Am I correct that Virginia's Deconformity from the Increased Medial Expense Deduction will result in an addition to 2017 income on VA Schedule ADJ, line 2b?

[Danny7700]

Virginia Tax Bulletin 18-1, dated 02/26/2018, includes Virginia's conformity to the internal revenue code advanced to February 9, 2018. It states "For Taxable Year 2017,  Virginia will specifically deconform  from the provision of the Tax Cuts and Jobs Act that temporarily increases the amount of the medical expense deduction. This means the medical deduction floor will be 10% of FAGI instead of 7.5% on the 2017 Virginia Tax Return.

[maglib · Accepted solution]

You are correct.  TT should account for this in the adjustments section of the state interview.  I am not a TT employee but, if it does not, I can contact TT reps.

Medical and Dental Expenses

If you claimed a deduction for medical expenses on your 2017 federal return, you must make an addition on your Virginia return to account for the difference in the amount allowed in Virginia. In Virginia, you can deduct the total amount of qualified medical and dental expenses that exceeds 10% of your federal adjusted gross income. On your federal return, you can deduct the amount that exceeds 7.5%. Because the threshold is higher in Virginia, you must make an addition on your Virginia return to account for the difference. 

Use Code 99 on Schedule ADJ (Schedule 760PY ADJ for part-year residents; Schedule 763 ADJ for nonresidents) to compute the amount you need to add back to your Virginia return. 

Visit www.irs.gov for more information about which medical and dental expenses are eligible for deduction. 

If you have already filed your 2017 Virginia individual income tax return, and claimed a deduction for medical and dental expenses, you will need to amend your return.

[Danny7700]

Thank you for your very specific and helpful answer!

[stevespen]

think turbo tax is adding too much medical back on state return

[stevespen]

line 6 of medical expense addition worksheet should not be less than zero.

[maglib]

@stevespen it's an addition to your income.  take amount entered from schedule A for medical expenses.  That amount is then limited to amount in excess of 7.5% of AGI for Federal.  For VA Purposes that amount is limited to amount in excess of 10% of AGI.  Ex. 100k in AGI has a limit for federal of only amounts of medical over 7500.  For VA it's for medical expenses only in amounts over $10k.  So if you had $9k in medical expenses, you add back $1,500, the full amount allowed for federal as no amount exceeded the limits.  If you had $11k in medical expenses you will add back only $500.

[Danny7700]

<a rel="nofollow" target="_blank" href="http://www.tax.virginia.gov">www.tax.virginia.gov</a> now has Worksheet: Virginia Medical Expenses Additions that leads you through the calculation and instructs you where to enter the additional amount.

[PatC2]

The worksheet states... "taxpayers claiming a medical expenses deduction will be required to report an addition on the Virginia return that is equal to the difference between the amount of the medical expenses deduction reported on their federal income tax return and the amount computed using a deduction floor equal to 10% of federal adjusted gross income."  My total medical expenses exceed 7.5% of FAGI but not 10%; therefore, it seems to me I would add back to my Virginia income the amount of the allowed federal deduction (the amount exceeding 7.5%).  TurboTax is calculating an addition much greater than that.  Am I confused or what?

[stevespen]

You are correct. It is the program that is wrong. I manually corrected mine with an override.

[PatC2]

@stevespen  Thanks!  And you are correct that line 6 on the worksheet should not be less than zero.

[maglib]

@stevespen  @PatC2   seems both of you had same issue so I'm letting TT support know there may be an issue. They may ask you to submit a token file that washes out personal information.

[KariG]

I have sent you both an email requesting a diagnostic file so we can look into this further.

[PatC2]

@TurboTaxKari   I am not doing my taxes thru my TurboTax account.  Any other way to send the info?

[KariG]

I'm sorry I misunderstood, I thought this was an error you were experiencing within the TurboTax program.

[PatC2]

@TurboTaxKari   It is.  I goofed and have now sent the info.  The token # is 434370. Sorry!!