VA HB979

Increases the standard deduction for Virginia individual income taxes beginning January 1, 2027, to $12,000 for single filers, $18,000 for head of household, and $24,000 for married couples filing jointly, with annual inflation adjustments starting in 2028.

Creates two new higher income tax brackets effective January 1, 2027: 8% on income between $600,000 and $1,000,000, and 10% on income exceeding $1,000,000.

Establishes a new distribution mechanism requiring 5.5% of total individual income tax revenue to be distributed annually to counties and cities for public school expenses, with allocations based on each locality's share of statewide income tax revenue.

Creates a refundable child tax credit of $400 per dependent under age six for families with Virginia adjusted gross income not exceeding $100,000, available for taxable years 2026 through 2030.

Makes the 20% refundable earned income tax credit permanent by removing the January 1, 2027 expiration date.