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A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 sections numbered
58.1-339.15
and
58.1-339.16
, relating to income tax; nonpublic and public school tax credits.
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 sections numbered
58.1-339.15
and
58.1-339.16
as follows:
§
58.1-33
9
.15.
Nonpublic school
tax credit.
A. For purposes of this section:
"Eligible student" means a student who is (i) exempt from the compulsory attendance law for the purpose of home education or enrollment in a private educational institution in accor
dance with the provisions of §
22.1-254
;
(ii)
at the time any qualifying ex
pense is incurred,
domiciled in a
n area that
, at any time,
received designation as a
qualified opportunity zone
within
Planning District 15
;
(iii) under the age of 18 at the close of the school year for which a credit under this section is sought
;
and (iv) either receiving home instruction a
s authorized under §
22.1-25
4
.1 or enrolled full time in a kindergarten through twelfth grade education program at any private school in the Commonwealth during the school year for which a credit is sought.
"Household" means an individual, or in the case of married individuals, an individual and his spouse, regardless of whether the individual and his spouse file combined or separate Virginia individual income tax returns.
"Poverty guidelines" means the poverty guidelines for the 48 contiguous states and the District
of Columbia updated annually in the Federal Register by the U.S. Department of Health and Human Services under the authority of § 673(2) of the Omnibus Budget Reconciliation Act of 1981.
"Qualified opportunity zone" ha
s
the same meaning as
such term is defined in §1400Z-1
of the Internal Revenue Code of 1986
.
"Qualifying expense" means any expense incurred duri
ng the taxable year for (i) instruction-related materials, including textbooks, workbooks, and supplies; (ii) courses or programs used in home instruction; (iii)
tuition and fees for any
private school
or career preparatory, technical, or higher education institution
; (iv)
necessary
educational assistance for an eligible student with a disability
;
(v) fees for nationally standardized achievement tests, advanced placement examinations, examinations taken to gain admission to a school
,
program
,
or institution of higher education;
and (vi) transportation to and from an eligible student's education provider
.
B. For taxable year
s
beginning on and after January 1, 2026, but before January 1, 203
1
:
1. A
taxpayer shall be allowed a refundable credit against the tax levied pursuant to §
58.1-320
for up to $5,000 of qualifying expenses incurred by
such taxpayer who is the
parent or legal guardian
of an
eligible student. Any credits claimed pursuant to this section for qualifying expenses incurred on behalf of one eligible student
shall not be claimed by any other taxpayer for such
student
.
No more than $2,000 of any credit claimed pursuant to this subdivision may be used for qualify
ing expenses incurred for computer expenses, internet access expenses, or transportation-related expenses.
2.
A
household (i) whose family Virginia adjusted gross income does not
exceed 300 percent of the poverty guideline amount corresponding to a household of an equal number of persons as listed in the poverty guidelines published during such taxable year and (ii)
tha
t
qualifies for the credit under subdivision 1 shall be allowed to claim a refundable credit of $2,500 in addition to the credi
t provided in subdivision 1.
However, such household
that is eligible for $7,500 pursuant to subdivision 1 and this subdivision
shall not be allowed to claim more than $3,000 of
such
credit
s
for qualifying expenses incurred for computer expenses, internet access expenses, or transportation-related expenses.
3. Any taxpayer claiming credits pursuant to this subsection may only claim such credits for one eligible student in a taxable year
. The aggregate amount of credits allowable under this section shall not exceed $
2
5 million in any taxable year; however, in the event that the aggregate amount of credits claimed in a
single taxable year is greater than
90
percent of such amount,
the
aggregate credit cap amount shall be increased in the immediately succeeding taxable year by 10 percent. Credits shall be allocated by the Department on a first-come, first-served basis.
C. To claim the credit, the taxpayer shall submit purchase receipts with
his
income tax return to verify any qualifying expenses incurred and shall provide with the income tax return (i) th
e name of the
student
receiving home instruction for the year and the school division to which notice was provided pursuant to subsection B of §
22.1-254.1
or (ii) the name of the
student
attending private school and certification of such enrollment from the private school.
D. If the amount of the credit that may be claimed in any single taxable y
ear exceeds the taxpayer's liability for taxes imposed by this chapter for that taxable year, the excess shall be refunded by the Tax Commissioner within 90 days after the filing date of the income tax return on which the individual applies for the refund.
E. 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.).
§
58.1-339.16
.
Public school
ta
x credit.
A. For purposes of this section:
"Eligible student" means a student who is (i) subject
to the compulsory attendance law in accordance with the provisions of §
22.1-254
;
(ii)
at the time any qualifying ex
pense is incurred,
domiciled in a
n area that
, at any time,
received designation as a
qualified opportunity zone
within
Planning District 15
;
(iii) under the age of 18 at the
close of the school year for which a credit under this section is sought
;
and (iv) enrolled full time in a kindergarten through twelfth grade education program at any public school in the Commonwealth during the school year for which a credit is sought.
"Household" means an individual, or in the case of married indiv
iduals, an individual and his spouse, regardless of whether the individual and his spouse file combined or separate Virginia individual income tax returns.
"Poverty guidelines" means the poverty guidelines for the 48 contiguous states and the District of Columbia updated annually in the Federal Regist
er by the U.S. Department of Health and Human Services under the authority of § 673(2) of the Omnibus Budget Reconciliation Act of 1981.
"Qualified opportunity zone" ha
s
the same meaning as such term is defined in §1400z-1 of the Internal Revenue Code of 1986.
"Qualifying expense" means any expense incurred during the taxable year for (i) instruction-related materials, including textbooks, workbooks, and supplies; (ii) tuition and fees for any career preparatory, technical, or higher education institution; (i
ii
) necessary educational assistance for an eligible student with a disability; (
i
v) fees for nationally standardized achievement tests, advanced placement examinations, examinations taken to gain admission to a school
,
program
,
or institution of higher education; and (v) transportation to and from an eligible student's education provider.
B. For taxable years beginning on and after January 1, 202
6
, but before January 1, 203
1
:
1. A
taxpayer shall be allowed a refundable credit against the tax levied pursuant to § 58
.
1-320
for up to $1,500 of qualifying expenses incurred by
such taxpayer who is the
parent or legal guardian
of an
eligible student. Any credits claimed pursuant to this section for qualifying expenses incurred on behalf of one eligible student shall not be claimed by any other taxpayer for such
student
.
No more than $600 of any credit claimed pursuant to this subdivision may be used for qualifying expenses incurred for computer expenses, internet access expenses, or transportation-related expenses.
2.
A
household (i) whose family Virginia a
djusted gross income does not exceed 300 percent of the poverty guideline amount corresponding to a household of an equal number of persons as listed in the poverty guidelines published during such taxable year and (ii)
that
qualifies for the credit under subdivision 1 shall be allowed to claim a refundable credit of $2,500 in addition to the credit prov
ided in subdivision 1.
However, such household that is eligible for $4,
0
00 pursuant to subdivision 1 and this subdivision shall not be allowed to claim more than $
1
,
6
00 of such credits for qualifying expenses incurred for computer expenses, internet access expenses, or transportation-related expenses.
3. Any taxpayer claiming credits pursuant to this subsection may only claim such credits for one eligible student in a taxable year. The aggregate amount of credits allowable under this section shall not exceed $
2
5 million in any taxable year
; however, in the event that the aggregate amount of credits claimed in a single taxable year is greater than
90
percent of such amount, the aggregate credit cap amount shall be increased in the immediately succeeding taxable year by 10 percent. Credits shall be allocated by the Department on a first
-
come, first-
served basis.
C. To claim the credit, the taxpayer shall submit purchase receipts with the income tax return to verify any qualifying expenses incurred and shall provide with the income tax return the name of the
student
enrolled full time in a kindergarten
through twelfth grade education program at any public school in the Commonwealth for the year and the school division in which such child is enrolled.
D. If the amount of the credit that may be claimed in any single taxable year exceeds the taxpayer's liability for taxes impose
d
by this chapter for that taxable year, the excess shall be refunded b
y the Tax Commissioner within 90 days after the filing date of the income tax return on which the individual applies for the refund.
E. 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.).