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Governor Northam has signed SB 1146 and HB 1935 which conforms Virginia’s tax code to federal tax provisions from the taxable year 2020.  Because of the bill’s emergency clause, conformity goes into effect immediately and is retroactive.

Businesses can exclude the full forgiven loan amount as well as deduct up to $100,000 of business expenses related to the PPP or Rebuild Virginia Loan. The $100,000 cap will allow full deductibility for 80% of Virginia Small Businesses that received a PPP loan. Rebuild Virginia grants will receive the same tax treatment.

Here are the main components of the legislation:

• Excludes PPP loan forgiveness amount from income

• Provides up to $100,000 in deductions for business expenses paid with PPP money

• Provides same tax treatment for Rebuild Virginia grants

• Is now in effect and is retroactive to provide timely filing for individuals and businesses

   

  The Virginia Department of Taxation released Tax Bulletin 21-4 containing important information about Virginia income tax returns.

  https://www.tax.virginia.gov/sites/default/files/inline-files/tb-21-4-irc-conformity-advanced.pdf?utm_content=february_2019&utm_medium=email&utm_name=2019_secondq_interestrates&utm_source=govdelivery&utm_term=tax_preparer