Legislation Watch: Virginia Taxes to Conform to Federal Code
Virginia Governor Glenn Youngkin recently signed legislation conforming the state’s tax code to the 2021 Internal Revenue Code, which includes changes made by aid packages created to mitigate the economic impact of the COVID-19 pandemic.
With the governor’s signature, the law’s conformity change is effective immediately.
The bill allows full deductibility of expenses paid or incurred with forgiven Paycheck Protection Program (PPP) loan proceeds and expenses paid or incurred with Economic Injury Disaster Loan program funding for taxable year 2021 and after.
It also allows businesses that received forgivable federal loans — essentially grants — to deduct up to $1 million in expenses from the previous tax year, which effectively functions as a retroactive tax break for businesses that received federal emergency aid two years ago.
If you have any questions about the information above, please contact your E. Cohen advisor.