Virginia's Rolling Conformity to the Internal Revenue Code Replaced with a Fixed Date of December 31, 2025

The General Assembly recently passed legislation that replaces Virginia’s rolling conformity to the IRC with a fixed conformity date of December 31, 2025.

• Virginia will continue to automatically conform to any federal tax law amendment that extends the expiration date of a federal tax provision to which Virginia conforms or has previously conformed.
• The legislation allows Virginia to conform to most of the provisions of the 2025 federal Budget Reconciliation Act (P.L. 119-21) and decreases Virginia’s deduction for disallowed business interest to 20% beginning in Tax Year 2025.  

For more information, see Tax Bulletin 26-1.