Virginia Tax Refunds Coming; state revenues grow, but so does inflation | Government and politics

Almost normal temperatures over the next weekend with minimal chance of rain


Virginia taxpayers will begin receiving one-time tax refunds next week, either directly to their bank accounts or through the mail.

The Tax Department expects to issue a total of 3.2 million rebates by the end of the year, of which 2.9 million are expected to arrive by mid-October by the October 17 deadline for taxpayers who have filed their returns earlier. of 1 July. will begin issuing discounts on Monday.

Individual taxpayers will receive up to $ 250 and jointly submitting couples will receive $ 500 under the plan newly elected Governor Glenn Youngkin pushed and outgoing Governor Ralph Northam included in his budget proposal last year.

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Some payments may be reduced for taxpayers who have other state liabilities that state law requires them to repay earlier. The last time the state sent refund checks to taxpayers, in 2019, some 900,000 registrants were ineligible – the law requires taxpayers to pay at least what they would have received – and for 300,000 the checks were reduced or fully compensated by others. outstanding debts.

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The pending tax relief wasn’t the only good news for Tuesday’s House Allocation Committee.

The Youngkin administration reported that state revenues increased nearly $ 224 million in August, compared to the same month a year ago, or 5.3 percent after adjusting for an extra day of payroll deposit.

State lawmakers have been encouraged by the continued growth in state revenues, especially income taxes on pay that reflect new jobs and higher wages.

“Maybe we’ll have some soft landing,” House appropriations chairman Barry Knight, R-Virginia Beach, told Finance Secretary Steve Cummings.

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Knight also said he was encouraged that the continuing decline in gasoline prices has moderated the rise in inflation for other goods and services. “It seems that inflation is not rising as fast as we thought,” he said.

On Tuesday, the Bureau of Labor Statistics reported that inflation rose 0.1% in August, compared to July, when it was stable from the previous month. However, prices rose 8.3% in August compared to the same month a year ago, after reaching a peak of 9.1% higher in June and a drop of 8.5% in July.

The average price of regular unleaded gasoline dropped below $ 3.50 per gallon in Virginia to $ 3.47 per gallon on Monday after peaking in mid-June at $ 4.86 per gallon, according to AAA. Mid-Atlantic. The average price was $ 3.38 per gallon in the Richmond area, down 31 cents per gallon from a month ago, but still 43 cents per gallon more than a year ago.

However, Cummings said home prices remain high, despite a continued decline in home sales and a 20% drop in state tax revenue from deeds and other court documents in August, compared to the same month a year ago. The average home price was $ 385,000 in July, which is 25% higher than three years ago, before the start of the COVID-19 pandemic.

Youngkin is still looking to relieve the gas tax as he looks ahead to next year

For Virginia taxpayers, one-time rebates are the most immediate form of relief in a $ 4 billion package of tax cuts in a pair of state budgets approved by the General Assembly and signed by Youngkin in June.

The budgets also include an almost 80% increase in the standard deduction that Virginians will be able to claim on their next tax return; the repeal of the state tax on the purchase of food of 1.5%; an income tax exemption on a portion of military retirement income; and a refundable earned income tax credit that will provide additional discounts to low-income working families.

The package does not include a temporary freeze on the state gasoline tax that Youngkin had advocated, along with a cap on future increases in inflation. The Virginia Senate, which Democrats strictly control, has rejected proposals to cut the governor’s gas tax three times, saying it was unlikely they would significantly lower prices at the pump.

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The tax department is bracing for a surge in demands from taxpayers about their eligibility for one-time rebates. In 2019, its customer service center received 60,000 calls, so tax commissioner Craig Burns said the department hired a contractor to answer rebate calls this year.

Burns said taxpayers will be able to contact the department online or by phone, using their Social Security number and zip code to determine eligibility for the discount, the amount they will receive, and when they can expect to get it.

The department has dedicated a web page to the discount program at www.tax.virginia.gov/rebate.

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