H.B. 1935, approved Monday by Democratic Gov. Ralph Northam, decouples the state from portions of the Coronavirus Aid, Relief, and Economic Security Act
relating to net operating loss limitation and carryback, according to the bill summary. The CARES Act suspended the 2017 Tax Cuts and Jobs Act's limit on net operating losses to 80% of taxable income.Virginia also decoupled from CARES Act provisions related to a loss limitation applicable to noncorporate taxpayers, the limitation on business interest, and certain loan forgiveness and other business financial assistance.
The measure provides an individual and corporate income tax deduction or subtraction of up to $100,000 for Rebuild Virginia grants and certain amounts related to Paycheck Protection Program loans, according to the bill summary.
The new law also decouples from federal provisions suspending the overall limit on itemized deductions and the reduction in the medical expense deduction floor for the 2017 tax year and tax years beginning on and after Jan. 1, 2019.
--Editing by Leah Bennett.
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