When will Lacerte accommodate Virginia conformity? i.e. QBI deduction.

[TLuck]

Not deducting QBI on Virginia.

[rbynaker · Accepted solution]

QBID is not deductible in VA.

[TLuck]

See VA Tax Bulletin 19-1.  It does not mention not conforming to QBID.  ??

[rbynaker]

It doesn't need to, it's not relevant.

VA starts with federal AGI and makes certain additions, subtractions and deductions as defined by the VA tax code.  Then it EITHER takes the VA standard deduction if the taxpayer did not itemize on the federal return OR subtracts federal itemized deductions and adds back state income taxes, to arrive at VA taxable income.

If QBID had been made an above the line deduction (like DPAD was), then you're absolutely right, it would impact the VA return.  But instead the TCJA moved this deduction outside the definition of both AGI and itemized deductions.  Thus, outside the scope of what VA conforms to.

Rick (in VA)

[TLuck]

I definitely see your point.  Thank you very much.

[rbynaker]

No problem.  I agree, they really could have made it more clear in the bulletin.

I'm still waiting on some sort of official position on how the SALT cap impacts the VA state income tax add-back.  I don't know about the Lacerte side of things but I'm not convinced that ProSeries has it right (but then that could be mostly because I'm not convinced VA Tax has it right either at this point).  In many cases you can make it a moot point by forcing a sales tax deduction on the federal return.