Subtractions from Income
To the extent included in federal adjusted gross income, the following subtractions are allowed on the Virginia return. No amount previously excluded from FAGI can be claimed as a subtraction in computing Virginia taxable income. The same income may not be included in more than one subtraction.
Special instructions for members of the military Virginia law provides three subtractions for military servicemembers.
- military pay and allowances earned while serving in a combat zone or qualified hazardous duty area (Va. Code § 58.1-322 C 21);
- military basic pay for personnel on extended active duty for periods in excess of 90 consecutive days (Va. Code § 58.1-322 C 23); and
- wages or salaries received for active and inactive service in the National Guard of the Commonwealth (Va. Code § 58.1-322 C 11).
Servicemembers may be eligible for more than one subtraction, but the same income may not be included in more than one subtraction. For example, a servicemember may not deduct the same income for both the military basic pay subtraction and the National Guard subtraction.
Obligations of the U.S.
Enter the amount of any income (interest, dividends and gain) from obligations of the U.S. that are included in your federal adjusted gross income, but are exempt from Virginia state tax.
Enter the amount of disability income reported as wages (or payments in lieu of wages) on your federal return for permanent and total disability. On joint returns, each spouse can qualify for the deduction. Individuals can subtract up to $20,000 of disability income, as defined under IRC § 22(c)(2)(b)(iii).
If depreciation was included in the computation of your Federal Adjusted Gross Income and one or more of the depreciable assets received the special 30% or 50% bonus depreciation deduction for federal purposes in any taxable year from 2001 through 2014, then depreciation must be recomputed for Virginia Page 20 purposes as if such assets did not receive the special 30% or 50% bonus depreciation deduction for federal purposes in any taxable year from 2001 through 2014. If the total 2014 Virginia depreciation is more than 2014 federal depreciation, then the difference must be recognized as a subtraction.