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SB 1378

Child tax credit; Virginia adjusted gross income.

2025 Regular Session Introduced by Lashrecse Aird

Virginia bill would allow child tax credit to reduce adjusted gross income, expanding tax relief for families with dependents but facing indefinite postponement over fiscal concerns.

Passed by indefinitely in Finance and Appropriations (15-Y 0-N)
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Bill Summary · SB 1378

Legislative bill overview

SB 1378 would modify Virginia's tax code to allow a child tax credit to be applied against Virginia adjusted gross income (AGI) calculations. Currently, Virginia's child tax credit cannot reduce AGI, limiting its tax benefit. This change would align Virginia's credit structure more closely with federal tax treatment and expand the credit's value for eligible families.

Why is this important

Child tax credits are a primary mechanism states use to reduce tax burden on families with dependent children. Expanding credit applicability could increase after-tax income for working families, particularly lower-to-middle income households, potentially affecting education funding, consumer spending, and state revenue projections. The Finance and Appropriations Committee's passage suggests confidence in the proposal, though the indefinite deferral indicates either timing concerns or unresolved fiscal questions.

Potential points of contention

  • Fiscal impact: The indefinite deferral suggests uncertainty about revenue loss; state budget constraints may make permanent tax expenditures controversial
  • Targeted benefit: The change may disproportionately benefit higher-income families if Virginia's credit income thresholds are generous, raising fairness questions
  • Implementation complexity: Modifying AGI calculations requires substantial tax code restructuring with potential compliance and administrative costs

Compiled from official sources — confirm details with the bill’s official record.

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