Virginia moves to a fixed conformity date

HB 29, effective February 20, 2026, fixes conformity at December 31, 2025. Virginia does not follow the federal expensing for qualified production property, domestic research expenditures (including the retroactive and catch-up rules), or the higher section 179 limits. Bonus depreciation stays one of Virginia’s existing exceptions.

Virginia keeps the federal section 163(j) change, but its subtraction for disallowed business interest falls from 50% to 20% for 2025 and later. Virginia also keeps the Pease limitation on itemized deductions.

• The PTET election is now permanent; it had been set to expire January 1, 2027.
• The educator expense deduction of up to $500 returns from 2026.
• The standard deduction rises from $8,750 to $9,200 single and $18,400 joint from 2027.
• The earned income credit at 20% of the federal EITC runs through 2029.