Bill > HB1754

This bill modifies Virginia's income tax structure by introducing a new top tax bracket and adjusting standard deductions. Beginning in the 2026 tax year, the bill establishes a seven percent tax rate for Virginia taxable income exceeding $600,000, which is an increase from the current top tax bracket of 5.75% on income over $17,000. Additionally, the bill increases the standard deduction to $12,000 for single individuals and $24,000 for married individuals starting in the 2025 tax year. From 2026 onward, these standard deduction amounts will be indexed for inflation annually, meaning they will be automatically adjusted each year based on changes in the Chained Consumer Price Index (C-CPI-U). This mechanism ensures that the standard deduction keeps pace with the rising cost of living, providing taxpayers with a potential ongoing tax benefit that reflects economic changes. The bill aims to provide tax relief by offering higher standard deductions while also introducing a more progressive tax rate for higher-income earners.

Budget and Finance

https://lis.virginia.gov/bill-details/20251/HB1754