HB2728: Child tax credit; imposition of tax, adjustments.

Legislative Summary

Imposition of tax; adjustments and child tax credit. Creates a refundable income tax credit for an individual or married persons filing a joint return whose family Virginia adjusted gross income does not exceed $100,000 for taxable years 2025 through 2029 for each dependent member of the taxpayer's household who is younger than the age of 18. The amount of the credit equals $250 for each such dependent, to be increased by $50 for each taxable year that the Department of Taxation certifies annual revenue growth for the prior year of at least five percent, adjusted for the impact of tax policy changes. Additionally, the bill sets the Virginia deduction in the amount of $930 for each personal exemption allowable to the taxpayer for federal income tax purposes to expire after taxable year 2024.The bill also removes the two percent and three percent tax brackets, while maintaining the current five percent tax to be imposed on income in excess of $5,000 but not in excess of $17,000 and reduces from 5.75 percent to 5.6 percent the tax to be imposed on incomes in excess of $17,000, beginning with taxable year 2025. Finally, the bill provides that the tax imposed on income in excess of $17,000 shall be reduced by one-tenth of a percent for each taxable year between 2025 and 2029 that the Department of Taxation certifies annual revenue growth of at least five percent, adjusted for the impact of tax policy changes.