Key Virginia Tax Season Considerations for the 2025 Tax filing season

As we move further along into tax filing season, Virginia taxpayers and businesses should anticipate a filing environment that is more complex than in prior years. A combination of recent federal tax law changes, Virginia’s conformity rules, and ongoing legislative activity during the current General Assembly session may influence how and when returns can be completed. Understanding these factors in advance will help minimize confusion, avoid delays, and support more accurate filing outcomes.

Rolling Conformity and Potential Delays in Filing

Virginia transitioned to a rolling conformity system in 2023, under which state tax law automatically incorporates changes to the federal Internal Revenue Code as they are enacted, unless the General Assembly chooses to address them separately. This framework is intended to streamline compliance by aligning federal and state tax rules and reducing the number of Virginia‑specific adjustments taxpayers must perform.

However, Virginia has paused rolling conformity for the 2025 and 2026 tax years. As a result, the state must now wait for the General Assembly to address how any federal changes will apply for Virginia income tax purposes. This pause introduces uncertainty for both individual and business taxpayers as certain federal provisions may not yet apply to a Virginia return until legislative action is completed. As a result, some taxpayers may need to wait to file their tax returns until the General Assembly passes a conformity bill,.

Federal Changes Under the OBBBA Act

The One Big Beautiful Bill Act (OBBBA) introduced several notable federal tax changes affecting both individuals and businesses, including modifications to deductions, credits, and income calculations.

Although these changes take effect at the federal level, Virginia’s pause in rolling conformity means that many OBBBA-related provisions do not currently apply when preparing Virginia returns. This disconnect in rolling conformity may ultimately increase the number of differences between federal taxable income and Virginia taxable income.

Taxpayers should not assume that a federal deduction or credit expanded under OBBBA will reduce their Virginia liability. Instead, careful attention to Virginia‑specific adjustments will be necessary, and tax preparers may see a higher number of reconciliation items this season.

Legislative Activity and Potential State Tax Changes

The Virginia General Assembly is actively considering multiple tax‑related proposals that could affect current and future tax years. In Virginia, a tax bill must be introduced by a legislator, reviewed by committee, and approved by both the House of Delegates and the Senate. Once passed, the bill moves to the Governor, who may sign, amend, or veto it.

Tax legislation often evolves significantly during this process. Provisions may be narrowed, expanded, delayed, or removed entirely. As a result, early versions of proposals frequently differ from the final enacted law. Taxpayers should be mindful that legislative developments may continue throughout the session and could influence filing requirements or planning considerations.

Summary

Overall, this tax season will require patience, careful review, and close monitoring of federal developments, state conformity determinations, and legislative outcomes. Staying informed will help ensure accurate, compliant, and timely filings.