SB268 • 2026

Income tax, state; creates child tax credit.

<p class=ldtitle>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 individual income tax; child tax credit.</p>

Children Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Craig
Last action: 2026-01-28
Official status: Continued
Effective date: Not listed

Plain English Breakdown

The bill summary does not specify that the program continues through 2031; it only specifies through 2032.

Child Tax Credit in Virginia

This bill creates a refundable child tax credit for individual income taxes in Virginia, matching the federal child tax credit amount for each qualifying child from 2027 through 2031.

What This Bill Does

Creates a new section in Virginia's tax code allowing a refundable child tax credit for individuals and married couples filing jointly.
The credit is available for each qualifying child if the household income is at or below 300% of the federal poverty level.
The amount of the credit matches the federal child tax credit for each qualifying child in the same year.
Limits the total credits to $5 million per year, allocated on a first-come, first-served basis by the Department.
Requires taxpayers to follow guidelines set by the Tax Commissioner and refunds any excess credit within 90 days.

Who It Names or Affects

Individuals with qualifying children who meet income requirements.
Married couples filing jointly with qualifying children under their care.

Terms To Know

Qualifying child: A dependent child as defined by the Internal Revenue Code, eligible for tax benefits.
Refundable credit: A tax credit that can result in a refund if it exceeds the amount of tax owed.

Limits and Unknowns

The total credits allowed each year are capped at $5 million.
Only one credit per qualifying child is permitted, and the federal requirements must be met to claim this credit.

Bill History

2026-01-28 Finance and Appropriations
Continued to 2027 in Finance and Appropriations (9-Y 4-N)
2026-01-26 Senate
Fiscal Impact statement From TAX (1/26/2026 8:12 am)
2026-01-12 Senate
Prefiled and ordered printed; Offered 01-14-2026 26105129D
2026-01-12 Finance and Appropriations
Referred to Committee on Finance and Appropriations

Official Summary Text

Individual income tax; child tax credit.
Creates a refundable individual income tax credit in taxable years 2027 through 2031 in an amount equal to that allowed for the corresponding federal child tax credit. Only one credit may be claimed for each qualifying child, as defined in the bill.

Current Bill Text

Read the full stored 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 individual income tax; child tax credit.

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. Child tax credit.

A.
For purposes of this section, "qualifying
child" means
the same as that term is defined in §

24
of the Internal Revenue Code.

B.
For taxable years beginning on and after January 1, 202
7
, but before January 1, 203
2
, an individual or married individuals filing jointly

with
a household income at or below 300 percent of the federal poverty

level
in the previous taxable year
shall be allowed a
refundable
credit against the tax levied pursuant to §
58.1-320
for each
qualifying child
of the taxpayer's household. The amount of the credit shall be
equal to the
amount of the
credit allowed under § 24
of the Internal Revenue Code
for each such
qualifying child
for the same taxable year
. Only one credit
shall
be claimed per such
qualifying child
.

C.
Any credit allowed under this section shall be reduced by the amount of any credit claimed
for
the same
qualifying child
pursuant to §
58.1-339.8
in the same taxable year.

D. The aggregate amount of credits allowable under this section shall not exceed $5 million per taxable year. Credits shall be allocated by the Department on a first-come, first-served basis.

E
.
If the amount of the credit exceeds the taxpayer's liability for such taxable year, the excess
shall
be refunded by the Tax Commissioner
on behalf of the Commonwealth
to the extent and in the manner provided under §
24 of the Internal Revenue Code
. Tax
c
redits shal
l be refunded within 90 days after the filing date of the income tax return on which the individual applies for the refund.

F
. No credit shall be allowed under this section
to the extent the corresponding federal credit pursuant to § 24 of the Internal Revenue Code has been denied, reduced, or recaptured due to fraud, ineligibility, or noncompliance with federal requirements.

G. 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.).