$400 One-Time Tax Rebate From Virginia Now A Viable Option

After months of negotiations, state lawmakers have finally agreed on the state budget, clearing the way for the one-time tax rebate from Virginia. Eligible individuals could get $200, while families could get $400 in a one-time tax rebate from Virginia. Apart from the rebate, the budget deal also reinstates a sales tax holiday, as well as increases the standard tax deduction.

One-Time Tax Rebate From Virginia: How It Ended The Stalemate

On Friday, lawmakers announced that they had reached an agreement on amendments to the state’s two-year budget. The deal puts an end to the six months of negotiations between House and Senate representatives.

Sen. Janet Howell (D-Fairfax), Sen. George Barker (D-Fairfax), and Del. Barry Knight (R-Virginia Beach) announced the budget deal in a joint press release.

“While the negotiations have been deliberate and extended, we are very pleased that the outcome is both fair and balanced toward the priorities of the House and Senate,” the joint press release said.

Months-long disagreements between Republicans and Democrats were primarily over the use of surplus funds. Republicans wanted longer-term tax cuts, while Democrats favored greater spending on state services like education.

Gov. Glenn Youngkin’s proposed spending plan for this year’s General Assembly session included $1 billion more in new tax cuts. Now that the deal has been reached without the additional tax cuts, Gov. Youngkin needs to sign it for it to become law.

Last week, Gov. Youngkin said he is “willing to accept” a compromise by backing off his demand of recurring tax cuts, which would have cost the state about $1 billion a year, and accept instead the one-time tax relief.  

The governor hinted that he would push for permanent cuts in future legislative sessions. Control of both chambers will be up for grabs in the November 7 elections.

Last year’s budget cut $4 billion in taxes, including eliminating 1.5% statewide tax on groceries. Also, the budget raised the standard deduction for personal income tax from $4,500 to $8,000 for individuals, and from $9,000 to $16,000 for couples filing jointly.

What Does The Final Deal Include?

Although the final version of the deal is still not ready, the negotiators said it will include a one-time tax rebate from Virginia of $200 for individuals and $400 for families. Also, the final version will raise the standard deduction to $17,000 (from $16,000) for joint filers, and $8,500 for individuals (up from $8,000).

Moreover, the deal reinstates the state sales tax holiday, and removes the age requirement for the military retiree subtraction. Further, the press release noted that the budget would offer “unprecedented investments in education, natural resources, and behavioral health.”

The deal prioritizes investment in education at all levels to ensure students are workforce ready. For instance, the budget negotiators said that the deal offers increased financial support, and additional operating support to college students.

“Taken together, these actions provide relief to low- and middle-income Virginia citizens and businesses,” the press release reads.