Model Virginia HB979 Income Tax Reform (2027+) #7214
Description
Summary
Model the income tax and standard deduction changes proposed in Virginia HB979, introduced by Delegate Vivian Watts.
Bill Links:
- Summary: https://lis.virginia.gov/bill-details/20261/HB979
- Bill text: https://lis.blob.core.windows.net/files/1086770.PDF
Changes to Model
1. Income Tax Brackets (Effective 2027-01-01)
HB979 adds two new high-income brackets to Virginia's income tax structure (§58.1-320):
| Taxable Income | Current Rate | HB979 Rate |
|---|---|---|
| $0 - $3,000 | 2% | 2% |
| $3,000 - $5,000 | 3% | 3% |
| $5,000 - $17,000 | 5% | 5% |
| $17,000 - $600,000 | 5.75% | 5.75% |
| $600,000 - $1,000,000 | 5.75% | 8% |
| $1,000,000+ | 5.75% | 10% |
2. Standard Deduction (Effective 2027-01-01)
HB979 establishes new standard deduction amounts (§58.1-322.03(1)(b)(vi)):
| Filing Status | Baseline (2027+) | HB979 Amount |
|---|---|---|
| Single | $3,000 | $10,000 |
| Head of Household | $3,000 | $15,000 |
| Married Filing Jointly | $6,000 | $20,000 |
| Married Filing Separately | $3,000 | $10,000 |
Note: Standard deduction amounts will be indexed for inflation beginning January 1, 2028, based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).
Implementation Approach
Model as a contrib reform following the RI high earner tax pattern:
Parameters (gov/contrib/states/va/hb979/)
in_effect.yaml- Boolean to enable/disable reformbrackets.yaml- New income tax brackets with 8% and 10% ratesstandard_deduction.yaml- New standard deduction amounts by filing status
Reform (reforms/states/va/hb979/)
va_hb979_reform.py- Reform that modifies:va_income_tax_before_non_refundable_credits- Apply new bracketsva_standard_deduction- Apply new standard deduction amounts
Tests (tests/policy/baseline/contrib/states/va/hb979/)
- Test cases for various income levels (below $600k, $600k-$1M, above $1M)
- Test cases for each filing status standard deduction
- Test reform not in effect scenario
References
- Code of Virginia § 58.1-320 (Income Tax Rates)
- Code of Virginia § 58.1-322.03 (Standard Deductions)
- Virginia HB979 (2026 Regular Session)