Virginia Replaces Rolling IRC Conformity with Fixed Date December 31, 2025
Summary
Virginia has enacted legislation replacing its rolling Internal Revenue Code conformity with a fixed conformity date of December 31, 2025. Under the new framework, Virginia will no longer automatically adopt most new federal tax provisions but will continue to conform to extensions of existing provisions. The legislation enables Virginia to adopt most provisions of the 2025 federal Budget Reconciliation Act (P.L. 119-21) and modifies the business interest deduction to 20% for Tax Year 2025.
What changed
Virginia has replaced its rolling IRC conformity with a fixed conformity date of December 31, 2025. Previously, Virginia automatically conformed to all federal tax law changes. Under the new fixed date system, Virginia will only automatically conform to extensions of existing federal tax provisions to which it already conforms. The legislation allows Virginia to conform to most provisions of the 2025 federal Budget Reconciliation Act (P.L. 119-21) and reduces the disallowed business interest deduction to 20% beginning in Tax Year 2025.
Affected parties including individuals, businesses, and nonprofits filing Virginia taxes must now monitor both federal tax law changes and Virginia's specific conformity status, rather than relying on automatic adoption. Virginia taxpayers should review Tax Bulletin 26-1 and consult with tax professionals to understand how the fixed date framework affects their state tax obligations and to identify any differences between federal and Virginia taxable income.
What to do next
- Monitor Virginia's conformity status when federal tax law changes
- Review Tax Bulletin 26-1 for details on the fixed date conformity framework
- Consult tax professional for impact on Virginia tax filings
Archived snapshot
Apr 16, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
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.
Published on: February 20, 2026
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