Virginia Earned Income Tax Credit

Eligibility and Requirements for the Virginia Earned Income Credit

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Virginia joins 25 other states and the District of Columbia in implementing a version of the federal earned income tax credit or EIC. Virginia calls its earned income credit the “credit for low income individuals." 

Most states' EITCs are based on a taxpayer's federal EITC and have the same or similar eligibility rules. Virginia sets its own rules. Although many states' EITCs are refundable -- you'll receive the difference in cash if your credit is more than the taxes you owe – this is not the case in Virginia.

The credit can only erase any taxes you owe. You can’t carry over any unused portion to future years.

Income Requirements for Virginia’s Earned Income Credit 

The total adjusted gross income for your entire family must be below federal poverty guidelines to qualify for Virginia’s low income credit. This includes you, your spouse and your dependents if they earn income, even if they do not have to file their own tax returns. Income requirements are based on the number of dependent exemptions you claim on your return, including your personal exemption:

  • 1 -- $11,770
  • 2 -- $15,930
  • 3 -- $20,090
  • 4 -- $24,250
  • 5 -- $28,410
  • 6 -- $32,570
  • 7 -- $36,730
  • 8 -- $40,890

Add $4,020 for each exemption over eight. 

Other Requirements for Virginia’s Low Income Credit

You cannot claim this credit if another taxpayer, such as your parent, claims you as a dependent on his tax return. If you’re married, only one spouse can claim the credit.

You cannot claim the credit if you, your spouse or any of your dependents claim certain other exemptions or deductions on your tax return, including: 

  • Deductions for wages or salaries received by members of the Virginia National Guard
  • Deductions for up to $15,000 of military basic pay for military service personnel on extended active duty
  • Deductions for up to $15,000 of salary for a federal or state employee whose annual salary is $15,000 or less
  • The additional personal exemption for blind or aged taxpayers 

The Virginia Department of Taxation suggests that you consult with a tax professional if you’re eligible for the extra exemption due to blindness or age. If you qualify for both the extra exemption and the low income credit, you might be better off claiming the low income credit. A tax professional can tell you for sure.  

How Much Is Virginia’s Earned Income Credit? 

Virginia’s low income credit is $300 for each personal and dependent exemption you claim on your Virginia tax return. Simply multiply the number of your exemptions by $300 to determine the amount of your credit. Use Virginia’s Schedule ADJ to report the credit and include it when you file your tax return.

NOTE: State tax laws can change frequently and the above information may not reflect the most recent changes. Income limits are current through 2015. Check the website of the Virginia Department of Taxation or with a tax professional for any increases in subsequent years. The information contained in this article is not intended as tax advice and it is not a substitute for legal advice.