Income tax, state; credit for surviving spouse's real property taxes.

Plain English Breakdown

The bill does not specify that the veteran's death must have occurred prior to January 1, 2011, but this is a condition for eligibility as stated in the official summary and text.

Credit for Surviving Spouses' Real Property Taxes

This bill creates a nonrefundable income tax credit for surviving spouses who paid real property taxes on their qualifying residence and meet certain eligibility criteria.

What This Bill Does

• Creates an income tax credit for surviving spouses of eligible veterans.
• Defines 'eligible veteran' as someone with a 100% service-connected disability from the U.S. Department of Veterans Affairs.
• Specifies that the surviving spouse must have paid real property taxes on their qualifying residence during the taxable year.
• Limits the total amount of credits to $5 million per year, allocated first-come, first-served.

Who It Names or Affects

• Surviving spouses of eligible veterans who meet certain criteria and pay real property taxes.
• The Department of Taxation which will allocate the tax credits.

Terms To Know

Eligible veteran

A veteran who had been determined by the U.S. Department of Veterans Affairs to have a 100 percent service-connected, permanent, and total disability.

Qualifying residence

Real property in which the taxpayer had an ownership interest for at least 30 days during the taxable year and served as their primary residence during that period.

Limits and Unknowns

• The total amount of credits is limited to $5 million per year.
• It is not clear how many surviving spouses will qualify or benefit from this credit.

Official Summary Text

Income tax; credit for surviving spouse's real property taxes.
Provides, for taxable years 2026 through 2030, a nonrefundable income tax credit in an amount equal to a surviving spouse's qualifying portion of real property taxes, defined in the bill, for any qualifying residence, also defined in the bill.

The bill defines "eligible veteran" as a veteran who had been determined by the U.S. Department of Veterans Affairs to have a 100 percent service-connected, permanent, and total disability. The bill defines "surviving spouse" as the surviving spouse (i) of an eligible veteran; (ii) that would have been eligible for a real property tax exemption but for the eligible veteran's death having occurred prior to January 1, 2011; and (iii) who paid real property taxes on a qualifying residence during the taxable year for which the credit is claimed. The aggregate amount of credits allowable under the provisions of the bill shall not exceed $5 million per taxable year and shall be allocated by the Department of Taxation on a first-come, first-served basis.

Current Bill Text

A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered
58.1-339.15
, relating to income tax; credit for surviving spouse's real property taxes.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered
58.1-339.15
as follows:

§
58.1-339.15
. Credit for
surviving spouse
's real property taxes
.

A. For purposes of this section:

"Eligible veteran" means a veteran who had been determined by the U.S. Department of Veterans Affairs to have a 100 percent service-connected, permanent, and total disability.

"Qualifying portion of real property taxes" means the total amount of real property taxes levied and paid, if due, for the most recent assessment of
a
surviving spouse's
qualifying residence
.

"
Qualifying
residence" means any real property (i) in which a
taxpayer
had an ownership interest
for at least 30 days of the taxable year for which a credit is claimed pursuant to this section and (ii)
that served as such taxpayer's primary residence
during the entirety of such ownership interest.

"Surviving spouse" means
the
surviving spouse

(i)
of an eligib
le veteran
;
(ii)
that
would have been
eligible for the exemption
provided in Article 2.3 (§
58.1-3219.5
et seq.) of Chapter 32 of Title 58.1
but for the death of
such
eligible
veteran occurring prior to
January 1, 2011
;
and (iii) who paid real property taxes on a
qualifying residence during the taxable year for which a credit is claimed pursuant to this section
.

B. For taxable years b
eginning on and after January 1, 2026, but before January 1, 2031, a
surviving spouse
shall be allowed to claim a nonrefundable credit against the tax
levied pursuant to §
58.1-320
in an amount equal to such taxpayer's qualifying portion of real property taxes
for any qualifying res
idence
.

C.
The amount of the credit that may be claimed in any single taxable year shall not exceed the taxpayer's liability for taxes imposed by this chapter for that taxable year.
If the amount of the credit
allowed under this section
exceeds the taxpayer's tax liability for the taxable year, the excess may be carried over for credit against the income taxes of the taxpayer in the next five taxable years, or until the total credit amount has been taken, whichever is sooner.
The aggregate amount of credits
allowable under
this section shall not exceed $5 million
per taxable year
.
Credits shall be allocated by the Department o
n
a first-come,
first-served basis.

D. The Tax Commissioner shall develop guidelines for claiming the credit
provided by this section. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§
2.2-4000
et seq.).