This update affects you if:
- you are subject to itemized deduction limitations and/or
- you claim the general sales tax deduction on Line 5a of the Virginia Schedule A.
What’s new?
The 2026 Virginia General Assembly passed legislation generally conforming Virginia to federal tax law as of December 31, 2025 (see Tax Bulletin 26-1 for details). This included conforming to the federal state and local tax (SALT) cap amounts used in the Schedule A itemized deduction computations.
For tax year 2025, the amount entered on Line 5a of Virginia Schedule A should be limited to
- $40,000 ($20,000 if married filing separately), or
- the phased-down amount based on modified adjusted gross income (MAGI) as specified under federal law.
- The phase-down begins at $500,000 MAGI for married filing jointly ($250,000 for single filers) and reduces the cap by 30% of the excess MAGI over the threshold.
If you received a notice from Virginia Tax that we adjusted your tax year 2025 return
No further action is required. We have already adjusted your return to reflect the updated SALT cap, and no additional adjustments will be made solely on account of this issue.
If you filed your tax year 2025 return using the prior $10,000 SALT cap ($5,000 if married filing separately) and did not receive a notice
You may be entitled to an additional deduction and should consider filing an amended return to reflect the applicable SALT cap amount under the new legislation.
If you have not yet filed your tax year 2025 return
Enter the applicable SALT cap amount, either $40,000 ($20,000 if married filing separately) or the phased-down MAGI-based amount, directly on Line 5a of your Virginia Schedule A.
Important Note: Make sure to apply the applicable cap to the amount entered on Line 5a, not downstream on the Limited Itemized Deduction Worksheet. Otherwise, we may not be able to correctly process your return.