.1-322.01","catch_line":"Virginia taxable income; additions","url":"\/58.1-322.01\/","token":"58.1\/I\/3\/2\/58.1-322.01","metadata":false},{"id":81784,"structure_id":15071,"section_number":"58.1-322.02","catch_line":"Virginia taxable income; subtractions","url":"\/58.1-322.02\/","token":"58.1\/I\/3\/2\/58.1-322.02","metadata":false},{"id":79461,"structure_id":15071,"section_number":"58.1-322.03","catch_line":"Virginia taxable income; deductions","url":"\/58.1-322.03\/","token":"58.1\/I\/3\/2\/58.1-322.03","metadata":false},{"id":67865,"structure_id":15071,"section_number":"58.1-322.04","catch_line":"Virginia taxable income; additional modifications","url":"\/58.1-322.04\/","token":"58.1\/I\/3\/2\/58.1-322.04","metadata":false},{"id":82610,"structure_id":15071,"section_number":"58.1-322.1","catch_line":"Expired","url":"\/58.1-322.1\/","token":"58.1\/I\/3\/2\/58.1-322.1","metadata":false},{"id":68261,"structure_id":15071,"section_number":"58.1-322.2","catch_line":"Expired","url":"\/58.1-322.2\/","token":"58.1\/I\/3\/2\/58.1-322.2","metadata":false},{"id":60516,"structure_id":15071,"section_number":"58.1-323","catch_line":"Repealed","url":"\/58.1-323\/","token":"58.1\/I\/3\/2\/58.1-323","metadata":false},{"id":87236,"structure_id":15071,"section_number":"58.1-323.1","catch_line":"Repealed","url":"\/58.1-323.1\/","token":"58.1\/I\/3\/2\/58.1-323.1","metadata":false},{"id":76604,"structure_id":15071,"section_number":"58.1-324","catch_line":"Married individuals","url":"\/58.1-324\/","token":"58.1\/I\/3\/2\/58.1-324","metadata":false},{"id":57460,"structure_id":15071,"section_number":"58.1-325","catch_line":"Virginia taxable income of nonresident individuals, partners, beneficiaries and certain shareholders","url":"\/58.1-325\/","token":"58.1\/I\/3\/2\/58.1-325","metadata":false},{"id":86632,"structure_id":15071,"section_number":"58.1-326","catch_line":"Married individuals when one nonresident","url":"\/58.1-326\/","token":"58.1\/I\/3\/2\/58.1-326","metadata":false}],"previous_section":{"id":85168,"structure_id":15071,"section_number":"58.1-322.01","catch_line":"Virginia taxable income; additions","url":"\/58.1-322.01\/","token":"58.1\/I\/3\/2\/58.1-322.01","metadata":false},"next_section":{"id":79461,"structure_id":15071,"section_number":"58.1-322.03","catch_line":"Virginia taxable income; deductions","url":"\/58.1-322.03\/","token":"58.1\/I\/3\/2\/58.1-322.03","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/58.1-322.02\/","history_text":"

This law was first created in 2017. The record of its establishment is cataloged in chapters 444<\/a> and 762<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 6 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 2018, chapter 821<\/a>; in 2019, chapter 270<\/a>; in 2020, chapters 324<\/a>, 375<\/a>, 738<\/a>, and 900<\/a>; in 2022, chapters 3<\/a>, 19<\/a>, 572<\/a>, and 573<\/a>; in 2023, chapters 584<\/a> and 585<\/a>; in 2024, chapter 217<\/a>.<\/p>","references":[{"id":75675,"section_number":"36-174","catch_line":"Withdrawal of funds from account for purposes other than eligible costs for first-time home purchase","order_by":null,"url":"\/36-174\/"},{"id":82538,"section_number":"58.1-302","catch_line":"Definitions","order_by":null,"url":"\/58.1-302\/"},{"id":59088,"section_number":"58.1-339.8","catch_line":"Income tax credit for low-income taxpayers","order_by":null,"url":"\/58.1-339.8\/"},{"id":69759,"section_number":"58.1-362","catch_line":"Virginia taxable income of a nonresident estate or trust","order_by":null,"url":"\/58.1-362\/"},{"id":57467,"section_number":"58.1-363","catch_line":"Share of a nonresident estate, trust, or beneficiary in income from Virginia sources","order_by":null,"url":"\/58.1-363\/"},{"id":62953,"section_number":"58.1-391","catch_line":"Virginia taxable income of owners of a pass-through entity","order_by":null,"url":"\/58.1-391\/"},{"id":58457,"section_number":"58.1-490","catch_line":"Declarations of estimated tax","order_by":null,"url":"\/58.1-490\/"},{"id":63964,"section_number":"58.1-513","catch_line":"Limitations; transfer of credit; gain or loss from tax credit","order_by":null,"url":"\/58.1-513\/"}],"refers_to":[{"id":82511,"section_number":"2.2-115","catch_line":"Commonwealth's Development Opportunity Fund","order_by":null,"url":"\/2.2-115\/"},{"id":66160,"section_number":"23.1-700","catch_line":"Definitions","order_by":null,"url":"\/23.1-700\/"},{"id":78722,"section_number":"36-171","catch_line":"Definitions","order_by":null,"url":"\/36-171\/"},{"id":75675,"section_number":"36-174","catch_line":"Withdrawal of funds from account for purposes other than eligible costs for first-time home purchase","order_by":null,"url":"\/36-174\/"},{"id":59212,"section_number":"58.1-312","catch_line":"Limitations on assessment","order_by":null,"url":"\/58.1-312\/"},{"id":74654,"section_number":"58.1-322","catch_line":"Virginia taxable income of residents","order_by":null,"url":"\/58.1-322\/"},{"id":79461,"section_number":"58.1-322.03","catch_line":"Virginia taxable income; deductions","order_by":null,"url":"\/58.1-322.03\/"},{"id":54425,"section_number":"58.1-3230","catch_line":"Special classifications of real estate established and defined","order_by":null,"url":"\/58.1-3230\/"},{"id":62148,"section_number":"58.1-339.4","catch_line":"Qualified equity and subordinated debt investments tax credit","order_by":null,"url":"\/58.1-339.4\/"},{"id":78034,"section_number":"8.01-195.10","catch_line":"Purpose; action by the General Assembly required; definitions","order_by":null,"url":"\/8.01-195.10\/"},{"id":55095,"section_number":"8.01-227.8","catch_line":"Definitions","order_by":null,"url":"\/8.01-227.8\/"}],"permalink":{"id":253989,"object_type":"law","relational_id":81784,"identifier":"58.1-322.02","token":"58.1\/I\/3\/2\/58.1-322.02","url":"\/58.1-322.02\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-322.02\/","token":"58.1\/I\/3\/2\/58.1-322.02","dublin_core":{"Title":"Virginia taxable income; subtractions","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-322.02","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

In computing Virginia taxable income pursuant to \u00a7 58.1-322<\/a>, to the extent included in federal adjusted gross income, there shall be subtracted:<\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Income derived from obligations, or on the sale or exchange of obligations, of the United States and on obligations or securities of any authority, commission, or instrumentality of the United States to the extent exempt from state income taxes under the laws<\/span> of the United States, including, but not limited to, stocks, bonds<\/span>, treasury bills, and treasury notes but not including interest on refunds of federal taxes, interest on equipment purchase contracts<\/span>, or interest on other normal business transactions. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Income derived from obligations, or on the sale or exchange of obligations, of the Commonwealth or of any political subdivision or instrumentality of the Commonwealth. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Benefits received under Title II of the Social Security Act and other benefits subject to federal income taxation solely pursuant to § 86 of the Internal Revenue Code. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Up to $20,000 of disability income, as defined in § 22(c)(2)(B)(iii) of the Internal Revenue Code; however, any person who claims a deduction under subdivision 5 of § 58.1-322.03<\/a> may not also claim a subtraction under this subdivision. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> The amount of any refund or credit for overpayment of income taxes imposed by the Commonwealth or any other taxing jurisdiction<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> The amount of wages or salaries eligible for the federal Work Opportunity Credit which was not deducted for federal purposes on account of the provisions of § 280C(a) of the Internal Revenue Code. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> Any amount included therein less than $600 from a prize awarded by the Virginia Lottery. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> The wages or salaries received by any person for active and inactive service in the National Guard of the Commonwealth of Virginia, (i) for taxable years beginning before January 1, 2023, not to exceed the amount of income derived from 39 calendar days of such service or $3,000, whichever amount is less; however, only those persons in the ranks of O3 and below shall be entitled to the subtractions specified in this clause, and (ii) for taxable years beginning on or after January 1, 2023, not to exceed the amount of income derived from 39 calendar days of such service or $5,500, whichever amount is less; however, only those persons in the ranks of O6 and below shall be entitled to the subtractions specified in this clause. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

9.<\/span> Amounts received by an individual<\/span>, not to exceed $1,000 for taxable years beginning on or before December 31, 2019, and $5,000 for taxable years beginning on or after January 1, 2020, as a reward for information provided to a law<\/span>-enforcement official or agency, or to a nonprofit corporation<\/span> created exclusively to assist such law<\/span>-enforcement official or agency, in the apprehension and conviction<\/span> of perpetrators of crimes<\/span>. This subdivision shall not apply to the following: an individual<\/span> who is an employee of, or under contract<\/span> with, a law<\/span>-enforcement agency, a victim or the perpetrator of the crime<\/span> for which the reward was paid, or any person who is compensated for the investigation of crimes<\/span> or accidents. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

10.<\/span> The amount of “qualified research expenses” or “basic research expenses” eligible for deduction for federal purposes, but which were not deducted, on account of the provisions of § 280C(c) of the Internal Revenue Code and which shall be available to partners, shareholders of S corporations<\/span>, and members of limited liability companies to the extent and in the same manner as other deductions may pass through to such partners, shareholders, and members. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

11.<\/span> Any income received during the taxable year derived from a qualified pension, profit-sharing, or stock bonus plan as described by § 401 of the Internal Revenue Code, an individual<\/span> retirement account or annuity established under § 408 of the Internal Revenue Code, a deferred compensation<\/span> plan as defined by § 457 of the Internal Revenue Code, or any federal government retirement program, the contributions to which were deductible from the taxpayer<\/span>’s federal adjusted gross income, but only to the extent the contributions to such plan or program were subject to taxation under the income tax in another state. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

12.<\/span> Any income attributable to a distribution of benefits or a refund from a prepaid tuition contract<\/span> or savings trust<\/span> account with the Commonwealth Savers Plan, created pursuant to Chapter 7 (§ 23.1-700<\/a> et seq.) of Title 23.1. The subtraction for any income attributable to a refund shall be limited to income attributable to a refund in the event of a beneficiary’s death, disability, or receipt of a scholarship. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

13.<\/span> All military pay and allowances, to the extent included in federal adjusted gross income and not otherwise subtracted, deducted, or exempted under this section, earned by military personnel while serving by order<\/span> of the President of the United States with the consent of Congress in a combat zone or qualified hazardous duty area that is treated as a combat zone for federal tax purposes pursuant to § 112 of the Internal Revenue Code. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

14.<\/span> For taxable years beginning before January 1, 2015, the gain derived from the sale or exchange of real property or the sale or exchange of an easement to real property which results in the real property or the easement thereto being devoted to open-space use, as that term is defined in § 58.1-3230<\/a>, for a period of time not less than 30 years. To the extent that a subtraction is taken in accordance with this subdivision, no tax credit under this chapter for donating land for its preservation shall be allowed for three years following the year in which the subtraction is taken. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

15.<\/span> Fifteen thousand dollars of military basic pay for military service personnel on extended active duty for periods in excess of 90 days; however, the subtraction amount shall be reduced dollar-for-dollar by the amount by which the taxpayer<\/span>’s military basic pay exceeds $15,000 and shall be reduced to zero if such military basic pay amount is equal to or exceeds $30,000. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

16.<\/span> The first $15,000 of salary for each federal and state employee whose total annual salary from all employment for the taxable year is $15,000 or less. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

17.<\/span> Unemployment benefits taxable pursuant to § 85 of the Internal Revenue Code. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

18.<\/span> a. Any amount received as military retirement income by an individual<\/span> awarded the Congressional Medal of Honor.\n\t\t\tb. For taxable years beginning on and after January 1, 2022, but before January 1, 2023, up to $10,000 of military benefits<\/span>; and for taxable years beginning on and after January 1, 2023, but before January 1, 2024, up to $20,000 of military benefits<\/span>.\n\t\t\tc. For taxable years beginning on and after January 1, 2024, but before January 1, 2025, up to $30,000 of military benefits<\/span>; and for taxable years beginning on and after January 1, 2025, up to $40,000 of military benefits<\/span>.\n\t\t\td. For purposes of subdivisions b and c, “military benefits<\/span>” means any (i) military retirement income received for service in the Armed Forces of the United States, (ii) qualified military benefits<\/span> received pursuant to § 134 of the Internal Revenue Code, (iii) benefits paid to the surviving spouse of a veteran of the Armed Forces of the United States under the Survivor Benefit Plan program established by the U.S. Department<\/span> of Defense, and (iv) military benefits<\/span> paid to the surviving spouse of a veteran of the Armed Forces of the United States. The subtraction allowed by subdivision b shall be allowed only for military benefits<\/span> received by an individual<\/span> age 55 or older. The subtraction allowed by subdivision c shall be allowed for military benefits<\/span> received by an individual<\/span> of any age. No subtraction shall be allowed pursuant to subdivisions b and c if a credit, exemption, subtraction, or deduction is claimed for the same income pursuant to subdivision a or any other provision of Virginia or federal law<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

19.<\/span> Items of income attributable to, derived from, or in any way related to (i) assets<\/span> stolen from, hidden from, or otherwise lost by an individual<\/span> who was a victim or target of Nazi persecution<\/span> or (ii) damages<\/span>, reparations, or other consideration received by a victim or target of Nazi persecution<\/span> to compensate such individual<\/span> for performing labor against his will under the threat of death, during World War II and its prelude and direct aftermath. This subtraction shall not apply to assets<\/span> acquired with such items of income or with the proceeds from the sale of assets<\/span> stolen from, hidden from, or otherwise lost to, during World War II and its prelude and direct aftermath, a victim or target of Nazi persecution<\/span>. The provisions of this subdivision shall only apply to an individual<\/span> who was the first recipient of such items of income and who was a victim or target of Nazi persecution<\/span>, or a spouse, surviving spouse, or child or stepchild of such victim.\n\t\t\tAs used in this subdivision:\n\t\t\t“Nazi regime<\/span>” means the country of Nazi Germany, areas occupied by Nazi Germany, those European countries allied with Nazi Germany, or any other neutral European country or area in Europe under the influence or threat of Nazi invasion.\n\t\t\t“Victim or target of Nazi persecution<\/span>” means any individual<\/span> persecuted or targeted for persecution by the Nazi regime<\/span> who had assets<\/span> stolen from, hidden from, or otherwise lost as a result of any act or omission in any way relating to (i) the Holocaust, (ii) World War II and its prelude and direct aftermath, (iii) transactions with or actions of the Nazi regime<\/span>, (iv) treatment of refugees fleeing Nazi persecution, or (v) the holding of such assets<\/span> by entities or persons in the Swiss Confederation during World War II and its prelude and aftermath. A “victim or target of Nazi persecution<\/span>” also includes any individual<\/span> forced into labor against his will, under the threat of death, during World War II and its prelude and direct aftermath. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

20.<\/span> The military death gratuity payment made after September 11, 2001, to the survivor of deceased military personnel killed in the line of duty, pursuant to 10 U.S.C. Chapter 75; however, the subtraction amount shall be reduced dollar-for-dollar by the amount that the survivor may exclude from his federal gross income in accordance with § 134 of the Internal Revenue Code. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

21.<\/span> The death benefit payments from an annuity contract<\/span> that are received by a beneficiary of such contract<\/span>, provided that (i) the death benefit payment is made pursuant to an annuity contract<\/span> with an insurance company and (ii) the death benefit payment is paid solely by lump sum. The subtraction under this subdivision shall be allowed only for that portion of the death benefit payment that is included in federal adjusted gross income. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

22.<\/span> Any gain recognized from the sale of launch services to space flight participants, as defined in 49 U.S.C. § 70102, or launch services intended to provide individuals<\/span> with the training or experience of a launch, without performing an actual launch. To qualify for a deduction under this subdivision, launch services must be performed in Virginia or originate from an airport or spaceport in Virginia. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

23.<\/span> Any gain recognized as a result of resupply services contracts<\/span> for delivering payload, as defined in 49 U.S.C. § 70102, entered into with the Commercial Orbital Transportation Services division of the National Aeronautics and Space Administration or other space flight entity, as defined in § 8.01-227.8<\/a>, and launched from an airport or spaceport in Virginia. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

24.<\/span> Any income taxed as a long-term capital gain for federal income tax purposes, or any income taxed as investment services partnership interest income (otherwise known as investment partnership carried interest income) for federal income tax purposes. To qualify for a subtraction under this subdivision, such income shall be attributable to an investment in a “qualified business,” as defined in § 58.1-339.4<\/a>, or in any other technology business approved by the Secretary of Administration, provided that the business has its principal office or facility in the Commonwealth and less than $3 million in annual revenues in the fiscal year prior to the investment. To qualify for a subtraction under this subdivision, the investment shall be made between the dates of April 1, 2010, and June 30, 2020. No taxpayer<\/span> who has claimed a tax credit for an investment in a “qualified business” under § 58.1-339.4<\/a> shall be eligible for the subtraction under this subdivision for an investment in the same business. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

25.<\/span> For taxable years beginning on and after January 1, 2014, any income of an account holder for the taxable year taxed as (i) a capital gain for federal income tax purposes attributable to such person’s first-time home buyer savings account established pursuant to Chapter 12 (§ 36-171<\/a> et seq.) of Title 36 and (ii) interest income or other income for federal income tax purposes attributable to such person’s first-time home buyer savings account.\n\t\t\tNotwithstanding the statute of limitations<\/span> on assessments contained in § 58.1-312<\/a>, any subtraction taken under this subdivision shall be subject to recapture in the taxable year or years in which moneys or funds withdrawn from the first-time home buyer savings account were used for any purpose other than the payment of eligible costs by or on behalf of a qualified beneficiary<\/span>, as provided under § 36-174<\/a>. The amount subject to recapture shall be a portion of the amount withdrawn in the taxable year that was used for other than the payment of eligible costs, computed by multiplying the amount withdrawn and used for other than the payment of eligible costs by the ratio of the aggregate earnings in the account at the time of the withdrawal to the total balance in the account at such time.\n\t\t\tHowever, recapture shall not apply to the extent of moneys or funds withdrawn that were (i) withdrawn by reason of the qualified beneficiary<\/span>’s death or disability; (ii) a disbursement of assets<\/span> of the account pursuant to a filing for protection under the United States Bankruptcy Code<\/span>, 11 U.S.C. §§ 101 through 1330; or (iii) transferred from an account established pursuant to Chapter 12 (§ 36-171<\/a> et seq.) of Title 36 into another account established pursuant to such chapter for the benefit of another qualified beneficiary<\/span>.\n\t\t\tFor purposes of this subdivision, “account holder,” “eligible costs,” “first-time home buyer savings account,” and “qualified beneficiary<\/span>” mean the same as those terms are defined in § 36-171<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

26.<\/span> For taxable years beginning on and after January 1, 2015, any income for the taxable year attributable to the discharge of a student loan<\/span> solely by reason of the student’s death. For purposes of this subdivision, “student loan<\/span>” means the same as that term is defined under § 108(f) of the Internal Revenue Code. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

27.<\/span> a. Income, including investment services partnership interest income (otherwise known as investment partnership carried interest income), attributable to an investment in a Virginia venture capital account<\/span>. To qualify for a subtraction under this subdivision, the investment shall be made on or after January 1, 2018, but before December 31, 2023. No subtraction shall be allowed under this subdivision for an investment in a company that is owned or operated by a family member or an affiliate of the taxpayer<\/span>. No subtraction shall be allowed under this subdivision for a taxpayer<\/span> who has claimed a subtraction under subdivision 24 or a tax credit under § 58.1-339.4<\/a> for the same investment.\n\t\t\tb. As used in this subdivision 27:\n\t\t\t“Qualified portfolio company<\/span>” means a company that (i) has its principal place of business in the Commonwealth; (ii) has a primary purpose of production, sale, research, or development of a product or service other than the management or investment of capital; and (iii) provides equity<\/span> in the company to the Virginia venture capital account<\/span> in exchange for a capital investment. “Qualified portfolio company<\/span>” does not include a company that is an individual<\/span> or sole proprietorship.\n\t\t\t“Virginia venture capital account<\/span>” means an investment fund that has been certified by the Department<\/span> as a Virginia venture capital account<\/span>. In order<\/span> to be certified as a Virginia venture capital account<\/span>, the operator of the investment fund shall register the investment fund with the Department<\/span> prior to December 31, 2023, (i) indicating that it intends to invest at least 50 percent of the capital committed to its fund in qualified portfolio companies and (ii) providing documentation that it employs at least one investor who has at least four years of professional experience in venture capital investment or substantially equivalent experience<\/span>. “Substantially equivalent experience<\/span>” includes, but is not limited to, an undergraduate degree from an accredited college or university in economics, finance, or a similar field of study. The Department<\/span> may require an investment fund to provide documentation of the investor’s training, education, or experience as deemed necessary by the Department<\/span> to determine substantial equivalency. If the Department<\/span> determines that the investment fund employs at least one investor with the experience set forth herein, the Department<\/span> shall certify the investment fund as a Virginia venture capital account<\/span> at such time as the investment fund actually invests at least 50 percent of the capital committed to its fund in qualified portfolio companies. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

28.<\/span> a. Income attributable to an investment in a Virginia real estate investment trust<\/span>. To qualify for a subtraction under this subdivision, the investment shall be made on or after January 1, 2019, but before December 31, 2024. No subtraction shall be allowed for an investment in a trust that is managed by a family member or an affiliate of the taxpayer<\/span>. No subtraction shall be allowed under this subdivision for a taxpayer<\/span> who has claimed a subtraction under subdivision 24 or 27 or a tax credit under § 58.1-339.4<\/a> for the same investment.\n\t\t\tb. As used in this subdivision 28:\n\t\t\t“Distressed” means satisfying the criteria applicable to a locality described in subdivision E 2 of § 2.2-115<\/a>.\n\t\t\t“Double distressed<\/span>” means satisfying the criteria applicable to a locality described in subdivision E 3 of § 2.2-115<\/a>.\n\t\t\t“Virginia real estate investment trust<\/span>” means a real estate investment trust, as defined in 26 U.S.C. § 856, that has been certified by the Department<\/span> as a Virginia real estate investment trust<\/span>. In order<\/span> to be certified as a Virginia real estate investment trust<\/span>, the trustee shall register the trust with the Department<\/span> prior to December 31, 2024, indicating that it intends to invest at least 90 percent of trust funds in Virginia and at least 40 percent of trust funds in real estate in localities that are distressed or double distressed<\/span>. If the Department<\/span> determines that the trust satisfies the preceding criteria, the Department<\/span> shall certify the trust as a Virginia real estate investment trust<\/span> at such time as the trust actually invests at least 90 percent of trust funds in Virginia and at least 40 percent of trust funds in real estate in localities that are distressed or double distressed<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

29.<\/span> For taxable years beginning on and after January 1, 2019, any gain recognized from the taking of real property by condemnation proceedings. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

30.<\/span> For taxable years beginning before January 1, 2021, up to $100,000 of all grant funds received by the taxpayer<\/span> under the Rebuild Virginia program established by the Governor and administered by the Department<\/span> of Small Business and Supplier Diversity. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

31.<\/span> For taxable years beginning on and after January 1, 2022, any compensation<\/span> for wrongful incarceration awarded pursuant to the procedures established under Article 18.2 (§ 8.01-195.10<\/a> et seq.) of Chapter 3 of Title 8.01. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nVIRGINIA TAXABLE INCOME; SUBTRACTIONS (\u00a7 58.1-322.02)\n\nIn computing Virginia taxable income pursuant to \u00a7 58.1-322, to the extent\nincluded in federal adjusted gross income, there shall be subtracted:\n\n1. Income derived from obligations, or on the sale or exchange of obligations,\nof the United States and on obligations or securities of any authority,\ncommission, or instrumentality of the United States to the extent exempt from\nstate income taxes under the laws of the United States, including, but not\nlimited to, stocks, bonds, treasury bills, and treasury notes but not including\ninterest on refunds of federal taxes, interest on equipment purchase contracts,\nor interest on other normal business transactions.\n\n2. Income derived from obligations, or on the sale or exchange of obligations,\nof the Commonwealth or of any political subdivision or instrumentality of the\nCommonwealth.\n\n3. Benefits received under Title II of the Social Security Act and other\nbenefits subject to federal income taxation solely pursuant to § 86 of the\nInternal Revenue Code.\n\n4. Up to $20,000 of disability income, as defined in § 22(c)(2)(B)(iii) of\nthe Internal Revenue Code; however, any person who claims a deduction under\nsubdivision 5 of § 58.1-322.03 may not also claim a subtraction under this\nsubdivision.\n\n5. The amount of any refund or credit for overpayment of income taxes imposed by\nthe Commonwealth or any other taxing jurisdiction.\n\n6. The amount of wages or salaries eligible for the federal Work Opportunity\nCredit which was not deducted for federal purposes on account of the provisions\nof § 280C(a) of the Internal Revenue Code.\n\n7. Any amount included therein less than $600 from a prize awarded by the\nVirginia Lottery.\n\n8. The wages or salaries received by any person for active and inactive service\nin the National Guard of the Commonwealth of Virginia, (i) for taxable years\nbeginning before January 1, 2023, not to exceed the amount of income derived\nfrom 39 calendar days of such service or $3,000, whichever amount is less;\nhowever, only those persons in the ranks of O3 and below shall be entitled to\nthe subtractions specified in this clause, and (ii) for taxable years beginning\non or after January 1, 2023, not to exceed the amount of income derived from 39\ncalendar days of such service or $5,500, whichever amount is less; however, only\nthose persons in the ranks of O6 and below shall be entitled to the subtractions\nspecified in this clause.\n\n9. Amounts received by an individual, not to exceed $1,000 for taxable years\nbeginning on or before December 31, 2019, and $5,000 for taxable years beginning\non or after January 1, 2020, as a reward for information provided to a\nlaw-enforcement official or agency, or to a nonprofit corporation created\nexclusively to assist such law-enforcement official or agency, in the\napprehension and conviction of perpetrators of crimes. This subdivision shall\nnot apply to the following: an individual who is an employee of, or under\ncontract with, a law-enforcement agency, a victim or the perpetrator of the\ncrime for which the reward was paid, or any person who is compensated for the\ninvestigation of crimes or accidents.\n\n10. The amount of “qualified research expenses” or “basic\nresearch expenses” eligible for deduction for federal purposes, but which\nwere not deducted, on account of the provisions of § 280C(c) of the\nInternal Revenue Code and which shall be available to partners, shareholders of\nS corporations, and members of limited liability companies to the extent and in\nthe same manner as other deductions may pass through to such partners,\nshareholders, and members.\n\n11. Any income received during the taxable year derived from a qualified\npension, profit-sharing, or stock bonus plan as described by § 401 of the\nInternal Revenue Code, an individual retirement account or annuity established\nunder § 408 of the Internal Revenue Code, a deferred compensation plan as\ndefined by § 457 of the Internal Revenue Code, or any federal government\nretirement program, the contributions to which were deductible from the\ntaxpayer’s federal adjusted gross income, but only to the extent the\ncontributions to such plan or program were subject to taxation under the income\ntax in another state.\n\n12. Any income attributable to a distribution of benefits or a refund from a\nprepaid tuition contract or savings trust account with the Commonwealth Savers\nPlan, created pursuant to Chapter 7 (§ 23.1-700 et seq.) of Title 23.1. The\nsubtraction for any income attributable to a refund shall be limited to income\nattributable to a refund in the event of a beneficiary’s death,\ndisability, or receipt of a scholarship.\n\n13. All military pay and allowances, to the extent included in federal adjusted\ngross income and not otherwise subtracted, deducted, or exempted under this\nsection, earned by military personnel while serving by order of the President of\nthe United States with the consent of Congress in a combat zone or qualified\nhazardous duty area that is treated as a combat zone for federal tax purposes\npursuant to § 112 of the Internal Revenue Code.\n\n14. For taxable years beginning before January 1, 2015, the gain derived from\nthe sale or exchange of real property or the sale or exchange of an easement to\nreal property which results in the real property or the easement thereto being\ndevoted to open-space use, as that term is defined in § 58.1-3230, for a\nperiod of time not less than 30 years. To the extent that a subtraction is taken\nin accordance with this subdivision, no tax credit under this chapter for\ndonating land for its preservation shall be allowed for three years following\nthe year in which the subtraction is taken.\n\n15. Fifteen thousand dollars of military basic pay for military service\npersonnel on extended active duty for periods in excess of 90 days; however, the\nsubtraction amount shall be reduced dollar-for-dollar by the amount by which the\ntaxpayer’s military basic pay exceeds $15,000 and shall be reduced to zero\nif such military basic pay amount is equal to or exceeds $30,000.\n\n16. The first $15,000 of salary for each federal and state employee whose total\nannual salary from all employment for the taxable year is $15,000 or less.\n\n17. Unemployment benefits taxable pursuant to § 85 of the Internal Revenue\nCode.\n\n18. a. Any amount received as military retirement income by an individual\nawarded the Congressional Medal of Honor.\n\t\t\tb. For taxable years beginning on and after January 1, 2022, but before\nJanuary 1, 2023, up to $10,000 of military benefits; and for taxable years\nbeginning on and after January 1, 2023, but before January 1, 2024, up to\n$20,000 of military benefits.\n\t\t\tc. For taxable years beginning on and after January 1, 2024, but before\nJanuary 1, 2025, up to $30,000 of military benefits; and for taxable years\nbeginning on and after January 1, 2025, up to $40,000 of military benefits.\n\t\t\td. For purposes of subdivisions b and c, “military benefits”\nmeans any (i) military retirement income received for service in the Armed\nForces of the United States, (ii) qualified military benefits received pursuant\nto § 134 of the Internal Revenue Code, (iii) benefits paid to the surviving\nspouse of a veteran of the Armed Forces of the United States under the Survivor\nBenefit Plan program established by the U.S. Department of Defense, and (iv)\nmilitary benefits paid to the surviving spouse of a veteran of the Armed Forces\nof the United States. The subtraction allowed by subdivision b shall be allowed\nonly for military benefits received by an individual age 55 or older. The\nsubtraction allowed by subdivision c shall be allowed for military benefits\nreceived by an individual of any age. No subtraction shall be allowed pursuant\nto subdivisions b and c if a credit, exemption, subtraction, or deduction is\nclaimed for the same income pursuant to subdivision a or any other provision of\nVirginia or federal law.\n\n19. Items of income attributable to, derived from, or in any way related to (i)\nassets stolen from, hidden from, or otherwise lost by an individual who was a\nvictim or target of Nazi persecution or (ii) damages, reparations, or other\nconsideration received by a victim or target of Nazi persecution to compensate\nsuch individual for performing labor against his will under the threat of death,\nduring World War II and its prelude and direct aftermath. This subtraction shall\nnot apply to assets acquired with such items of income or with the proceeds from\nthe sale of assets stolen from, hidden from, or otherwise lost to, during World\nWar II and its prelude and direct aftermath, a victim or target of Nazi\npersecution. The provisions of this subdivision shall only apply to an\nindividual who was the first recipient of such items of income and who was a\nvictim or target of Nazi persecution, or a spouse, surviving spouse, or child or\nstepchild of such victim.\n\t\t\tAs used in this subdivision:\n\t\t\t“Nazi regime” means the country of Nazi Germany, areas occupied\nby Nazi Germany, those European countries allied with Nazi Germany, or any other\nneutral European country or area in Europe under the influence or threat of Nazi\ninvasion.\n\t\t\t“Victim or target of Nazi persecution” means any individual\npersecuted or targeted for persecution by the Nazi regime who had assets stolen\nfrom, hidden from, or otherwise lost as a result of any act or omission in any\nway relating to (i) the Holocaust, (ii) World War II and its prelude and direct\naftermath, (iii) transactions with or actions of the Nazi regime, (iv) treatment\nof refugees fleeing Nazi persecution, or (v) the holding of such assets by\nentities or persons in the Swiss Confederation during World War II and its\nprelude and aftermath. A “victim or target of Nazi persecution” also\nincludes any individual forced into labor against his will, under the threat of\ndeath, during World War II and its prelude and direct aftermath.\n\n20. The military death gratuity payment made after September 11, 2001, to the\nsurvivor of deceased military personnel killed in the line of duty, pursuant to\n10 U.S.C. Chapter 75; however, the subtraction amount shall be reduced\ndollar-for-dollar by the amount that the survivor may exclude from his federal\ngross income in accordance with § 134 of the Internal Revenue Code.\n\n21. The death benefit payments from an annuity contract that are received by a\nbeneficiary of such contract, provided that (i) the death benefit payment is\nmade pursuant to an annuity contract with an insurance company and (ii) the\ndeath benefit payment is paid solely by lump sum. The subtraction under this\nsubdivision shall be allowed only for that portion of the death benefit payment\nthat is included in federal adjusted gross income.\n\n22. Any gain recognized from the sale of launch services to space flight\nparticipants, as defined in 49 U.S.C. § 70102, or launch services intended\nto provide individuals with the training or experience of a launch, without\nperforming an actual launch. To qualify for a deduction under this subdivision,\nlaunch services must be performed in Virginia or originate from an airport or\nspaceport in Virginia.\n\n23. Any gain recognized as a result of resupply services contracts for\ndelivering payload, as defined in 49 U.S.C. § 70102, entered into with the\nCommercial Orbital Transportation Services division of the National Aeronautics\nand Space Administration or other space flight entity, as defined in §\n8.01-227.8, and launched from an airport or spaceport in Virginia.\n\n24. Any income taxed as a long-term capital gain for federal income tax\npurposes, or any income taxed as investment services partnership interest income\n(otherwise known as investment partnership carried interest income) for federal\nincome tax purposes. To qualify for a subtraction under this subdivision, such\nincome shall be attributable to an investment in a “qualified\nbusiness,” as defined in § 58.1-339.4, or in any other technology\nbusiness approved by the Secretary of Administration, provided that the business\nhas its principal office or facility in the Commonwealth and less than $3\nmillion in annual revenues in the fiscal year prior to the investment. To\nqualify for a subtraction under this subdivision, the investment shall be made\nbetween the dates of April 1, 2010, and June 30, 2020. No taxpayer who has\nclaimed a tax credit for an investment in a “qualified business”\nunder § 58.1-339.4 shall be eligible for the subtraction under this\nsubdivision for an investment in the same business.\n\n25. For taxable years beginning on and after January 1, 2014, any income of an\naccount holder for the taxable year taxed as (i) a capital gain for federal\nincome tax purposes attributable to such person’s first-time home buyer\nsavings account established pursuant to Chapter 12 (§ 36-171 et seq.) of\nTitle 36 and (ii) interest income or other income for federal income tax\npurposes attributable to such person’s first-time home buyer savings\naccount.\n\t\t\tNotwithstanding the statute of limitations on assessments contained in §\n58.1-312, any subtraction taken under this subdivision shall be subject to\nrecapture in the taxable year or years in which moneys or funds withdrawn from\nthe first-time home buyer savings account were used for any purpose other than\nthe payment of eligible costs by or on behalf of a qualified beneficiary, as\nprovided under § 36-174. The amount subject to recapture shall be a portion\nof the amount withdrawn in the taxable year that was used for other than the\npayment of eligible costs, computed by multiplying the amount withdrawn and used\nfor other than the payment of eligible costs by the ratio of the aggregate\nearnings in the account at the time of the withdrawal to the total balance in\nthe account at such time.\n\t\t\tHowever, recapture shall not apply to the extent of moneys or funds withdrawn\nthat were (i) withdrawn by reason of the qualified beneficiary’s death or\ndisability; (ii) a disbursement of assets of the account pursuant to a filing\nfor protection under the United States Bankruptcy Code, 11 U.S.C. §§\n101 through 1330; or (iii) transferred from an account established pursuant to\nChapter 12 (§ 36-171 et seq.) of Title 36 into another account established\npursuant to such chapter for the benefit of another qualified beneficiary.\n\t\t\tFor purposes of this subdivision, “account holder,”\n“eligible costs,” “first-time home buyer savings\naccount,” and “qualified beneficiary” mean the same as those\nterms are defined in § 36-171.\n\n26. For taxable years beginning on and after January 1, 2015, any income for the\ntaxable year attributable to the discharge of a student loan solely by reason of\nthe student’s death. For purposes of this subdivision, “student\nloan” means the same as that term is defined under § 108(f) of the\nInternal Revenue Code.\n\n27. a. Income, including investment services partnership interest income\n(otherwise known as investment partnership carried interest income),\nattributable to an investment in a Virginia venture capital account. To qualify\nfor a subtraction under this subdivision, the investment shall be made on or\nafter January 1, 2018, but before December 31, 2023. No subtraction shall be\nallowed under this subdivision for an investment in a company that is owned or\noperated by a family member or an affiliate of the taxpayer. No subtraction\nshall be allowed under this subdivision for a taxpayer who has claimed a\nsubtraction under subdivision 24 or a tax credit under § 58.1-339.4 for the\nsame investment.\n\t\t\tb. As used in this subdivision 27:\n\t\t\t“Qualified portfolio company” means a company that (i) has its\nprincipal place of business in the Commonwealth; (ii) has a primary purpose of\nproduction, sale, research, or development of a product or service other than\nthe management or investment of capital; and (iii) provides equity in the\ncompany to the Virginia venture capital account in exchange for a capital\ninvestment. “Qualified portfolio company” does not include a company\nthat is an individual or sole proprietorship.\n\t\t\t“Virginia venture capital account” means an investment fund that\nhas been certified by the Department as a Virginia venture capital account. In\norder to be certified as a Virginia venture capital account, the operator of the\ninvestment fund shall register the investment fund with the Department prior to\nDecember 31, 2023, (i) indicating that it intends to invest at least 50 percent\nof the capital committed to its fund in qualified portfolio companies and (ii)\nproviding documentation that it employs at least one investor who has at least\nfour years of professional experience in venture capital investment or\nsubstantially equivalent experience. “Substantially equivalent\nexperience” includes, but is not limited to, an undergraduate degree from\nan accredited college or university in economics, finance, or a similar field of\nstudy. The Department may require an investment fund to provide documentation of\nthe investor’s training, education, or experience as deemed necessary by\nthe Department to determine substantial equivalency. If the Department\ndetermines that the investment fund employs at least one investor with the\nexperience set forth herein, the Department shall certify the investment fund as\na Virginia venture capital account at such time as the investment fund actually\ninvests at least 50 percent of the capital committed to its fund in qualified\nportfolio companies.\n\n28. a. Income attributable to an investment in a Virginia real estate investment\ntrust. To qualify for a subtraction under this subdivision, the investment shall\nbe made on or after January 1, 2019, but before December 31, 2024. No\nsubtraction shall be allowed for an investment in a trust that is managed by a\nfamily member or an affiliate of the taxpayer. No subtraction shall be allowed\nunder this subdivision for a taxpayer who has claimed a subtraction under\nsubdivision 24 or 27 or a tax credit under § 58.1-339.4 for the same\ninvestment.\n\t\t\tb. As used in this subdivision 28:\n\t\t\t“Distressed” means satisfying the criteria applicable to a\nlocality described in subdivision E 2 of § 2.2-115.\n\t\t\t“Double distressed” means satisfying the criteria applicable to a\nlocality described in subdivision E 3 of § 2.2-115.\n\t\t\t“Virginia real estate investment trust” means a real estate\ninvestment trust, as defined in 26 U.S.C. § 856, that has been certified by\nthe Department as a Virginia real estate investment trust. In order to be\ncertified as a Virginia real estate investment trust, the trustee shall register\nthe trust with the Department prior to December 31, 2024, indicating that it\nintends to invest at least 90 percent of trust funds in Virginia and at least 40\npercent of trust funds in real estate in localities that are distressed or\ndouble distressed. If the Department determines that the trust satisfies the\npreceding criteria, the Department shall certify the trust as a Virginia real\nestate investment trust at such time as the trust actually invests at least 90\npercent of trust funds in Virginia and at least 40 percent of trust funds in\nreal estate in localities that are distressed or double distressed.\n\n29. For taxable years beginning on and after January 1, 2019, any gain\nrecognized from the taking of real property by condemnation proceedings.\n\n30. For taxable years beginning before January 1, 2021, up to $100,000 of all\ngrant funds received by the taxpayer under the Rebuild Virginia program\nestablished by the Governor and administered by the Department of Small Business\nand Supplier Diversity.\n\n31. For taxable years beginning on and after January 1, 2022, any compensation\nfor wrongful incarceration awarded pursuant to the procedures established under\nArticle 18.2 (§ 8.01-195.10 et seq.) of Chapter 3 of Title 8.01.\n\nHISTORY: 2017, cc. 444, 762; 2018, c. 821; 2019, c. 270; 2020, cc. 324, 375,\n738, 900; 2021, Sp. Sess. I, cc. 117, 118, 552; 2022, cc. 3, 19, 572, 573; 2022,\nSp. Sess. I, cc. 1, 2, 14, 15; 2023, cc. 584, 585; 2023, Sp. Sess. I, c. 1;\n2024, c. 217.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}