Virginia Society of Tax & Accounting Professionals VA Tax News

Virginia Tax Bulletin 26-1: Virginia's Rolling Conformity to the Internal Revenue Code Replaced with a Fixed Date of December 31, 2025

Mon, 23 Feb 2026 22:25:34 GMT

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

During the 2026 General Assembly Session, the 2026 Amendments to the 2025 Appropriation Act replaced Virginia’s rolling conformity to the IRC with a fixed conformity date of December 31, 2025.

About the legislation

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 beginning in Tax Year 2025.

For more information, including details on new and existing exceptions to the IRC, view the Tax Bulletin 26-1 at: www.tax.virginia.gov/tb-26-1-date-of-irc-conformity-advanced

View Tax Bulletin

Interest Rates in Virginia, 4th Quarter 2025

Thu, 18 Sep 2025 17:54:10 GMT

Virginia's interest rates will remain the same for the fourth quarter of 2025

Virginia's interest rates will remain the same for the fourth quarter of 2025.

Federal rates for the fourth quarter of 2025 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the fourth quarter of 2025 will be 9% for tax underpayments (assessments) and 9% for tax overpayments (refunds).

Details about the interest rates for the fourth quarter of 2025 can be found in Tax Bulletin 25-4.

Interest Rate Update

Thu, 12 Jun 2025 18:48:03 GMT

Virginia's interest rates will remain the same for the third quarter of 2025

Virginia's interest rates will remain the same for the third quarter of 2025. State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621.

Federal rates for the third quarter of 2025 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the third quarter of 2025 will be 9% for tax underpayments (assessments) and 9% for tax overpayments (refunds).

Details about the interest rates for the third quarter of 2025 can be found in Tax Bulletin 25-3.

View Tax Bulletin

Virginia General Assembly 2025 Session Summary Now Available

Thu, 12 Jun 2025 18:46:44 GMT

The Legislative Summary provides an overview of state and local tax laws passed this year. It covers:

State taxes administered by Virginia Tax, and
Local taxes Virginia Tax helps administer, or on which Virginia Tax provides advisory assistance.

Legislation affecting taxes administered by other state agencies is generally not included.

Effective dates of the laws vary and are noted in each description.

The Summary is intended to provide a brief overview for informational purposes only, and does replace actual state laws, local ordinances, or tax regulations.

View the Legislative Summary

Virginia's interest rates will remain the same for the second quarter of 2025

Mon, 17 Mar 2025 20:54:50 GMT

Virginia's interest rates will remain the same for the second quarter of 2025. State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621.

Federal rates for the second quarter of 2025 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the second quarter of 2025 will be 9% for tax underpayments (assessments) and 9% for tax overpayments (refunds).

Details about the interest rates for the second quarter of 2025 can be found in Tax Bulletin 25-1.

View Tax Bulletin

Final Report on 2025 General Assembly

Wed, 19 Feb 2025 17:06:43 GMT

To review a final list of tax-related bills introduced during this session, and their final status, click here.

Update List of General Assembly Tax-Related Bills

Wed, 05 Feb 2025 21:47:42 GMT

Review this updated list of bills, which includes several pages of new bills. Many bills originally proposed have already been killed, and all remaining have been assigned to a committee for review.

Updated list of bills

Virginia Employer/Payer 2024 Withholding Tax Deadline is Jan. 31, 2025

Thu, 30 Jan 2025 17:06:22 GMT

Friday, Jan. 31, 2025, is the due date for submitting 2024 withholding records, including W-2 and 1099 forms. Issuers of 1099 documents can find specifications in our W-2/1099 guide for web upload.

Filing Options

There are two free online filing options available to help you submit withholding records electronically:

eForms, a fast and free way to file and pay state taxes online; and
Web Upload, which allows you to file and pay employer withholding and income tax statements.

We also accept corrected W-2s (or “W-2Cs”) for Tax Year 2021 and beyond. Use this form to update or change wage or withholding data. For Tax Year 2020 and prior years, payroll providers and employers will need to submit written copies of updated W-2s.

The authentication process (for both eForms and Web Upload) works the same way for W-2Cs and W-2s, so taxpayers should be prepared to enter requested withholding info to be authenticated.

More information about the Withholding Tax Deadline

Visit the Virginia Tax website for more information, or call the Virginia Tax Business Customer Service team at 804.367.8037.

Tax-Related Bills Submitted to the General Assembly

Fri, 17 Jan 2025 16:00:05 GMT

A total of 82 tax-related bills were submitted to the General Assembly during the pre-filing period for the 2025 session. We will catch you up on how these bills are faring as we go through the Session.

If there is one you are particularly interested in, you can visit the General Assembly website anytime and enter the bill number to track its progress.

Review the full list.

Tax Pros: What to know heading into filing season

Wed, 15 Jan 2025 16:04:14 GMT

In November, we released our 2024 Update for Tax Professionals presentation. As we approach the upcoming individual income tax filing season, watch this quick video for highlights of changes that impact Tax Year 2024 returns, and more.

In case you missed it, you can find the full 2024 presentation for tax professionals by clicking the button below.

View the full length presentation If you have additional questions, go to tax.virginia.gov or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

January events newsletter

Tue, 07 Jan 2025 16:04:01 GMT

Happy New Year! Make sure these Revolutionary events are on your calendar!

The Revolutionary Rumble

Your monthly guide to events commemorating Virginia's key role in the founding of our nation as we approach America's 250th birthday.

January Update

Blue Ridge PBS

Reflecting on an incredible 2024 with VA250! From celebrating Independence Day at the Capitol to honoring history at the Bray School dedication, we've explored Virginia's rich past together. Get ready for an even bigger 2025! We're commemorating pivotal moments like the Fincastle Resolutions on January 18th.

JANUARY 2-5

Richmond

Arnold's Raid on Richmond

In January, 1781, General Benedict Arnold led British troops in capturing the new capital of Virginia. This annual event returns, focused on the Revolution in Richmond and the 250th anniversary of the American Revolution. Four days of activities will take place at four different locations.

JANUARY 3

Henrico County

Arnold's Raid Encampment

Drop in throughout the day to experience life in a local Patriot militia encampment. What's a powder magazine and why does it need to be guarded? Learn about the local militia's defense as British troops fought their way through Henrico County into Richmond. Engage with reenactors as they demonstrate how to load and fire weapons.

JANUARY 3-5

Fredericksburg

Twelfth Night at Kenmore: A Dramatic Performance

Experience the candlelight, music, and decorations of a colonial Christmas … and the uncertainty of Revolution. In Twelfth Night at Kenmore, it is early January 1776 and the first Christmas that Fielding and Betty Washington Lewis will celebrate in their newly built home. In the 18th century, December 25 was just the start of Christmas, a twelve-day celebration that ended on Twelfth Night. This final night was the most festive of the holiday season, if not of the entire year! View dramatic scenes by costumed actors in the first-floor rooms of Kenmore with a special musical performance by Colonial Faire.

JANUARY 4

Henrico County
Arnold's Raid Encampment & Skirmish

Did you know Benedict Arnold led more than 1,000 British and Hessian troops through Henrico in January 1781? Travel back in time to visit a small Revolutionary War encampment of local militia to learn more about their uniforms, gear, and life of the common soldier. Hear about the Patriots’ struggle to defend Richmond.

JANUARY 11

Charles City County

Battle of Charles City Courthouse

A commemorative event honoring the historical significance of Charles City County in the American Revolution as part of the Virginia 250 Celebration. Featuring a portrayal of Benedict Arnold to provide historical context and narration to guide the program and a musical performance by the Charles City Elementary School Chorus.

Loudoun County

Eliza's True Story: The First Biography of President Monroe's Eldest Daughter

For over 200 years, Eliza Monroe has been portrayed as a hysterical and temperamental woman who abandoned her country and fled to France. The tale, however, did not ring true to author Barbara VornDick. She spent years researching Eliza, utilizing records on both continents. Her ground-breaking work shows Eliza in a new light and dispels many of the untruths that have been written about her. Barbara will discuss her new book about Eliza and the project to repatriate Eliza’s remains.

JANUARY 12

Gloucester County

The Lafayette Bicentennial & Gloucester County

Join Robert Kelly, Director of the Gloucester Museum of History & Vice President of the American Friends of Lafayette, for a discussion about General Lafayette's legacy that includes connections to Gloucester.

Henrico County

London Pleasants: From Enslaved to Redcoat

Follow the life of London Pleasants from enslavement to self-emancipation in Henrico County. Learn about his time as a Black Loyalist and fate after the American Revolution.

Isle of Wight County

Thanks! It Has Pockets!

The word pocket comes from a French word meaning pouch. A version of pouch-type pockets persisted for millennia until the 16th century when they were fashioned to wearer's girdles or belts. Today’s discussion by textile expert Renee Starling highlights women’s fashion history and the story of where we put our stuff.

JANUARY 15

Richmond

Who's Your Founding Father?: One Man’s Epic Quest to Uncover the First, True Declaration of Independence

In 1819 John Adams came across a stunning story in his hometown newspaper that he described to his political frenemy Thomas Jefferson as “one of the greatest curiosities and one of the deepest mysteries that ever occurred to me . . . entitled the Mecklenburg Declaration of Independence.” The story claimed that a full fourteen months before Jefferson crafted his own Declaration of Independence, a band of zealous Scots-Irish patriots, whiskey-loving Princeton scholars, and a fanatical frontier preacher in a remote corner of North Carolina had become the first Americans to formally declare themselves “free and independent” from England. The Mecklenburg Declaration was signed on May 20, 1775—a date that’s still featured on the state flag of North Carolina. A year later, in 1776, Jefferson is believed to have plagiarized the MecDec while composing his own, slightly more famous Declaration and then, as he was wont to do, covered the whole thing up. Which is exactly why Adams always insisted the MecDec needed to be “thoroughly investigated.” Now, with Who’s Your Founding Father?, David Fleming picks up where Adams left off, leaving no archive, no cemetery, no bizarre clue or wild character unexplored while traveling the globe to bring to life one of the most fantastic, important—and controversial—stories in American history.

JANUARY 16

Isle of Wight County

LUNCH & LEARN: 1781 Battle of Mackie’s Mill

This is the 244th anniversary of the Revolutionary War engagement between local patriot militia forces and British regular soldiers under Benedict Arnold along Cypress Creek. Join us as we present the story of this historic small battle portraying the bravery and determination of Isle of Wight County citizen-soldiers under the command of Smithfield’s own Colonel Josiah Parker.

JANUARY 18

Roanoke

Fincastle Resolutions 250th Anniversary

Virginia will commemorate the 250th anniversary of the Fincastle Resolutions, which marked the first time Americans declared that independence was a cause for which they were willing to give their lives, a sentiment famously echoed two months later by Patrick Henry. To honor this milestone, VA250 will host a special event titled "A Salute to Southwest Virginia" at the O. Winston Link & Roanoke History Museum. The event will feature a variety of exhibits and activities, including the launch of the VA250 Mobile Museum Experience.

Westmoreland County

Commemorating the Lives: The Lee Men of Stratford Hall Discounted Admission Day

Stratford Hall invites visitors to discover the Great House and grounds in commemoration of the lives of Lee family men, many of whom had January birthdays. During your visit, take the Band of Brothers audio tour to learn more about the Lee men and their time at Stratford Hall, including Declaration of Independence signers Francis Lightfoot Lee and Richard Henry Lee, Revolutionary War hero Henry “Light Horse Harry” Lee, and Confederate General Robert E. Lee.

JANUARY 19

Winchester

Battle of Cowpens Commemoration

The Ceremony to be held is in honor the Revolutionary War veterans who participated in the Battle of Cowpens and Daniel Morgan’s efforts during the Battle. It will be held at Daniel Morgan’s gravesite.

JANUARY 24

Chesterfield County

Chesterfield County and the Yorktown Campaign

As we prepare to celebrate the 250 th anniversary of the American Revolution, Bert Dunkerly will share how Chesterfield appeared in this historic and pivotal military event.

JANUARY 25

Henrico County

Heirloom Lost Arts & Crafts: Dancing into the Colonial Past

Put on your dancing slippers and dance your way back in time 250 years ago to a time of powdered wigs and lavishly trimmed waistcoats. Dancing was popular and common pastime of colonial Americans, which served recreational, social, and political purposes. You’ll learn the English country dances which were enjoyed by George Washington and Thomas Jefferson. No partner required.

Pittsylvania County

Pittsylvania County Committee of Safety 250th Anniversary CommemorationA special program commemorating the 250th anniversary of the formation of Pittsylvania County's Committee of Safety at the Old Callands Courthouse and Gaol on Sago Road in Callands. Join us as we commemorate this crucial step on the road to American independence and as we honor and remember the men who were elected to the committee that day.

Shenandoah County

Peter Muhlenberg CommemorationThis ceremony will held to honor of Peter Muhlenberg and his "a Time for War" sermon in front of the Shenandoah County Historical Society in Woodstock.

➡️ Looking Ahead

Patrick Henry’s Speech: 250th Anniversary

On March 23, 1775, at the Second Virginia Convention that took place in St. John’s Church in Richmond, Patrick Henry gave a rousing speech to the Virginia delegation that is credited with convincing the convention to pass a resolution delivering Virginia troops for the Revolutionary War. 250 years later, St. John’s Church is putting together a series of reenactments in the very same spot where this pivotal moment in American history. Click here to learn more and purchase tickets.

Virginia Tax Bulletin 24-7: Important Information Regarding Those Affected by Hurricane Helene

Mon, 07 Oct 2024 14:48:49 GMT

Extension of Due Dates for Individual Income Tax Returns and Payments for Victims of Hurricane Helene

Virginia will provide extensions and penalty and interest waivers for individual and fiduciary taxpayers who are unable to meet their income tax filing and payment obligations due to Hurricane Helene. This applies to returns and payments on or after September 25, 2024, but on or before May 1, 2025.

The relief applies to taxpayers located in the following localities:

City of Galax
Grayson County
Smyth County
Tazewell County
Washington County
Wise County
Wythe County

If additional localities are declared as disaster areas, they will also qualify for relief.

Impacted taxpayers do not need to take action. These extensions and waivers are automatic as long as the missing returns and payments are made by June 1, 2025.

Penalty and interest waivers for other state taxes

Impacted taxpayers that can demonstrate a hardship attributable to Hurricane Helene should submit a written request for penalty and interest waivers for any non-income taxes due on or after the disaster to the following address:

Virginia Department of Taxation
Customer Service Section Severe Storm Relief
P.O. Box 1115
Richmond, VA 23218-1115

For more information, please see Tax Bulletin 24-7.

View Tax Bulletin

If you have additional questions, go to tax.virginia.gov or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions

October is Cybersecurity Awareness Month

Tue, 01 Oct 2024 18:40:47 GMT

Don’t give scammers a treat - follow these tips to keep your information safe

Scammers often contact you by phone or email, over social media, or through the United States Postal Service. Then they pretend to be Virginia Tax, the IRS, or other government employees.

Remember: If you owe taxes to Virginia Tax, we will mail a bill to the address we have on file before contacting you another way. And we will never ask for personal information through insecure methods such text messages or social media.

Scammers will accuse you of violating tax laws, owing back taxes, or cheating on tax credits. Then they’ll pressure you to pay immediately, and by using a specific pay method such as a gift card, a prepaid debit card, or a wire transfer. They hope that by scaring you, you’ll reveal confidential information.

Remember: Virginia Tax will not demand payment without giving you an opportunity to ask questions or appeal.

Still not sure if it’s really us? Give us a call! Contact Us | Virginia Tax

Virginia's interest rates will remain the same for fourth quarter of 2024

Wed, 28 Aug 2024 17:07:06 GMT

Virginia's interest rates will remain the same for the fourth quarter of 2024. Federal rates remain unchanged. State and certain local interest rates are subject to change
every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621.

Federal rates for the fourth quarter of 2024 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the fourth quarter of 2024 will be 10% for tax underpayments (assessments) and 10% for tax overpayments (refunds).

Details about the interest rates for the fourth quarter of 2024 can be found in Tax Bulletin 24-6.

Tax Year 2021 PTET: Entities have until September 16 to File

Thu, 15 Aug 2024 18:22:50 GMT

Pass Through-Entities (PTEs) wanting to make a retroactive Pass-Through Entity Tax (PTET) election for Tax Year 2021 must do so on or before September 16, 2024.

Reminders about the Tax Year 2021 PTET

Entities must file the Tax Year 2021 PTET electronically using a business account on our website (iFile). If you don't already have an account, you can set up one here.
PTEs can make Tax Year 2021 PTET payments using the PTET-PMT eform or ACH credit.
PTEs must make a payment either before or at the time they file the Tax Year 2021 PTET.
There are no filing extensions or late filing options for the Tax Year 2021 PTET. Tax Year 2021 PTET returns will not be accepted after September 16, 2024, or without full payment of the Tax Year 2021 PTET.

More Information

Visit tax.virginia.gov/ptet for more information. For additional details, review our Retroactive Taxable Year 2021 Pass-through Entity Tax Guidelines (PDF).

2024 Legislative Summary Published

Mon, 01 Jul 2024 19:47:01 GMT

Now available on the Virginia Tax website: our 2024 Legislative Summary, an overview of state and local tax laws passed this year.

The Summary includes a general description of enacted legislation affecting:

State taxes administered by Virginia Tax, and
Local taxes for which Virginia Tax assists with administration, or on which Virginia Tax renders advisory assistance.

References to chapter numbers are to the corresponding chapters in the Acts of Assembly, which may be viewed at: https://lis.virginia.gov. Effective dates of the legislation vary and are set out in each description.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

The Summary is intended to provide a synopsis of enacted legislation and is for informational purposes only. The Summary is not a substitute for the actual state law, local ordinances, or tax related regulations.

View the Legislative Summary

If you have additional questions, please visit https://www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions or 804.367.8037 for business tax questions.

Virginia's interest rates will remain the same for second quarter of 2024

Tue, 26 Mar 2024 19:21:36 GMT

Virginia's interest rates will remain the same for the second quarter of 2024. Federal rates remain unchanged. State and certain local interest rates are subject to change
every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621.

Federal rates for the second quarter of 2024 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the second quarter of 2024 will be 10% for tax underpayments (assessments) and 10% for tax overpayments (refunds).

Details about the interest rates for the second quarter of 2024 can be found in Tax Bulletin 24-1.

View the Tax Bulletin

Entities can now file the Tax Year 2021 PTET

Mon, 04 Mar 2024 20:11:29 GMT

Entities can now file the Tax Year

2021 PTET

Electing Pass-Through Entities (PTEs) can now file and pay their Tax Year 2021 Pass- Through Entity Tax (PTET) return through the electronic filing option (free fillable form) available on our online application for businesses. Tax Year 2021 returns must be filed using this option. If the PTE doesn’t already have an online business account with us, they’ll need to register for one on our website to file. Tax Year 2021 PTET returns are due September 16, 2024.

As a reminder, the PTET return (502PTET) must be filed electronically, and there is no waiver from the electronic filing requirement. Entities can also make PTET payments using the PTET-PMT eform or ACH credit. The Tax Year 2021 PTET return will not be accepted without full payment of the 2021 PTET. See the Tax Year 2021 PTET Guidelines for more information.

Tax Year 2023 PTET update

Entities can now file the Tax Year 2023 PTET using approved tax preparation software. Our electronic filing option (free fillable form) will be available this spring.

Schedule VK-1 reminder

If an entity is completing a Schedule VK-1, please ensure it correctly identifies the owners that will be claiming the PTET credit. For example, if a PTET credit is passed to a grantor trust and the grantor is eligible to claim the PTET credit on their individual return, specify on the Schedule VK-1 the grantor’s name, social security number, and whether the entity type is a resident or nonresident.

More information

PTET filing and payment requirements vary depending on the tax year. Please continue to monitor the Virginia Elective Pass-Through Entity Tax page of our website for additional updates.

Virginia Employer/Payer 2023 Withholding Tax Deadline is Jan. 31, 2024

Wed, 24 Jan 2024 23:08:10 GMT

Wednesday, Jan. 31, 2024, is the due date for submitting 2023 withholding records, including W-2 and 1099 forms. Issuers of 1099 documents can find specifications in our W-2/1099 guide for web upload.

Filing Options

There are two free online filing options available to help you submit withholding records electronically:

eForms, a fast and free way to file and pay state taxes online; and
Web Upload, which allows you to file and pay employer withholding and income tax statements.

The authentication process (for both eForms and Web Upload) works the same way for W-2Cs and W-2s, so taxpayers should be prepared to enter requested withholding info to be authenticated.

More information about the Withholding Tax Deadline

Visit the Virginia Tax website for more information, or call the Virginia Tax Business Customer Service team at 804.367.8037.

Important update about the Pass-Through Entity Tax (PTET)

Mon, 18 Dec 2023 17:20:50 GMT

A free electronic filing option is now available on our website for electing Pass-Through Entities (PTEs) filing Tax Year 2022 PTET returns.

As a reminder, the filing extension deadline for calendar year filers was October 16, 2023. Provided that entities have paid in full by their original due date (April 17, 2023 for calendar year filers), we’ll waive the $100 minimum late filing penalty for those who use this free online filing option by February 1, 2024.

File Tax Year 2022 PTET

Entities will be prompted to register for an online business account (iFile) to use this filing option (if they don’t already have one). Tax preparers can register, create a unique ID number, and give this number to their PTE clients so the clients can set the preparer up as a user in the account.

PTET payments

Regardless of when an entity files, we encourage them to pay in full by their original due date to avoid penalties and interest. If the entity has not paid in full by their original due date, we encourage them to pay in full as soon as possible to reduce any additional penalties or interest. Payments must be made using the PTET-PMT eform or ACH credit.

For additional details about Tax Year 2022 PTET returns, see Tax-Bulletin 23-8.

More information about PTET

During the 2022 Session, the Virginia General Assembly passed legislation that established a PTET. The PTET return (Form 502PTET) must be filed electronically, and there is no waiver from the electronic filing requirement. PTET filing and payment requirements vary depending on the tax year. Please continue to monitor the Virginia Elective Pass-Through Entity Tax page of our website for updates regarding other tax years.

Important updates and reminders about the new Pass-Through Entity Tax (PTET)

Thu, 30 Nov 2023 15:22:40 GMT

During the 2022 Session, the Virginia General Assembly passed legislation that established a Pass-Through Entity Tax (PTET).

The PTET return (Form 502PTET) must be filed electronically, and there is no waiver from the electronic filing requirement.

PTET filing and payment requirements vary depending on the tax year. Please review the information below for details and continue to monitor the Virginia Elective Pass-Through Entity Tax page of our website for additional updates.

Tax Year 2023 Filers

Beginning with tax year 2023, electing PTEs are required to make estimated payments, typically on a quarterly basis.
Electing PTEs can use our PTET-PMT eform or ACH credit to make the required payment.

Tax Year 2022 Filers

The filing extension deadline for calendar year filers is October 16, 2023.
Starting in December 2023, we’ll have a new, free electronic filing option available through our online application for businesses. Provided that entities have paid in full by their original due date (April 17, 2023 for calendar year filers), we’ll waive the $100 minimum late filing penalty for those who use this free online filing option by February 1, 2024.
Regardless of when an entity files, we encourage them to pay in full using the PTET-PMT eform or ACH credit as soon as possible to avoid additional penalties and interest.
For more information, see Tax-Bulletin 23-8.

Tax Year 2021 Filers

If they wish to do so, PTEs can now make Tax Year 2021 PTET payments using the PTET-PMT eform or ACH credit. Any Tax Year 2021 PTET payment made by a PTE will be considered a valid and binding election for Tax Year 2021. However, please note that electing PTEs are not required to pay their Tax Year 2021 PTET now and can wait to pay until they file their Tax Year 2021 PTET return.

Virginia Interest Rates Remain the Same for First Quarter of 2024

Thu, 30 Nov 2023 15:21:41 GMT

Virginia's interest rates will remain the same for the first quarter of 2024. Federal rates remain unchanged. State and certain local interest rates are subject to change
every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621.

Federal rates for the first quarter of 2024 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the first quarter of 2024 will be 10% for tax underpayments (assessments) and 10% for tax overpayments (refunds).

Details about the interest rates for the first quarter of 2024 can be found in Tax Bulletin 23-9.

Virginia Tax Bulletin 23-8: Minimum $100 Late Filing Penalty Waiver for Certain Taxable Year 2022 Virginia PTET Returns Filed by Feb. 1, 2024

(Past member) — Wed, 04 Oct 2023 15:26:45 GMT

As some pass-through entities (“PTEs”) are waiting for a free online filing option to file their Taxable Year 2022 pass-through entity tax (“PTET”) returns, Virginia Tax is granting a waiver of the minimum $100 Late Filing Penalty that would otherwise apply to a late-filed PTET return, so long as PTEs comply with the requirements as outlined in the bulletin. The relevant payment deadlines will remain the same.

View the tax bulletin.

VTAX 2023 Legislative Summary Updated

(Past member) — Fri, 15 Sep 2023 19:20:41 GMT

VTAX updated the 2023 Legislative Summary to reflect the reconvened General Assembly session on April 12 and Special Session I on September 6. Any legislation included after Special Session I is not included.

The following became effective on September 14, 2023:

Clarification regarding Virginia's Conformity to the IRC
2023 Individual Income Tax Rebate Fund
Reinstatement of the combined Sales and Use Tax Holiday
Real Property Tax: Data Centers (Amendments to the 2023 Appropriation Act)

References to chapter numbers are to the corresponding chapters in the Acts of Assembly, which may be viewed at: https://lis.virginia.gov.

Virginia Tax Bulletin 23-7: Important Information About Virginia's Interest Rates

(Past member) — Fri, 08 Sep 2023 16:21:12 GMT

Virginia's interest rates will change for the fourth quarter of 2023.The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the fourth quarter of 2023 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the fourth quarter of 2023 will be 10% for tax underpayments (assessments) and 10% for tax overpayments (refunds).

Details about the interest rates for the fourth quarter of 2023 can be found in Tax Bulletin 23-7.

Virginia Tax Bulletin 23-6: Important Information About Virginia's Interest Rates

(Past member) — Thu, 15 Jun 2023 15:47:19 GMT

Virginia Interest Rates Remain the Same for Third Quarter

Federal Rates Remain Unchanged: State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621. IRC § 6621 dictates that the federal underpayment and overpayment rates are three percentage points higher than the federal short-term rate. Federal rates for the third quarter of 2023 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds) by noncorporate taxpayers.

Virginia Code § 58.1-15 provides that the underpayment rate for Virginia taxes will be 2%
higher than the corresponding federal rate and the overpayment rate for Virginia taxes will be 2% higher than the federal overpayment rate for noncorporate taxpayers. Accordingly, the Virginia rates for the third quarter of 2023 will be 9% for tax underpayments (assessments) and 9% for tax overpayments (refunds).

Details about the interest rates for the third quarter of 2023 can be found in Tax Bulletin 23-6

VTAX 2023 Legislative Summary Now Available

(Past member) — Thu, 01 Jun 2023 16:29:44 GMT

Virginia Department of Taxation

The 2023 Legislative Summary is now available.

The Legislative Summary is published by Virginia Tax as a convenient reference guide to state and local tax legislation enacted by the 2023 Session of the General Assembly.

The Summary includes a general description of enacted legislation affecting:

State taxes administered by Virginia Tax, and
Local taxes for which Virginia Tax assists with administration, or on which Virginia Tax renders advisory assistance.

References to chapter numbers are to the corresponding chapters in the Acts of Assembly, which may be viewed at: https://lis.virginia.gov. Effective dates of the legislation vary and are set out in each description.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

Virginia Tax Bulletin 23-5: Local Transient Occupancy Tax Rates

(Past member) — Thu, 25 May 2023 12:32:01 GMT

Effective July 1, 2023, House Bill 1442 (2023 Acts of Assembly, Chapter 410) requires Virginia Tax to annually publish on its website the current rate of the local transient occupancy tax of each county, city, and town. The tax-assessing officer of each locality must send this information to Virginia Tax as soon as the current rate is available after a request by Virginia Tax, or with at least 30 days’ notice prior to the effective date of any change in the rate.

Details about the local occupancy tax rates can be found in Tax Bulletin 23-5

Changes to Virginia's Pass-Through Entity Tax

Fri, 31 Mar 2023 00:04:08 GMT

Replacement of the Qualifying PTE Requirement with an Eligible Owner Requirement

Under legislation enacted by the 2023 General Assembly, changes were made to Virginia’s Pass-Through Entity Tax (PTET) that relaxed the requirements to qualify for the PTET election and altered how the PTET is calculated. This bulletin provides guidance on how to reconcile this legislation with 2022 Virginia PTET returns.

Details about the changes can be found in Tax Bulletin 23-3the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Important New Information: 2022 Virginia Form 502PTET

Wed, 01 Feb 2023 21:15:14 GMT

For taxable years beginning on and after January 1, 2021, but before January 1, 2026, the Virginia General Assembly has established a new elective pass-through entity (PTE) tax. Form 502PTET will allow qualifying pass-through entities to pay Virginia tax at a rate of 5.75% on behalf of their owners at the pass-through entity level rather than the owners paying the tax at the individual level, consequently avoiding the state and local tax cap on Schedule A of Form 1040. The elective income tax and corresponding refundable credit allow the qualifying PTE to shift the income tax burden from the PTE owners to the PTE itself.

Form 502PTET will be available in Drake Tax in late spring. Drake Software is asking that you plan accordingly.

Important Notes

Entities that do not elect the PTET must file Form 502.
Each electing PTE must obtain consent from its owners. The election is binding on all the owners once the election is made. An owner does not have the option to opt out of an entity’s election.
A qualifying pass-through entity’s taxable income must be adjusted to eliminate any federal deduction for state and local income taxes.
Due to the timing of this legislation, implementation of the Taxable Year 2021 PTE elective tax will occur on or after October 15, 2023, following separate guidance and procedures scheduled to be released prior to October 15, 2023.
For taxable years beginning on or after January 1, 2022, but before January 1, 2026, a qualifying PTE may make an annual election on a timely-filed Form 502PTET.
Form 502PTET automatically qualifies for a 6-month extension.
Form 502PTET and all corresponding schedules must be filed electronically. No paper submissions will be accepted.
Payments must be made electronically by the filing deadline of April 17, 2023, for calendar year entities. Payments are processed at:
www.business.tax.virginia.gov/tax-eforms/ptetpmt.php

Additional resources:

Virginia Tax Bulletin 22-12

Thu, 01 Dec 2022 19:40:39 GMT

Reduced Retail Sales and Use Tax Rate on Food Purchased for Home Consumption and Essential Personal Hygiene Products

Effective January 1, 2023, groceries (food purchased for home consumption and essential personal hygiene products) will be taxed at a reduced 1% rate.

Background

Under prior law, groceries were subject to a reduced 1.5% state sales tax rate and 1% local option sales tax rate for a total rate of 2.5%. With this change, they'll remain subject to the 1% local option retail sales and use tax, and will continue to be exempt from all regional and additional local tax rates.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Gig Economy Work and Your Virginia Taxes

Mon, 21 Nov 2022 19:55:30 GMT

Is gig work taxable?

Even if it’s part-time, temporary, or side work, the income you earn through an app or website for services like making deliveries, selling goods online, or driving for hire is typically taxable.

Employee versus independent contractor

If you are an employee, your employer should withhold Virginia income tax from your paycheck and submit that portion of your wages to us on your behalf. Or, if you’re an independent contractor, you may have to make estimated payments of income tax, typically on a quarterly basis. Either way, you’re required to report this income to us when filing your taxes.

Why am I receiving a Form 1099-K?

If you’ve received $600 or more in the previous calendar year from your gig work, you may receive a Form 1099-K from a third-party settlement organization (TPSO).

Form 1099-K reports the payment transactions those organizations process for platforms like electronic marketplaces, peer-to-peer payment companies, and other similar businesses. Please note, a payment reported on Form 1099-K is presumed to be taxable income, unless a specific exemption applies. Descriptions like the note attached to a service payment on a peer-to-peer app, for example, do not determine the taxability of that income. Please also note that income from gig work is generally taxable regardless of whether you received a Form 1099-K from a TPSO.

Virginia Tax Bulletin 22-11: Important Information About Virginia's Interest Rates

Thu, 25 Aug 2022 19:19:33 GMT

Virginia Interest Rates Change for the Fourth Quarter

Virginia's interest rates will change for the fourth quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the fourth quarter of 2022 will be 6% for tax underpayments (assessments) and 6% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the fourth quarter of 2022 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 22-11.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

2022 Legislative Summary Now Available

Mon, 11 Jul 2022 15:31:44 GMT

2022 Legislative Summary Published

The 2022 Legislative Summary is now available.

The Legislative Summary is published by Virginia Tax as a convenient reference guide to state and local tax legislation enacted by the 2022 Session of the General Assembly.

The Summary includes a general description of enacted legislation affecting:

State taxes administered by Virginia Tax, and
Local taxes for which Virginia Tax assists with administration, or on which Virginia Tax renders advisory assistance.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

View the Legislative Summary

If you have additional questions, please visit https://www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions or 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-10: Elimination of Accelerated Sales Tax Payment Requirement

Wed, 22 Jun 2022 19:57:06 GMT

The requirement that certain Retail Sales and Use Tax dealers make an Accelerated Sales Tax (AST) payment has been eliminated for periods beginning after June 30, 2021.

No AST payment is due in June 2022.

More information can be found in Tax Bulletin 22-10 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-9: Virginia Disposable Plastic Bag Tax Effective in Loudoun County July 1, 2022

Wed, 01 Jun 2022 15:53:55 GMT

Virginia Disposable Plastic Bag Tax effective in Loudoun County July 1, 2022

Loudoun County has adopted the Virginia Disposable Plastic Bag Tax effective July 1, 2022. Loudoun County will join the localities listed below that currently impose a disposable plastic bag tax:

• Alexandria City
• Falls Church City
• Fredericksburg City
• Roanoke City
• Arlington County
• Fairfax County

Legislation enacted by the 2020 General Assembly (House Bill 534 (2020 Acts of Assembly, Chapter 1022) and Senate Bill 11 (2020 Acts of Assembly, Chapter 1023)) authorizes any county or city to adopt by ordinance the Virginia Disposable Plastic Bag Tax on disposable plastic bags provided to customers in grocery stores, convenience stores, and drugstores in the locality.

More information can be found in Tax Bulletin 22-9 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-8: Important Information About Virginia's Interest Rates

Tue, 31 May 2022 20:08:36 GMT

Virginia Interest Rates Change for the Third Quarter

Virginia's interest rates will change for the third quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the third quarter of 2022 are 5% for tax underpayments and 5% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the third quarter of 2022 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 22-8 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-7: Additional Sales and Use Tax in City of Danville

Fri, 22 Apr 2022 15:06:48 GMT

Effective July 1, 2022, a new one percent additional retail sales and use tax will be levied in the City of Danville (the “additional local tax”). The sales and use tax levied in the City
of Danville will total 6.3%, comprised of the 4.3% state tax, the 1% local option tax, and the 1% additional local tax.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-6: Important Information Regarding 2021 Virginia Income Tax Returns - Virginia's New Elective Pass-Through Entity Tax

Fri, 15 Apr 2022 15:41:07 GMT

Under legislation enacted by the 2022 General Assembly, Virginia established a new elective pass-through entity (“PTE”) tax. This bulletin provides taxpayers with preliminary guidance regarding this new elective tax and Taxable Year 2021 Virginia income tax returns.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-5: Expiration of the Virginia Retail Sales and Use Tax Exemption for Personal Protective Equipment

Wed, 23 Mar 2022 19:30:39 GMT

Effective March 24, 2022, the temporary Retail Sales and Use Tax exemption for qualifying business purchases of Personal Protective Equipment (PPE) related to COVID-19 will expire.

Purchases that were eligible for the exemption and were purchased on or before March 23, 2022 continue to be exempt. However, any purchases made after March 23, 2022 are not eligible for the PPE exemption.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-4: New class of personal property for certain types of vehicles

Wed, 23 Mar 2022 16:24:19 GMT

Effective March 22, 2022, House Bill 1239 (Chapter 30, 2022 Acts of Assembly) creates a new class of tangible personal property for local personal property tax purposes. This new class includes the following types of vehicles:

Automobiles as described in Va. Code 58.1-3503(A)(3);
Passenger trucks as described in Va. Code 58.1-3503(A)(4)-(5);
Motor vehicles with specially designed equipment for use by the handicapped as
described in Va. Code 58.1-3503(A)(9); and
Motorcycles, mopeds, all-terrain vehicles, and off-road motorcycles, campers, and other recreational vehicles as described in Va. Code 58.1-3503(A)(10).

Localities now have the option to assign a tax rate to this class that's different from the rate applicable to the general class of tangible personal property. This legislation is applicable to taxable years beginning on or after January 1, 2022, but before January 1, 2025.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-3: Important Information About Virginia's Interest Rates

Mon, 07 Mar 2022 12:41:13 GMT

Virginia Interest Rates Change for the Second Quarter

Virginia's interest rates will change for the second quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the second quarter of 2022 are 4% for tax underpayments and 4% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the second quarter of 2022 will be 6% for tax underpayments (assessments) and 6% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 22-3 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-2: Virginia Disposable Bag Tax Enacted in the City of Falls Church Effective April 1, 2022

Thu, 03 Mar 2022 19:06:20 GMT

The City of Falls Church has adopted the Virginia Disposable Plastic Bag Tax effective April 1, 2022.

Falls Church joins the following localities that currently impose a disposable plastic bag tax:

Alexandria City
Fredericksburg City
Roanoke City
Arlington County
Fairfax County

View the Tax Bulletin

For more information on the disposable plastic bag tax, see our website. If you have additional questions, contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 22-1: Important Information Regarding 2021 Virginia Income Tax Returns

Wed, 23 Feb 2022 21:50:10 GMT

Important Information Regarding 2021 Virginia Income Tax Returns: Virginia's Conformity to the Internal Revenue Code Advanced to Dec. 31, 2021

Under legislation enacted by the 2022 General Assembly, Virginia’s date of conformity to the Internal Revenue Code will advance from December 31, 2020 to December 31, 2021. This allows Virginia to generally conform to the American Rescue Plan Act of 2021 (ARPA) and provides additional benefits to recipients of certain COVID-19 business assistance programs during Tax Years 2021 and 2019. No changes have been made to the Virginia income tax treatment for recipients of COVID-19 business assistance for Tax Year 2020.

Tax Bulletin 22-1 provides more information and explains the conformity adjustments that may be necessary as a result of this legislation.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Form 1099-G Error Affecting Taxpayers in the Virginia Beach Area

Mon, 31 Jan 2022 18:03:00 GMT

Important 1099-G Update For Taxpayers in the Virginia Beach Area

We are addressing a reported issue affecting printed 1099-Gs for a number of taxpayers in the Virginia Beach area. We take protection of taxpayer information very seriously, and have thoroughly investigated this matter with the vendor and identified the specific taxpayers affected. Fortunately, any personal account information on the Form 1099-G is redacted, so the information of those taxpayers affected remains safe and secured.

We are contacting each affected taxpayer to explain the situation and confirm they will receive a corrected 1099-G.

In addition, taxpayers can always access correct Form 1099-G information online using our 1099-G Lookup Tool.

We deeply regret this error and apologize for any inconvenience. For more information, please see the Virginia Tax website.

Questions?

As always, you can contact our call center at 804.367.8031 with any questions. Agents are available Monday – Friday 8:30am-5pm.

2021 Withholding Records Due Monday, January 31, 2022

Thu, 13 Jan 2022 17:32:42 GMT

It's time to file!

Monday, Jan. 31, 2022 is the due date for businesses to submit their 2021 withholding records, including W-2 and 1099 forms.

There are 2 free, online filing options:

Web Upload: a file-based system that accepts multiple file types, including those created by most payroll software; and
eForms: fillable electronic forms with no signup required (best if you have a small number of employees).

Important: Late submissions can cause significantly delayed refunds for your employees, retirees, and customers.

Changes this year

Do you issue 1099s? The IRS has added 2 new payment fields (fields 17 and 18) to the 1099 form. As a result, the position of several existing fields will change on Forms 1099R, 1099 MISC, 1099 NEC, and 1099K. We're following the IRS format, so make sure to send us your files using the updated federal specifications (which you can find in our W2/1099 Guide for Web Upload).
Do you need to correct a W-2? Starting this year, we’ll accept corrected W-2s (or “W-2Cs”) for Tax Year 2021 and beyond electronically. Use Form W-2C to update or change wage or withholding data. For Tax Year 2020 and prior years, payroll providers and employers will need to submit written copies of updated W-2s.

Questions?

For more information on filing options and requirements, see the Withholding Tax page on our website. If you have additional questions, contact Virginia Tax Business Customer Service at 804.367.8037.

Important 1099 Forms Update

Mon, 20 Dec 2021 21:32:38 GMT

Important 1099 Forms Update

IRS change impacts formatting of Forms 1099R, 1099 MISC, 1099 NEC, and 1099K

The IRS has added 2 new payment fields (fields 17 and 18) to the 1099 form. As a result, the position of several existing fields will change on the following forms:

1099R
1099 MISC
1099 NEC
1099K

We're following the IRS format, so please make sure to send us your files using the updated federal specifications (which you can find in our W2/1099 Guide for Web Upload). This change is retroactive, so if you are sending prior-year 1099s, you must use the new federal format.

Questions?

For more information on filing options and requirements, see the Withholding Tax page on our website. If you have additional questions, contact us at 804.367.8037.

Virginia Tax Bulletin 21-10: Important Information About Virginia's Interest Rates

Fri, 03 Dec 2021 14:07:38 GMT

Virginia Interest Rates Stay the Same

Virginia's interest rates will stay the same for the first quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the first quarter of 2022 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the first quarter of 2022 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 21-10 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 21-9: Virginia Disposable Plastic Bag Tax

Tue, 09 Nov 2021 17:07:25 GMT

Virginia Disposable Plastic Bag Tax effective January 1, 2022

The tax will be administered by Virginia Tax, which issued Guidelines for the Disposable Plastic Bag Tax on September 1, 2021. As explained in the guidelines, Virginia Tax will be responsible for administering the tax, including auditing and collecting the tax.

The following localities have adopted the Virginia Disposable Plastic Bag Tax effective January 1, 2022:

Alexandria City
Fredericksburg City
Roanoke City
Arlington County
Fairfax County

More information can be found in Tax Bulletin 21-9 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Guidelines: Classification of Workers

Fri, 01 Oct 2021 18:05:54 GMT

Guidelines for the Classification of Workers: Independent Contractor vs. Employee

During the 2020 Session, the Virginia General Assembly enacted House Bill 1407 (2020
Acts of Assembly, Chapter 681) and Senate Bill 744 (2020 Acts of Assembly, Chapter
682), which sets forth the Virginia standard for classifying workers performing services
for remuneration as employees or independent contractors. In addition, this legislation
imposes civil penalties on employers that fail to properly classify an individual as an
employee.

The Guidelines are available in the Guidance Documents section of the Virginia Tax website. For additional information or questions, email us at misclassificationofworkers@tax.virginia.gov.

View the Tax Guidelines

Virginia Tax Bulletin 21-8: Important Information About Virginia's Interest Rates

Thu, 02 Sep 2021 20:52:56 GMT

Virginia Interest Rates Stay the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the fourth quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the fourth quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the fourth quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 21-8 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Guidelines: Guidelines for the Virginia Disposable Plastic Bag Tax

Wed, 01 Sep 2021 17:52:43 GMT

Guidelines for the Virginia Disposable Plastic Bag Tax

Legislation enacted during the Regular Session of the 2020 General Assembly (House Bill 534 (2020 Acts of Assembly, Chapter 1022) and Senate Bill 11 (2020 Acts of Assembly, Chapter 1023) authorizes any county or city to adopt by ordinance the Virginia Disposable Plastic Bag Tax on disposable plastic bags provided to customers in grocery stores, convenience stores, and drugstores in the locality. The tax will be administered by Virginia Tax. A locality must provide a certified copy of the ordinance to the Tax Commissioner at least 3 months prior to the date the tax is to become effective.

Any county or city may impose the Virginia Disposable Plastic Bag Tax in the amount of 5 cents on each disposable plastic bag provided to purchasers by any grocery store, convenience store, or drugstore in the locality. The tax is due regardless of whether the retailer sells the bag to the customer or it is provided free of charge.

The Guidelines are available in the Guidance Documents section of the Virginia Tax website. For additional information or questions, contact the Virginia Tax Business Customer Service line at 804.367.8037.

View the Tax Guidelines

Virginia Tax Guidelines: Application of Retail Sales and Use Tax to Sales of Accommodations Facilitated by Accommodations Intermediaries

Tue, 27 Jul 2021 15:20:46 GMT

Guidelines for the Application of the Retail Sales and Use Tax to Sales of Accommodations Facilitated by Accommodations Intermediaries

Effective September 1, 2021, Senate Bill 1398 (2021 Acts of Assembly, Special Session I, Chapter 383) changes the application of the Retail Sales and Use Tax to sales of accommodations facilitated by accommodations intermediaries. The legislation makes similar changes to the local transient occupancy tax. Additionally, these changes will apply to the state imposed transient occupancy taxes that fund transportation purposes in certain localities under Va. Code § 58.1-1743 and Va. Code § 58.1-1744 because these taxes are administered by local governments in the same manner as their local transient occupancy taxes. Virginia Tax has issued guidelines to provide processes and procedures for implementing the provisions of Va. Code §§ 58.1-602, 58.1-603, and 58.1-612.2, relating to the Retail Sales and Use Taxation of accommodations, as required by Senate Bill 1398.

View the Tax Guidelines

2021 Legislative Summary Now Available

Wed, 23 Jun 2021 18:43:03 GMT

2021 Legislative Summary Published

The 2021 Legislative Summary is now available.

The Legislative Summary is published by Virginia Tax as a convenient reference guide to state and local tax legislation enacted by the 2021 Session of the General Assembly.

The Summary includes a general description of enacted legislation affecting:

State taxes administered by Virginia Tax, and
Local taxes for which Virginia Tax assists with administration, or on which Virginia Tax renders advisory assistance.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

View the Legislative Summary

If you have additional questions, please visit https://www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions or 804.367.8037 for business tax questions.

Virginia Tax Bulletin 21-7: Important Information About Virginia's Interest Rates

Wed, 16 Jun 2021 15:47:21 GMT

Virginia Interest Rates Stay the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the third quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the third quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the third quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 21-7 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia's New Electronic Payment Requirement for Some Individual Income Taxpayers

Fri, 14 May 2021 13:21:24 GMT

Virginia's New Electronic Payment Requirement for Some Individual Income Taxpayers

Following an amendment to legislation approved by the Virginia General Assembly, some taxpayers may now be affected by a new requirement for certain tax payments.

Effective for taxable years beginning on or after Jan. 1, 2021, taxpayers who make estimated tax payments must submit all of their income tax payments electronically if:

Any estimated tax payment exceeds $2,500; or
Any extension payment exceeds $2,500; or
The total estimated income tax due in any taxable year exceeds $10,000.Taxpayers should refer to the estimated income tax instructions for details about how to compute the total estimated tax due.

This applies to all payments made on or after July 1, 2021, and includes all payments for estimated taxes, extension payments and any other amounts due when a taxpayer files a return.

Visit the Virginia Tax website for more information on individual income tax payment options.

If you have questions, please call Virginia Tax Customer Service at 804.367.8031.

Virginia Tax Bulletin 21-6: Additional Retail Sales and Use Tax in Charlotte, Gloucester, Northampton and Patrick Counties

Mon, 03 May 2021 14:18:52 GMT

Additional Retail Sales and Use Tax in Charlotte, Gloucester, Northampton and Patrick Counties in Virginia

Virginia Tax is announcing that effective July 1, 2021, a new 1% additional retail sales and use tax will be levied in Charlotte, Gloucester, Northampton, and Patrick counties in Virginia. The sales and use tax levied will total 6.3%, comprised of the 4.3% state tax, the 1% percent local option tax, and the 1% additional local tax.

Sales made on or after July 1, 2021 will be subject to the new tax rate. Items delivered to a purchaser and paid for on or after July 1, 2021 will be taxed at the 6.3% rate, regardless of when the property was ordered. The increased rate will not apply to property delivered prior to July 1, 2021, but paid for on or after July 1, 2021. Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to July 1, 2021, even though delivery may occur on or after July 1, 2021, or the paid-in-full lease payment covers a lease period beginning on or after July 1, 2021.

The rate of tax on food purchased for home consumption and qualifying essential personal hygiene products is unaffected by the law change and will remain at the current 2.5% (1.5% state and 1% local) rate statewide.

More information can be found in Tax Bulletin 21-6 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8037 for business tax questions.

Virginia Tax Bulletin 21-5: Important Information Regarding Certain Filing and Payment Deadlines in Virginia

Fri, 09 Apr 2021 17:36:52 GMT

Important Information Regarding Certain Filing and Payment Deadlines in Virginia: New Individual Income Tax Filing and Payment Deadline

Individual income tax returns and payments required to be made with such returns for Taxable Year 2020 that were originally due May 1, 2021, are now due on or before May 17, 2021. As a result, no penalties will apply so long as a return is filed and full payment is made by May 17, 2021. In addition, pursuant to Virginia Tax's authority to waive the accrual of interest during a declared state of emergency in the commonwealth, no interest will apply so long as a return is filed and full payment is made by May 17, 2021.

The new filing and payment deadline for certain Taxable 2020 returns applies to composite returns filed on behalf of nonresident owners. However, all other Virginia tax payment, withholding, and filing deadlines remain the same, including the requirement for calendar year filers to make their first estimated payments for Taxable Year 2021 by May 3, 2021.

More information can be found in Tax Bulletin 21-5 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Guidelines: Guidelines for the Retail Sales and Use Tax Exemption for Personal Protective Equipment

Mon, 22 Mar 2021 14:40:17 GMT

Effective March 11, 2021, Virginia House Bill 2185 and Senate Bill 1403 amend the Code of Virginia to add Va. Code § 58.1-609.14, providing a temporary exemption from the Retail Sales and Use Tax for qualifying purchases of personal protective equipment (PPE).

The exemption is only valid for qualifying purchases of PPE made on or after March 11, 2021, and prior to the expiration of the last executive order issued by Governor Northam related to the COVID-19 pandemic and the termination of the COVID-19 Emergency Temporary Standard and any permanent COVID-19 regulations adopted by the Virginia Safety and Health Codes Board. No refunds will be provided regarding purchases made prior to March 11, 2021, or after the expiration of the exemption.

Guidelines for the Retail Sales and Use Tax Exemption for PPE have been published to the Virginia Tax website. For additional information or questions, contact the Virginia Tax Business Customer Service hotline at 804-367-8037.

View the Tax Guidelines

Virginia Tax Bulletin 21-4: Important Information Regarding 2020 Virginia Income Tax Returns

Mon, 15 Mar 2021 20:51:50 GMT

Important Information Regarding 2020 Virginia Income Tax Returns: Virginia's Conformity to the Internal Revenue Code Advanced to Dec. 31, 2020

Under emergency legislation enacted by the 2021 General Assembly, Virginia's date of conformity to the terms of the Internal Revenue Code advances from Dec. 31, 2019, to Dec. 31, 2020. This allows Virginia to generally conform to the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Consolidated Appropriations Act (CAA).

However, it specifically deconforms from three provisions of the CARES Act that temporarily change limitations applicable to the net operating loss deduction, excess business losses and the business interest deduction. This legislation also deconforms from the provision of the CAA that permanently reduces the medical expense deduction threshold.

The legislation conforms to the federal tax exemption for Paycheck Protection Program (PPP) loan forgiveness and certain funding received under the Economic Injury Disaster Loan (EIDL) program. However, it partially deconforms from the provision of the CAA that allows taxpayers to claim a federal deduction for business expenses funded by forgiven PPP loan proceeds. Instead, the bill permits a deduction for Taxable Year 2020 of up to $100,000 for business expenses funded by forgiven PPP loan proceeds. In addition, the legislation fully deconforms from the provision of the CAA that allows taxpayers to claim a federal deduction for business expenses funded by certain EIDL funding proceeds.

The legislation also provides an individual and corporate income tax subtraction for Taxable Year 2020 for up to $100,000 of all grant funds received by a taxpayer under the Rebuild Virginia program.

Tax Bulletin 21-4 explains the conformity adjustments that may be necessary as a result of this legislation.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 21-3: Important Information About Virginia's Interest Rates

Mon, 08 Mar 2021 21:31:52 GMT

Virginia Interest Rates Stay the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the second quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the second quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the second quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 21-3 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 21-2: Additional Sales and Use Tax in Henry County, Virginia

Thu, 25 Feb 2021 13:36:29 GMT

Additional Sales and Use Tax in Henry County, Virginia

Virginia Tax is announcing that effective April 1, 2021, a new 1% additional retail sales and use tax will be levied in Henry County, Virginia. The sales and use tax levied will total 6.3%, comprised of the 4.3% state tax, the 1% percent local option tax and the 1% Henry County additional tax.

Sales made on or after April 1, 2021 will be subject to the new tax rate. Items delivered to a purchaser and paid for on or after April 1, 2021 will be taxed at the 6.3% rate, regardless of when the property was ordered. The increased rate will not apply to property delivered prior to April 1, 2021, but paid for on or after April 1, 2021. Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to April 1, 2021, even though delivery may occur on or after April 1, 2021, or the paid-in-full lease payment covers a lease period beginning on or after April 1, 2021.

More information can be found in Tax Bulletin 21-2 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8037 for business tax questions.

Virginia Tax Bulletin 21-1: Important Information Regarding Virginia's Litter Tax

Thu, 07 Jan 2021 16:23:41 GMT

Important Information Regarding Virginia's Litter Tax: Increased Litter Tax Rate and Additional Penalty

Virginia Tax is notifying taxpayers of changes to the Virginia Litter Tax effective for returns due May 1, 2021.

The Virginia Litter Tax is imposed annually on each establishment from which business is conducted by certain manufacturers, wholesalers, distributors and retailers.

Previously, such tax applied at an annual rate of $10 per establishment. Effective for Litter Tax returns due May 1, 2021, this annual rate increases to $20 per establishment.

An additional litter tax on each establishment is imposed on manufacturers, wholesalers, distributors, and retailers of groceries, soft drinks, carbonated waters, beer and other malt beverages. Under prior law, such tax applied at an annual rate of $15 per establishment. Effective for Litter Tax returns due May 1, 2021, this annual rate for the additional tax increases to $30 per establishment.

Under existing law, any taxpayer who fails to pay the Litter Tax by the May 1 deadline is subject to a penalty equal 100% of the tax due. In addition, interest accrues at the rate established pursuant to Va. Code § 58.1-1812. Effective for Litter Tax payments due May 1, 2021, an additional penalty of $100 will apply to any late payments. This new penalty applies in addition to the existing 100% penalty and any interest that may accrue.

More information can be found in Tax Bulletin 21-1 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov or contact us at 804.367.8037 for business tax questions.

Virginia Tax Bulletin 20-12: Important Information About Virginia's Interest Rates

Thu, 10 Dec 2020 14:19:56 GMT

Virginia Interest Rates Stay the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the first quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the first quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the first quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 20-12 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 20-11: Important Information Regarding Virginia's Tobacco Products Tax

Tue, 01 Dec 2020 17:10:06 GMT

Important Information Regarding Virginia’s Tobacco Products Tax

Today, Virginia Tax is notifying taxpayers of changes to the state's Tobacco Products Tax recently enacted by the Virginia General Assembly.

Beginning Jan.1, 2021, heated tobacco products will be taxed at the rate of 2.25 cents per stick for taxable sales or purchases occurring on and after Jan. 1, 2021. Heated tobacco products will not be subject to the stamping requirements imposed on cigarettes under the Virginia Cigarette Tax.

Additionally, the Virginia General Assembly adopted economic nexus for purposes of the Tobacco Products Tax. Beginning Jan. 1, 2021, a distributor shall be deemed to have sufficient activity within the commonwealth to require registration if such distributor:

Receives more than $100,000 in gross revenue from sales of tobacco products in the commonwealth in the previous or current calendar year; or
Engages in 200 or more separate tobacco products sales transactions in the commonwealth in the previous or current calendar year.

More information can be found in Tax Bulletin 20-11 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact the Tobacco Tax Unit at 804.371.0730.

Virginia Tax Bulletin 20-10: Important Information Regarding Virginia’s Enhanced Form 1099-K Filing Requirements

Fri, 30 Oct 2020 16:31:31 GMT

Important Information Regarding Virginia’s Enhanced Form 1099-K Filing Requirements

Virginia Tax is announcing changes to the filing requirements in Virginia associated with Form 1099-K. Virginia law now requires that a payment settlement entity submit to Virginia Tax either (1) a duplicate of each Form 1099-K that it submits to the IRS or (2) a duplicate of each Form 1099-K that it submits to the IRS related to a participating payee with a Virginia state address or that is a Virginia taxpayer. “Payment settlement entities” include:

In the case of a payment card transaction, the merchant acquiring entity (defined as the bank or other organization which has the contractual obligation to make payment to participating payees in settlement of payment card transactions); and
In the case of a third party network transaction, the third party settlement organization (defined as the central organization which has the contractual obligation to make payment to participating payees of third party network transactions).

This Virginia filing requirement applies to reportable payment transactions made on or after Jan. 1, 2020.

In addition, for Virginia tax purposes, third-party settlement organizations must now submit Form 1099-K information to Virginia Tax based on a different threshold than what is imposed for federal tax purposes.

For federal tax purposes, third party settlement organizations are required to submit to the IRS Form 1099-K with respect to third party network transactions of a participating payee, if for the calendar year, reportable payment transactions with the participating payee exceed $20,000 and the total number of transactions with the participating payee exceeds 200.
For Virginia tax purposes, third party settlement organizations are now required to submit Form 1099-K information to Virginia Tax to the extent that they make payments of $600 or more in a taxable year to another person who is not an employee in pursuit of the organization’s trade or business.

This may require certain third-party settlement organizations to report Form 1099-K to Virginia Tax even if they were not required to submit such information to the IRS. Such information is also required to be provided to the participating payee. This enhanced reporting requirement applies only with respect to participating payees with a Virginia mailing address and to reportable payment transactions made on or after Jan. 1, 2020.

Finally, payment settlement entities are required to submit Form 1099-K information to Virginia Tax electronically.

More information regarding these requirements, including due dates and the process for requesting a waiver, can be found in Tax Bulletin 20-10 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8037 for business tax questions.

Changes coming in 2021 for Virginia-Specific Ethics Course

Thu, 08 Oct 2020 13:22:51 GMT

Beginning on Feb. 1, 2021, the new format will allow CPAs to take a variety of different courses and topics to meet the CPE ethics requirement, as long as it is taken from a VBOA-approved provider.

The two-hour annual CPE requirement will remain the same. All licensees (excluding those approved for the Inactive status) will still be required to complete a VBOA-approved ethics course that complies with VBOA regulation 18VAC5-22-90.

However, CPAs will have a choice of the ethics course they can take to meet the two-hour ethics course CPE requirement. CPAs can take an ethics course that is specific to their line of work or something they prefer.

Every ethics course must be pre-approved by the VBOA and include the 2021 VBOA Segment. The 2021 VBOA Segment is a 10-minute video that must be added to all approved ethics courses.

The VBOA will continue to approve all providers and courses ahead of time and it will be the CPAs responsibility to choose an ethics course from a VBOA-approved provider. Providers must submit their ethics course with the VBOA Segment for approval by submitting their course and approval request to the VBOA. Only approved courses will meet the 2021 Virginia ethics requirement.

This new format will allow you and other providers to create a course of your choosing. However, the backbone of the course must be focused on ethics but can be told and presented in a variety of ways on a variety of topics.

Some examples of course topics may include, but are not limited to:

Professional conduct and ethics
Ethics in the real world
Ethics in tax practice
Behavioral ethics
Governmental ethics
Ethics of industry professionals/CPAs

2020 format

Currently, there is only one Virginia-Specific Ethics Course offered each year and all Active Virginia CPAs are required to take the same course.

Virginia Tax Bulletin 20-9: Important Information About Virginia's Interest Rates

Thu, 10 Sep 2020 14:48:09 GMT

Virginia Interest Rates Stay the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the fourth quarter of 2020. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the fourth quarter of 2020 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the fourth quarter of 2020 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 20-9 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 20-8: New Regional Sales and Use Tax in Central Virginia Region

Mon, 10 Aug 2020 20:37:12 GMT

New Regional Sales and Use Tax in Central Virginia Region

Virginia Tax is announcing that effective Oct.1, 2020, a new .7% regional retail sales and use tax will be levied in localities in Central Virginia. This includes the city of Richmond and the counties of Charles City, Chesterfield, Goochland, Hanover (including the town of Ashland), Henrico, New Kent and Powhatan. The sales and use tax levied in these localities will total 6%, comprised of the 4.3% state tax, the .7% regional state tax and the 1% percent local option tax.

Sales made on or after Oct.1, 2020, will be subject to the new tax rate. Items delivered to a purchaser and paid for on or after Oct. 1, 2020, will be taxed at the 6% rate, regardless of when the property was ordered. The increased rate will not apply to property delivered prior to Oct. 1, 2020, but paid for on or after Oct.1, 2020. Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to Oct.1, 2020, even though delivery may occur on or after Oct.1, 2020, or the paid-in-full lease payment covers a lease period beginning on or after Oct.1, 2020.

More information can be found in Tax Bulletin 20-8 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8037 for business tax questions.

Virginia Tax Bulletin 20-7: Important Information About Virginia's Interest Rates

Wed, 10 Jun 2020 20:27:09 GMT

Virginia Interest Rates Decrease

Virginia Tax announces that Virginia's interest rates will decrease for the third quarter of 2020. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the third quarter of 2020 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the third quarter of 2020 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 20-7 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

2020 Legislative Summary Now Available

Mon, 01 Jun 2020 18:37:08 GMT

2020 Legislative Summary Published

The 2020 Legislative Summary is now available.

The Legislative Summary is published by Virginia Tax as a convenient reference guide to state and local tax legislation enacted by the 2020 Session of the General Assembly, including the reconvened session on April 22, 2020.

The Summary includes a general description of enacted legislation affecting:

State taxes administered by Virginia Tax, and
Local taxes for which Virginia Tax assists with administration, or on which Virginia Tax renders advisory assistance.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

View the Legislative Summary

If you have additional questions, please visit https://www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions or 804.367.8037 for business tax questions.

Virginia Tax Guidelines: Guidelines and Rules for the Tobacco Products Tax

Mon, 04 May 2020 17:46:08 GMT

Effective July 1, 2020, Item 3-5.21 of House Bill 30 (the 2020 Appropriation Act) increases the tobacco products tax rates on all products subject to the tax for taxable sales or purchases occurring on and after such date. This budget provision also imposes the tobacco products tax on liquid nicotine products at the rate of $0.066 per milliliter of liquid nicotine, effective July 1, 2020.

Updated Guidelines and Rules for the Tobacco Products Tax have been published to reflect these changes. As necessary, additional guidelines and rules will be published and posted on the Virginia Tax website at www.tax.virginia.gov. For additional information, please contact the agency's Tobacco Unit at tobaccounit@tax.virginia.gov or call 804.371.0730.

Virginia Tax Bulletin 20-6: Additional Sales and Use Tax in Halifax County

Wed, 29 Apr 2020 19:45:48 GMT

Additional Sales and Use Tax in Halifax County

Virginia Tax is announcing that effective July 1, 2020, a new 1% additional retail sales and use tax will be levied in Halifax County. The sales and use tax levied in Halifax County will total 6.3%, comprised of the 4.3% state tax, the 1% percent local option tax, and the 1% percent Halifax additional tax.

Sales made on or after July 1, 2020, will be subject to the new tax rate. Items delivered to a purchaser and paid for on or after July 1, 2020, will be taxed at the 6.3% rate, regardless of when the property was ordered. The increased rate will not apply to property delivered prior to July 1, 2020, but paid for on or after July 1, 2020. Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to July 1, 2020, even though delivery may occur on or after July 1, 2020, or the paid-in-full lease payment covers a lease period beginning on or after July 1, 2020.

More information can be found in Tax Bulletin 20-6 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8037 for business tax questions.

Virginia Tax Bulletin 20-5: Important Information Regarding Certain Virginia Tax Payment Deadlines

Mon, 27 Apr 2020 17:03:29 GMT

Important Information Regarding Virginia's Income Tax Payment Deadlines: Interest Waiver for Certain Tax Payments in Response to the COVID-19 Crisis

Virginia Tax is announcing that certain income tax payments originally due during the period from April 1, 2020, to June 1, 2020, may now be submitted to the agency without the accrual of interest as would otherwise be required for late payments. This waiver of interest only applies if full payment is made on or before June 1, 2020. For a taxpayer filing on extension, at least 90% of the total tax liability must be paid by June 1, 2020, in order for the interest waiver to apply. If the interest waiver applies to such a taxpayer, no interest will accrue on the amount of tax paid by June 1, 2020, but interest
will accrue from the original due date to the date of payment on any amount left unpaid after June 1, 2020.

This waiver of interest applies to any payment required to be made with a Taxable Year 2019 individual, corporate, or fiduciary income tax return, as well as any such payment required to be made with respect to an election to file on extension. In addition, this waiver of interest applies to any individual, corporate, or fiduciary estimated income tax payments that are required to be paid during the period from April 1, 2020, to June 1, 2020. The waiver also applies to payments associated with composite returns.

Dealers that were granted an extension of the due date for the February 2020 sales tax return and payment due in March pursuant to Tax Bulletin 20-3 will receive a waiver of the interest that would have otherwise accrued for such late payment. This waiver of interest only applies to such payments submitted to Virginia Tax no later than April 20, 2020.

More information can be found in Tax Bulletin 20-5 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 20-4: Important Information Regarding Virginia's Income Tax Payment Deadlines

Fri, 20 Mar 2020 16:36:00 GMT

Important Information Regarding Virginia's Income Tax Payment Deadlines: Income Tax Payment Extension and Penalty Waiver in Response to the COVID-19 Crisis

Virginia Tax is announcing that any income tax payments due during the period from April 1, 2020, to June 1, 2020, can now be submitted at any time on or before June 1, 2020, without penalty. As a result, Virginia Tax will automatically waive any late payment penalties that would otherwise apply so long as full payment is made by June 1, 2020. If full payment of the amount owed during the period is not made by June 1, 2020, this penalty waiver will not apply, and late payment penalties will accrue from the original date that the payment was due.

Interest will continue to accrue from the original due date of such payment. Therefore, taxpayers who are able to pay by the original due date are encouraged to do so. Taxes eligible for this payment extension and penalty waiver include individual, corporate, and fiduciary income taxes, as well as any estimated income tax payments that are required to be paid to Virginia Tax during this period.

Please note that this does not provide a filing extension. To avoid any late filing penalties that may apply, taxpayers that utilize the aforementioned payment extension are still required to file income tax returns by the relevant due dates. However, if you are unable to file by such due dates, Virginia offers automatic filing extensions to all taxpayers for up to 6 months (or 7 months in the case of certain corporations). No application is required to file on extension. Please see the Virginia Tax website for more information. If you decide to take advantage of Virginia’s automatic filing extension, please be sure to make an extension payment by June 1, 2020, to avoid late payment penalties or extension penalties, as applicable.

More information can be found in Tax Bulletin 20-4 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Tax Bulletin 20-3: Important Information For Those Affected By The COVID-19 Crisis

Thu, 19 Mar 2020 21:01:30 GMT

Important Information for Those Affected by the COVID-19 Crisis: Option to Request Extension of Sales Tax Deadlines

Tax Commissioner Craig M. Burns has announced that Virginia Tax will consider requests from sales tax dealers for an extension of the due date for filing and payment of the February 2020 sales tax return due March 20, 2020. If the request is granted, Virginia Tax will allow filing and payment of such return on April 20, 2020, with a waiver of any penalties that would have applied. However, interest will accrue even if an extension is granted.

Dealers should submit a request for extension by utilizing the secure e-mail
system available on the Virginia Tax website, by faxing to 804.254.6111, or writing to the following address:

Virginia Tax
Office of Customer Services
P.O. Box 1115
Richmond, VA 23218-1115

More information can be found in Tax Bulletin 20-3 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Tax Bulletin 20-2: Important Information About Virginia's Interest Rates

Mon, 02 Mar 2020 20:31:54 GMT

Virginia Interest Rates Remain the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the second quarter of 2020. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the second quarter of 2020 will also remain at 5% for tax underpayments and 5% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the second quarter of 2020 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 20-2 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Tax Bulletin 20-1: Important Information Regarding 2019 Virginia Income Tax Returns

Wed, 19 Feb 2020 18:32:00 GMT

Important Information Regarding 2019 Virginia Income Tax Returns: Virginia's Conformity to the Internal Revenue Code Advanced to Dec. 31, 2019

Under emergency legislation enacted by the 2020 General Assembly, Virginia's date of conformity to the terms of the Internal Revenue Code will advance from Dec. 31, 2018, to Dec. 31, 2019. This legislation also allows Virginia to generally conform to the Further Consolidated Appropriations Act, 2020.

However, it specifically deconforms Virginia from a provision that reduces the medical expense deduction floor for Taxable Year 2019 and Taxable Year 2020. Virginia generally allows taxpayers to claim a deduction on their state returns for most itemized deductions that were claimed for federal income tax purposes, including the medical expense deduction. Such deduction is equal to the amount of a taxpayer’s eligible medical expenses in excess of a deduction floor. The deduction floor was set to increase from 7.5% of federal adjusted gross income to 10% for Taxable Year 2019. The Further Consolidated Appropriations Act, 2020 extended the 7.5% deduction floor for Taxable Year 2019 and Taxable Year 2020. Because Virginia deconforms from this provision, Virginia’s deduction floor will be 10% for Taxable Year 2019 and Taxable Year 2020.

The legislation enacted by the 2020 General Assembly also allows Virginia to conform to a federal tax law stating that the Virginia Beach Tragedy Fund is entitled to federal tax exempt status. In addition, this ensures that cash contributions made specifically for the relief of victims or families of victims of the tragedy qualify for the charitable contributions deduction.

Tax Bulletin 20-1 provides more detail and information regarding the conformity adjustments that may be necessary on Taxable Year 2019 income tax returns.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Updated Tax Bulletin 19-10: Important Information About Virginia's Interest Rates

Wed, 11 Dec 2019 19:34:23 GMT

Virginia Interest Rates Remain the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the first quarter of 2020. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the first quarter of 2020 will also remain at 5% for tax underpayments and 5% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the first quarter of 2020 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 19-10 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Tax Bulletin 19-9: Important Information Regarding Virginia's Overall Limit on Itemized Deductions

Thu, 05 Dec 2019 01:38:14 GMT

Important Information Regarding Virginia's Overall Limit on Itemized Deductions: Indexed Amounts of the Limitation for Taxable Year 2019

Virginia Tax is announcing the reinstatement of the Pease Limitation for Virginia income tax purposes, meaning the overall limit on itemized deductions is back in effect beginning with Taxable Year 2019.

This is due to legislation enacted by the Virginia General Assembly deconforming from the provision of the federal Tax Cuts and Jobs Act (TCJA) that suspended the limitation.

For Taxable Year 2019, the amounts of the Virginia-specific Pease limitation amounts are:

$326,050 if married filing jointly or a qualifying widow(er);
$298,850 if a head of household;
$271,700 if single; and
$163,025 if married filing separately.

Details can be found in Tax Bulletin 19-9 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Tax Bulletin 19-7: Important Information Regarding Virginia Fiduciary Income Tax Returns

Fri, 22 Nov 2019 19:08:37 GMT

Important Information Regarding Virginia Fiduciary Income Tax Returns: Return Filing and Other Requirements Applicable to Virginia's Revised Definition of Resident Estate or Trust

Virginia Tax is announcing a revision to the definition of “resident estate or trust.” Under legislation enacted by the 2019 General Assembly, an estate or trust is no longer considered a resident estate or trust for Virginia income tax purposes on or after July 1, 2019, solely because it is being administered in Virginia.

Therefore, unless an estate or trust administered in Virginia also meets one of the three remaining criteria, it’s considered a nonresident estate or trust for Virginia income tax purposes. The criteria include:

The estate of a decedent who at the time of death was domiciled in Virginia;
A trust created by the will of a decedent who at the time of death was domiciled in Virginia; or
A trust created by or consisting of property of a person domiciled in Virginia.

All resident estates and trusts that are required to file a federal fiduciary income tax return or that have any Virginia taxable income for the taxable year are required to file an income tax return in Virginia. A nonresident estate or trust is not required to file an income tax return in Virginia unless it is required to file a federal fiduciary income tax return and had Virginia source income.

For taxable years beginning on or after July 1, 2019, the new definition of “resident estate or trust” will be in effect for the entire taxable year. A taxpayer should use the new definition contained in this legislation to determine if it was a “resident estate or trust” for such taxable years. For taxable years ending on or before June 30, 2019, the new definition of “resident estate or trust” does not apply.

However, for many taxpayers this new definition became effective during the midst of their taxable year. For these taxpayers, the new definition will only apply to the portion of their taxable year that occurs on or after July 1, 2019. The old definition will apply to the portion of their taxable year that occurred prior to July 1, 2019.

Details can be found in Tax Bulletin 19-7 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

Tax Bulletin 19-6: Virginia’s Interest Rates Remain the Same for the Fourth Quarter of 2019

Fri, 06 Sep 2019 19:05:06 GMT

Virginia Tax announces that Virginia's interest rates will stay the same for the fourth quarter of 2019. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the fourth quarter of 2019 will also remain at 5% for tax underpayments and 5% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the fourth quarter of 2019 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 19-6 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Tax Bulletin 19-3: Virginia’s Interest Rates will remain the same for the Second Quarter of 2019

Wed, 06 Mar 2019 14:19:54 GMT

Federal Rates Remain Unchanged: State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621. IRC § 6621 dictates that the federal underpayment and overpayment rates are three percentage points higher than the federal short‐term rate. Federal rates for the second quarter of 2019 will be 6% for tax underpayments (assessments) and 6% for tax overpayments (refunds) by noncorporate taxpayers.

Virginia Code § 58.1‐15 provides that the underpayment rate for Virginia taxes will be 2% higher than the corresponding federal rate and the overpayment rate for Virginia taxes will be 2% higher than the federal overpayment rate for noncorporate taxpayers. Accordingly, the Virginia rates for the second quarter of 2019 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds).

Rate for Addition to Tax for Underpayments of Estimated Tax

Taxpayers whose taxable year ends on March 31, 2019: For the purpose of computing the addition to the tax for underpayment of Virginia estimated income taxes on Form 500C (for corporations), Form 760C (for individuals, estates, and trusts), or Form 760F (for farmers and fishermen), the second quarter 8% underpayment rate will apply through the due date of the return, July 15, 2019.

Reduced Rate for Certain Assessments in Dispute

For administrative appeals filed with the Department of Taxation on or after July 1, 2011, a reduced interest rate equal to the federal short term rate established pursuant to IRC § 6621(b) applies, beginning nine months after the date of assessment until a determination is issued. The federal short‐term rate established pursuant to IRC § 6621(b) for the second quarter of 2019, rounded to the nearest whole percent, is 3%. Accordingly, the reduced rate for the second quarter of 2019 for qualifying assessments in dispute is 3%.

Local Tax

Assessments: Localities that assess interest on delinquent taxes under Va. Code § 58.1‐3916 may impose interest at a rate not to exceed 10% for the first year of delinquency, and at a rate not to exceed 10% or the federal underpayment rate in effect for the applicable quarter, whichever is greater, for the second and subsequent years of delinquency. For the second quarter of 2019, the federal underpayment rate is 6%.

Refunds: Localities that charge interest on delinquent taxes are required to pay interest to taxpayers on all overpayments or erroneously assessed taxes at the same rate as they charge interest on delinquent taxes under Va. Code § 58.1‐3916. Click here to read the full bulletin for the recent interest rates.

Additional Information: This Tax Bulletin, along with other reference documents, is available online in the Laws, Rules and Decisions section of the Department’s website, located at www.tax.virginia.gov. If you have questions about interest rates, please visit Virginia Tax’s website or contact the Department at 804.367.8031 (for individuals), 804.786.2450 (for Soft Drink Excise Tax and Aircraft Sales and Use Tax), or 804.367.8037 (for all other business taxes).

Tax Bulletin 19-4: Penalty Relief for Farmers, Fishermen, and Merchant Seamen

Wed, 06 Mar 2019 14:16:15 GMT

In response to Internal Revenue Service (“IRS”) Notice 2019‐17, Tax Commissioner Craig M. Burns announced relief from the estimated tax underpayment penalty for farmers, fishermen, and merchant seamen unable to file and pay their 2018 taxes by the March 1 deadline. Virginia will also allow these individuals additional time to file and pay their taxes. Farmers, fishermen, and merchant seamen will be provided relief from the estimated tax underpayment penalty provided a return is filed and payment of the entire tax due is made by April 15, 2019.

Due to certain changes in the rules that affect farmers and fishermen, the United States Treasury Department and IRS anticipate that farmers and fishermen may not be able to accurately determine and pay their tax liability by the March 1 deadline. Accordingly, the IRS is providing relief to certain individual taxpayers who are farmers or fishermen by waiving penalties related to estimated tax payments.

Under Virginia law, farmers, fishermen, and merchant seamen with two‐thirds of their estimated Virginia gross income from self‐employed farming, fishing or being a merchant seaman have special filing requirements. These individuals do not make quarterly estimated tax payments and are not subject to an estimated tax underpayment penalty provided their return is filed by March 1 and the entire tax is paid at that time.

In order to receive an automatic waiver of the estimated tax underpayment penalty, farmers, fishermen and merchant seamen need only to file their returns and pay the entire tax due by April 15, 2019. No special action is required. If you have additional questions, please visit our website at http://www.tax.virginia.gov or contact us at (804) 367‐8031.

Tax Bulletin 19-2: Important Information Regarding Spouses of United States Military Servicemembers

Tue, 26 Feb 2019 14:28:05 GMT

On December 31, 2018, Congress enacted the Veterans Benefits and Transition Act of 2018. This federal legislation amends the Servicemember Civil Relief Act to allow spouses of a servicemember to use the same residence for state tax purposes as that of the servicemember.

The Veterans Benefits and Transition Act allows qualifying spouses to elect the same residency as the servicemember for state tax purposes, even if the spouse has a different residency from that of the servicemember. This election can be made annually beginning with Taxable Year 2018, regardless of the date on which the marriage of the spouse and the servicemember occurred.

Tax Bulletin 19-2 details how the changes affect 2018 Virginia income tax returns.

View the Tax Bulletin

If you have additional questions, please visit our website at www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions.

Tax Bulletin 19-1: Virginia's Conformity to the Internal Revenue Code Advanced to December 31, 2018

Tue, 19 Feb 2019 17:23:11 GMT

Under emergency legislation enacted by the 2019 General Assembly on February 15, 2019, Virginia's date of conformity to the terms of the Internal Revenue Code will advance from February 9, 2018, to December 31, 2018.

The new legislation allows Virginia to generally conform to the Tax Cuts and Jobs Act and the Bipartisan Budget Act of 2018 for Taxable Year 2018 and after. It also includes Virginia income tax law changes that may affect business taxpayers filing income tax returns for Taxable Year 2018 and after.

In addition, this legislation provides a refund of up to $110 for an individual or $220 for married persons filing a joint return. In order to receive a refund, taxpayers need to file a complete return for Taxable Year 2018 before July 1, 2019. A refund is allowed up to the amount of a taxpayer’s tax liability after the application of any deductions, subtractions, or credits to which the individual or married persons are otherwise entitled. Such refunds are required to be issued on or after October 1, 2019, but before October 15, 2019.

This legislation also includes Virginia income tax law changes that may affect individual taxpayers filing income tax returns for Taxable Year 2019 and after. We will publish additional guidance regarding such provisions soon.

Tax Bulletin 19-1 details the conformity adjustments that may be necessary and provides more information on how the changes affect 2018 Virginia income tax returns.

View the Tax Bulletin

Additionally, Virginia will continue to deconform from:

Bonus depreciation allowed for certain assets under federal income taxation;
Five-year carry back of certain net operating losses (“NOLs”) generated in Taxable Years 2008 and 2009;
Tax exclusions related to cancellation of debt income; and
Tax deductions related to the application of the applicable high yield debt obligation rules.

If you have additional questions, please visit our website at www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Tax Professionals: Processing Individual Income Tax Returns

Tue, 19 Feb 2019 17:00:43 GMT

On February 15, the Governor signed legislation conforming Virginia’s tax laws to the federal Tax Cuts and Jobs Act. We are now able to prepare our systems to begin processing 2018 returns, and will start processing over Presidents’ Day weekend.

All 2018 tax forms and instructions are now available on our website.

As you know, our systems process returns in the order we receive them – first in/first out.

Once we process a taxpayer’s return, they can use the Where’s My Refund web app to get up-to-date information about their return status.

As you’d expect, we already have a significant backlog of returns, so taxpayers will experience slower turnaround times for refunds than they’re accustomed to until we have worked through the backlog.

We appreciate your help in ensuring that the taxpayer’s address is correct whether they’re filing electronically or on paper.

Please see the Tax Bulletin distributed earlier today for details about the legislation.

New for Taxpayers: Virginia Tax Accepting, Not Processing Returns

Fri, 25 Jan 2019 19:43:21 GMT

For Immediate Release
Date: 01/25/2019
Contact: Stephanie M. Benson , Communications Specialist , 804.404.4109 , stephanie.benson@tax.virginia.gov

New for Taxpayers: Virginia Tax Accepting, Not Processing Returns
~Individual Income Tax Filing Season Opens on Jan. 28, 2019~

RICHMOND, Va. – There is one big difference to individual income tax filing in Virginia this year. Although people can start filing their individual income taxes on Monday, Jan. 28, 2019, Virginia Tax will not be able to start processing returns immediately, as the Virginia General Assembly determines the commonwealth’s response to the federal Tax Cuts and Jobs Act.

“We’re committed to providing the information necessary to help everyone properly prepare and file this tax season,” said Tax Commissioner Craig M. Burns. “We also want to ensure that returns are processed accurately in as timely a manner as possible.”

While we are waiting to start processing returns, taxpayers will not have access to refund information using the Where’s My Refund application on the Virginia Tax website. If taxpayers file electronically and receive a message that Virginia Tax has accepted the return, no more action is necessary at this time.

Last year, Virginia Tax processed more than 4.2 million individual income tax returns with 83 percent of people filing electronically. You’re encouraged to again file electronically this year and request a refund, if you have one coming, via direct deposit. The filing deadline for most people is Wednesday, May 1, 2019.

For additional information about filing season, including tips to reduce the chance your return is stopped for review, go to www.tax.virginia.gov.

Virginia Interest Rates Will Increase

Fri, 14 Dec 2018 20:54:50 GMT

Virginia Tax announces that Virginia's interest rates will increase for the first quarter of 2019. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the first quarter of 2019 will increase to 6% for tax underpayments and 6% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the first quarter of 2019 will increase to 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 18-6 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

VA TAX NEWS - Virginia Interest Rates Remain Unchanged

Wed, 20 Jun 2018 14:15:23 GMT

Virginia Tax announces that Virginia's interest rates for the third quarter of 2018 will remain unchanged. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the third quarter of 2018 will remain unchanged at 5% for tax underpayments and 5% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the third quarter of 2018 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 18-4 and in the Laws, Rules, and Decisions section of our website.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

VA TAX NEWS - 2018 e-File Survey (for practitioners)

Mon, 14 May 2018 14:35:03 GMT

At Virginia Tax we are always looking for ways to learn from our partners. We value your input and would like to invite you to participate in a survey about your experience with the Virginia e-File program.

Your responses will be used to help us update and improve our systems, allowing us to provide you with the best possible experience on our platform.

The survey should take no more than 5-7 minutes to complete.

Start the survey

Please submit your feedback by June 11, 2018.

VA TAX NEWS - Retail Sales & Use Tax Rate Increase in the Historic Triangle

Mon, 14 May 2018 12:38:31 GMT

On May 10, 2018, the City of Williamsburg repealed local Ordinances 17-09, 17-10, and 17-16. Accordingly, effective July 1, 2018, there will be an additional one percent regional sales and use tax levied in the City of Williamsburg and the Counties of James City and York (the “Historic Triangle”).

This additional tax is authorized by Senate Bill 942 (2018 Acts of Assembly, Chapter 850). The total rate of the Retail Sales and Use Tax in these localities will increase to 7.0 percent, consisting of the 4.3 percent state tax, the 0.7 percent Hampton Roads regional tax, the new 1.0 percent Historic Triangle regional tax, and the 1.0 percent local option tax. The rate of tax on food purchased for home consumption is unaffected by the law change and will remain at the current 2.5 percent (1.5 percent state and 1 percent local) rate.

Details about this change can be found in Tax Bulletin 18-3.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions.

VA TAX NEWS - Update to Medical Expense Deduction Worksheet

Tue, 20 Mar 2018 15:31:52 GMT

Following the publication of Tax Bulletin 18-1 on February 26, we developed a medical expense deduction worksheet as an insert for the 760 instruction booklets.

We also posted the worksheet on our website and distributed it to tax software developers as a computational guide to supplement the information provided in TB 18-1.

We recently discovered that the worksheet did not adequately address situations where a taxpayer must add back the full amount of the federal deduction. If a taxpayer’s medical expenses do not exceed 10% of federal adjusted gross income, the Virginia addition is equal to the full amount of the federal deduction. We have clarified this issue on the worksheet by specifying that, in such cases, the amount on Line 6 should be entered as 0. This will allow taxpayers to correctly compute the Virginia addition.

Updated copies of both the worksheet and the instructions are now available on our website.

We are also communicating these changes to tax software vendors.

Should you have any questions, please contact Customer Services at 804.367.8031.

VA TAX NEWS - Virginia's Conformity to the Internal Revenue Code Advanced to February 9, 2018

Mon, 26 Feb 2018 20:30:00 GMT

Under emergency legislation enacted by the 2018 General Assembly on February 22 and February 23, 2018, Virginia's fixed-date of conformity to the terms of the Internal Revenue Code will advance from December 31, 2016, to February 9, 2018.

This legislation is effective for the taxable year 2017 and allows Virginia to conform to the Disaster Tax Relief and Airport and Airway Extension Act of 2017.

This legislation also conforms to most of the provisions of the Tax Cuts and Jobs Act and the Bipartisan Budget Act of 2018 that are effective for Taxable Year 2017. However, this legislation does not conform to the provision of the Tax Cuts and Jobs Act that temporarily increases the medical expenses deduction for Taxable Years 2017 and 2018. In addition, this legislation deconforms from most of the provisions of the Tax Cuts and Jobs Act and the Bipartisan Budget Act of 2018 that are effective for Taxable Year 2018 and thereafter..

Tax Bulletin 18-1 details the conformity adjustments that may be necessary and provides more information on how the changes affect 2017 Virginia income tax returns.

View the Tax Bulletin

Additionally, Virginia will continue to deconform from:

Federal income tax deductions for bonus depreciation allowed for certain assets under Internal Revenue Code (“IRC”) §§: 168(k), 168(l), 168(m), 1400L, and 1400N;
The five-year carryback of federal net operating loss deductions generated in Taxable Year 2008 or 2009;
Federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F); and
Federal income tax exclusions related to cancellation of debt income realized in connection with a reacquisition of business debt at a discount after December 31, 2008, and before January 1, 2011.

If you have additional questions, please visit our website at www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Provides Tax Relief to Victims of Hurricane Irma

Thu, 21 Sep 2017 19:22:32 GMT

Virginia Tax Commissioner Craig M. Burns has announced that Virginia will provide extensions and penalty waivers to individuals and businesses in Florida and Georgia who are unable to meet their filing and payment obligations because of Hurricane Irma.

Outlined in Tax Bulletin 17-12, income tax returns and estimated payments with an original or extended due date between the first day of the disaster* and January 31, 2018 will be granted a waiver of late filing and late payment penalties if the returns and payments are filed on or before March 2, 2018.

* September 4, 2017 in Florida and September 7, 2017 in Georgia

Effective July 1, 2017, the 12-month period for late renewals (VA licensed CPAs) ends.

Tue, 27 Jun 2017 15:53:34 GMT

The Virginia Board of Accountancy (VBOA) announced a major update involving individual and firm licenses and their expiration date. The Virginia Society of CPAs (VSCPA) and the VBOA have agreed that this change requires an update to the 2017 Virginia-specific Ethics course. To that end, the VSCPA is working diligently to incorporate the change as quickly as possible into the course.

On Friday, July 7, you will receive a new PowerPoint that will include a new introductory video with an explanation of the change that takes place on July 1, 2017. Additionally, you will also receive a one-page handout that should be given to your CPE takers in addition to the current manual. We also recommend that you reach out to your previous Ethics takers who have taken classes prior to this change to make them aware.

Starting July 1, 2017, the additional 12-month period for late renewals ends. Unrenewed licensees will automatically go into Expired status the day after the renewal is due.

VA TAX NEWS - Governor McAuliffe Signs Bill Advancing Date of Income Tax Conformity to December 31, 2016

Mon, 06 Feb 2017 21:58:17 GMT

Under emergency legislation (House Bill 1521; Chapter 1 of the 2017 Acts of Assembly) passed by the 2017 General Assembly and signed by Governor McAuliffe on February 3, 2017, Virginia's fixed-date of conformity to the terms of the Internal Revenue Code will advance from December 31, 2015, to December 31, 2016. Tax Bulletin 17-1 provides taxpayers with directions on how to reconcile this legislation with their 2016 Virginia income tax returns. This legislation allows Virginia to conform to federal tax legislation enacted during 2016 that would impact the filing of Virginia income tax returns, including the United States Appreciation for Olympians and Paralympians Act of 2016.

Virginia will continue to disallow federal income tax deductions for bonus depreciation allowed for certain assets under Internal Revenue Code (“IRC”) §§ 168(k), 168(l), 168(m), 1400L and 1400N; the five-year carryback of federal net operating loss deductions generated in Taxable Year 2008 or 2009; federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F); and federal income tax exclusions related to cancellation of debt income realized in connection with a reacquisition of business debt at a discount after December 31, 2008, and before January 1, 2011.

Tax Bulletin 17-1 can be found on the Department’s website by clicking here.

If you have questions, please call our Customer Contact Center at (804) 367-8037.

VA TAX NEWS - 2016 LEGISLATIVE SUMMARY RELEASED

Thu, 26 May 2016 15:10:59 GMT

The 2016 Legislative Summary has been released. The full text of the Legislative Summary can be found on the Department's website in the "Facts and Figures" section or by clicking here.

The Legislative Summary is published by the Department of Taxation as a convenient reference guide to state and local tax legislation enacted by the 2016 Session of the General Assembly, including the reconvened session on April 20, 2016. Please note that any legislation enacted after this date is not included. The Summary includes a general description of enacted legislation affecting:

State taxes administered by the Department, and
Local taxes for which the Department assists with administration or on which the Department renders advisory assistance.

References to chapter numbers are to the corresponding chapters in the Acts of Assembly, which may be viewed at: http://lis.virginia.gov. Effective dates of the legislation vary and are set out in each description.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

To view the full text of the Legislative Summary, click here.

If you have additional questions, please visit the Department's website at http://www.tax.virginia.gov, or contact the Department at (804) 367-8031 for individual income tax questions or (804) 367-8037 for business tax questions.

VA TAX NEWS - CUSTOMER SERVICES WALK-IN CENTER CLOSES MAY 27

Wed, 18 May 2016 18:45:54 GMT

Our Customer Services Walk-In Center, located at 1957 Westmoreland St. in Richmond, will close for the 2016 individual income tax filing season on Friday, May 27. Until then, the center is open 8:30 a.m. to 5 p.m., Monday through Friday. For walk-in assistance, please arrive no later than 4:30 pm.

The Cashiers' Office at the same location is open year-round to receive tax payments, sell tobacco stamps, and receive tax returns.

To get help by phone year-round, call our Customer Contact Center, 8:30 a.m. to 5 p.m., Monday through Friday.

Individual income taxes: (804) 367-8031
Business taxes: (804) 367-8037

VA TAX NEWS - NEW POLICY EXEMPTS SALES TAX ON MEALS AND CATERING PURCHASES BY QUALIFYING NONPROFITS

Wed, 04 May 2016 12:57:09 GMT

Effective April 22, 2016, dealers are no longer required to collect sales and use tax on prepared meals, catering, and labor related to preparing and serving food purchased by nonprofit organizations, churches, state agencies, and local governments that have Virginia sales tax exemption certificates and meet certain requirements.

In order for the purchases to qualify for the exemption, the nonprofit organization, church, or government entity must demonstrate all of the following:

The provision of prepared meals, catering, and related services supports a function, mission, service, or purpose of the organization.
The charge for prepared meals, catering, and services is billed to and paid for by the organization claiming the sales tax exemption.
The organization that claims the exemption controls when, how, and who consumes the prepared food or catered meals.

The Department of Taxation is not issuing new nonprofit exemption certificates at this time. New certificates will be issued when organizations renew their sales tax exemption. Instead, the department is sending letters explaining this policy change to all organizations holding department-issued nonprofit exemption certificates.

Organizations should provide the letter along with their exemption certificate when purchasing prepared meals, catering, or related services from dealers.

For more information, see Tax Bulletin 16-3 “Important Information Regarding Meals and Catering Purchased by Nonprofit Organizations, Churches, and Governmental Entities” on the department’s website.

If you have questions, please call our Customer Contact Center at (804) 367-8037 or our Nonprofit Exemption Unit at (804) 371-4023.

VA TAX NEWS - REFUNDS MAY BE DELAYED DUE TO EXTRA REVIEW

Mon, 07 Mar 2016 19:11:19 GMT

The Virginia Department of Taxation is sending “Review of Tax Return” letters (AUIN073A RAP Additional Review) to some taxpayers to verify withholding information. Because of the increase in identity theft and refund fraud, we’re taking extra precautions this year to validate the refund returns we process.

Processing of tax returns could take longer as we work to protect taxpayer information and ensure that taxpayers receive the state income tax refunds to which they are entitled.

We understand that taxpayers may be concerned if they receive a Review of Tax Return letter. Receiving the letter does not mean they are victims of identity theft or that their returns contain errors or missing data. It just means that their returns were stopped for review.

If your clients receive this letter, they should read it carefully to determine what action they might need to take.

Please let your clients know the following:

If they did not submit an individual income tax return, they should check where indicated in the first paragraph of the letter and return it using the fax number or address provided.
If they did file a return, they should follow the instructions in the letter and submit all requested documents as soon as possible by fax or mail. We will continue processing returns once we receive all requested documents and confirm that their returns are correct. Please allow 7 business days for us to receive the documents.
If they filed a return and already received their refunds, or receive one before sending us the requested information, we were able to verify their returns through other means. We no longer need documentation from them, and they may disregard the letter.

We’re asking taxpayers for their patience during the filing season. We take identity theft and tax refund security seriously and must take the time necessary to verify that the refunds we're processing are correct. It could take 8-10 weeks after submitting all requested documents for taxpayers to receive their refund. If it’s been longer than this, please have them contact us.

We encourage you and your clients to visit Understanding your Review of Tax Return Letter (AUIN073A RAP Additional Review) on our website to learn more about this letter and the review process.

VA TAX NEWS - TAX BULLETIN 16-1

Mon, 08 Feb 2016 13:18:01 GMT

Governor McAuliffe Signs Bill

Advancing Date of Income Tax Conformity

to December 31, 2015

Conformity to the Internal Revenue Code for Taxable Year 2015

Under emergency legislation (House Bill 402; Chapter 2 of the 2016 Acts of Assembly) passed by the General Assembly and signed by Governor McAuliffe on February 5, 2016, Virginia's fixed-date of conformity to the terms of the Internal Revenue Code ("IRC") will advance from December 31, 2014 to December 31, 2015. Tax Bulletin 16-1 provides taxpayers with directions on how to reconcile this legislation with their 2015 Virginia income tax returns. This legislation allows Virginia to conform to federal tax legislation enacted during 2015 that would impact the filing of Virginia income tax returns, including the Protecting Americans from Tax Hikes Act of 2015.

Virginia will continue to disallow federal income tax deductions for bonus depreciation allowed for certain assets under Internal Revenue Code §§ 168(k), 168(l), 168(m), 1400L and 1400N; the five-year carryback of federal net operating loss deductions generated in Taxable Year 2008 or 2009; federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F); and federal income tax exclusions related to cancellation of debt income realized in connection with a reacquisition of business debt at a discount after December 31, 2008, and before January 1, 2011.

To view the full text of this tax bulletin, click here.

VA TAX NEWS - DECEMBER 2015 FILING REMINDER (CORPORATION INCOME TAX)

Mon, 14 Dec 2015 13:24:18 GMT

It's time to file!

Corporation Income Tax returns (Form 500) are due electronically on or before Dec. 15, 2015 from:

Fiscal year filers whose taxable year ends on Aug. 31, 2015.
Fiscal year filers whose taxable year ends on Feb. 28, 2015 and who are filing under Virginia’s automatic six-month extension.

Virginia Automatic Extension: Virginia grants an automatic six-month extension from the original due date to file Form 500. However, the extension doesn't allow for extra time to pay any taxes that are owed. Corporate taxpayers should pay any tentative tax due using Form 500CP (Virginia Automatic Extension Payment) when the return is due. Penalty and/or interest may apply if the tentative tax due wasn't paid by the original date the return was due. A penalty may apply to returns filed during the extension period if less than 90 percent of the return's total tax liability was paid by the original due date.

Electronic Filing Mandate: All corporations are required to file estimated tax payments, annual income tax returns and final payments electronically. If this requirement causes undue hardship, you may request a waiver by submitting the Virginia Corporation Electronic Filing Waiver Request form.

For details regarding Corporation Income Tax extensions and penalties or for information on how to file and pay electronically, visit our Corporation Income Tax web page.

It’s very important that we maintain accurate information regarding your business. Please use our Business iFile to:

Tell us if you close your business or a specific business location
Update your account with address or contact changes
Add a new tax to your account
Let us know you are no longer liable for a specific tax.

VA TAX NEWS - DECEMBER 2015 FILING REMINDER (PASS THROUGH ENTITY)

Mon, 14 Dec 2015 13:22:34 GMT

It's time to file!

Pass-Through Entity Return of Income and Return of Nonresident Withholding Tax (Form 502) is due on Dec. 15, 2015 from:

Fiscal year filers whose taxable year ends on Aug. 31, 2015.
Fiscal year filers whose taxable year ends on Feb. 28, 2015 and who are filing under Virginia’s automatic six-month extension.

Virginia Automatic Extension: Virginia grants an automatic six-month extension from the original due date to file Form 502. However, the extension doesn't allow for extra time to pay any taxes that are owed. Taxpayers should pay any tentative tax due using Form 502W (Pass-Through Entity Withholding Tax Payment) at the time the return is due. Penalty and/or interest may apply if the tentative tax due wasn't paid by the original date the return was due. A penalty may apply to returns filed during the extension period if less than 90 percent of the return's total tax liability was paid by the original due date.

Reminder: All pass-through entities are required to file the annual income tax return and make all payments electronically. If the electronic filing requirement causes undue hardship, taxpayers may request a waiver by submitting the Virginia Pass-Through Entity Electronic Filing Waiver Request form.

For details regarding extensions and penalties or for information on how to file and pay electronically, visit our Pass-Through Entity web page.

It’s very important that we maintain accurate information regarding your business. Please use our Business iFile to:

Tell us if you close your business or a specific business location
Update your account with address or contact changes
Add a new tax to your account
Let us know you are no longer liable for a specific tax

VA TAX NEWS - TAX DEPT PROVIDES PINs TO VICTIMS OF TAX-RELATED ID THEFT

Fri, 04 Dec 2015 03:09:13 GMT

To protect the personal information of Virginia taxpayers who have been identified as potential victims of identity theft, the Virginia Department of Taxation is providing these individuals with personal identification numbers (PINs) to use when filing their Virginia individual income tax returns in 2016.

We are sending PINs to affected taxpayers in personalized letters through the U.S. mail in early December. Because some of these taxpayers may be your clients, you should be aware of the following information:

You should ask all clients if they have been issued PINs from the Virginia Department of Taxation. These PINS are different than the IP PIN issued by the IRS or an electronic filing PIN. The PINs are not interchangeable.
The PIN, in combination with the taxpayer’s Social Security number, serves as a unique identifier. Use the PIN on any individual income tax returns filed in 2016, including amended and prior year returns.
If you use tax software to prepare returns, you will be prompted to enter the PIN. If you use Virginia’s fillable form, enter the PIN in the Office Use box. If you file a paper return, enter the PIN on page 2 in the Office Use box.
If you are preparing a joint tax return and each spouse was issued a PIN, only one PIN needs to be provided on the return. Either of the spouse’s PINs will be acceptable.
If the PIN is not provided on the return, processing of the return may be delayed.
If a taxpayer forgets his or her PIN or loses the letter, he or she will need to call our Customer Contact Center at (804) 367-8031 to request a new PIN which will be provided by mail. Only the taxpayer or a representative who has a valid power of attorney (POA) from the taxpayer can request a replacement PIN. A tax preparer without a valid POA cannot request a replacement PIN. All replacement PINs will be mailed to taxpayers.
The PIN will be valid for one calendar year. New PINs will be issued in November or December each year.
You should remind your clients not to share their PINs with anyone, except a tax professional filing their returns.

Only those taxpayers whom we have identified as victims of identity theft are eligible to receive PINs. At this time, we don’t have a process for other taxpayers to request PINs. We may consider expanding this effort during the 2017 individual income tax filing season.

If you have questions about the PIN process, please call the Tax Preparers’ Hotline at (804) 367-9286.

VA TAX NEWS - SALES TAX HOLIDAY SET FOR AUG. 7-9, 2015

Wed, 15 Jul 2015 12:51:10 GMT

Legislation enacted during the 2015 General Assembly (SB 1319, Acts of Assembly, Chapter 382) combines the three existing sales tax holidays into one, three-day holiday in August. The legislation took effect on July 1, 2015.

Prior Virginia law allowed for three separate sales tax holiday periods during which specified tangible personal property could be purchased exempt of the Retail Sales and Use Tax: a week-long exemption on hurricane preparedness items in May, a three-day exemption on school supplies and clothing in August, and a four-day exemption on items designated as Energy Star or WaterSense in October.

The legislation consolidates all three of these holidays into the same August weekend each year, with the holiday beginning on the first Friday in August and ending on the Sunday that immediately follows. For 2015, the holiday will begin on Friday, Aug. 7 at 12:01 a.m. and end on Sunday, Aug. 9, at 11:59 p.m. For 2016 and subsequent years, there will be no separate Hurricane Preparedness holiday held in May, nor a separate Energy Star or WaterSense tax holiday in October.

During the combined sales tax holiday, consumers may purchase portable generators, gas-powered chainsaws, chainsaw accessories, other hurricane preparedness items, clothing, footwear, school supplies, and Energy-Star or WaterSense-designated items, provided that each such item is priced below the maximum sales price and meets the other requirements set forth in the statutes.

Notable additions to the list of qualifying items from previous years include certain computer supplies priced at $20 or less per item, such as computer storage media and printer paper, and all light bulbs affixed with the Energy Star label.

Retailers may refer to the department's Combined Sales Tax Holiday Guidelines located here for a complete list of qualifying items, as well as the rules governing the upcoming combined holiday.

If you have additional questions regarding this sales tax exemption, please visit the department's Sales Tax Holiday web page, or contact the department at (804) 367-8037.

VA TAX NEWS - VDOT WANTS YOUR INPUT

Mon, 15 Jun 2015 17:06:18 GMT

Please Take our Survey

The Virginia Department of Taxation is gathering information to develop a new strategic plan, and we could use your help.

We want to create a new plan for the future with you, the individual taxpayer, in mind. We want to know what you think our strengths are, any concerns you may have in working with us, and how we can improve. Do you use our website, including our self-service functions, and do you file your income tax returns electronically? The survey is anonymous and available for a short time only.

So, if could spare a few minutes, please take this short survey and tell us how we're doing.

Thank you for your time.

VA TAX NEWS - LEGISLATIVE SUMMARY RELEASED

Fri, 12 Jun 2015 17:04:42 GMT

Legislative Summary Released

The 2015 Legislative Summary has been released. The full text of the Legislative Summary can be found on the Department's website in the "Facts and Figures" section or by clicking here.

The Legislative Summary is published by the Department of Taxation as a convenient reference guide to state and local tax legislation enacted by the 2015 Session of the General Assembly, including the reconvened session on April 15 and 17, 2015. Please note that any legislation enacted after this date is not included. The Summary includes a general description of enacted legislation affecting:

State taxes administered by the Department, and
Local taxes for which the Department assists with administration or on which the Department renders advisory assistance.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

To view the full text of the Legislative Summary, click here.

VA TAX NEWS - TAX CREDITS

Wed, 11 Feb 2015 17:23:33 GMT

Educational Improvement Scholarships Tax Credit

For taxable years beginning on or after Jan. 1, 2014, an income tax credit may be claimed for monetary or marketable securities donations made to scholarship foundations included on an approved list published by the Virginia Department of Education. The credit is equal to 65 percent of the monetary or marketable securities donation made to the scholarship foundation. Tax credits will be awarded to taxpayers on a first-come, first-served basis. For information on how to qualify, contact the Virginia Department of Education.

Taxpayers can claim credits earned during both 2013 and 2014 on the 2014 tax return. In the following years, taxpayers will only be able to claim the credit for the current year. For more information about this credit, see the Tax Department's 2013 Legislative Summary.

Research & Development Expenses Tax Credit

Effective for taxable years beginning on or after Jan. 1, 2014, the tax credit amounts are increased to 15 percent of the first $234,000 in Virginia qualified research and development expenses, or 20 percent of the first $234,000 of Virginia qualified research and development expenses if the research was conducted in conjunction with a Virginia public or private college or university, to the extent the expenses exceed a base amount. Pass-through entities now have the election to claim the credit at entity level, rather than allocating the credit to the entity owners. Effective for fiscal years beginning on or after July 1, 2014, the annual cap has been increased to $6 million. Additionally, the credit sunset date was extended to Dec. 31, 2018.

VA TAX NEWS - FIRST-TIME HOME BUYER SAVINGS ACCOUNT

Wed, 11 Feb 2015 17:22:45 GMT

Beginning with taxable year 2014, Virginia allows a subtraction for gains from home buyer savings accounts that were taxed for federal purposes. An individual may designate one or more accounts at a financial institution as a first-time home buyer savings account. Distributions from an account must be used for the sole purpose of paying or reimbursing the down payment and allowable closing costs for the purchase of a single-family residence in Virginia by a qualified beneficiary.

More information on subtraction and addition requirements related to home buyer savings accounts is available in your form instructions.

VA TAX NEWS - ONLINE ACCESS TO FORM 1099G/1099INT

Wed, 11 Feb 2015 17:22:04 GMT

Did you receive a refund from a return claiming itemized deductions filed in 2014? Or were you paid refund interest on a Virginia income tax refund issued during 2014? If so, you can access your Form 1099G/1099INT by visiting our webpage.

VA TAX NEWS - CHANGES TO INDIVIDUAL INCOME TAX RETURNS

Wed, 11 Feb 2015 17:20:45 GMT

A new Schedule VAC was created to allow taxpayers to contribute all or part of their income tax refunds to one or more of their Virginia529^SMaccounts. Virginia529^SMis a college savings plan that offers tax-advantaged savings for qualified higher education expenses. Programs include Virginia529 prePAID^SM, Virginia529 inVEST^SM, CollegeAmerica®, and CollegeWealth®. Other Voluntary Contributions, which were previously reported on the Schedule ADJ, have been moved to the Schedule VAC.
The field for political contribution credit has been moved from the Schedule CR to the tax return.
Did you purchase merchandise by Internet, telephone or mail, or outside Virginia without being charged sales tax? If so, you may owe Consumer's Use Tax on those purchases. Use the new Consumer's Use Tax line in the return to report any amount you may owe.

VA TAX NEWS - FINAL REMINDER: FILE 2014 ANNUAL WITHHOLDING RECONCILIATIONS, WAGE STATEMENTS AND PAYMENTS BY FEB. 2

Fri, 30 Jan 2015 13:47:14 GMT

Employers must electronically file all 2014 annual withholding tax reconciliations and pay any amounts due by Feb. 2, 2015. This includes Form VA-6 or Form VA-6H and any required wage statements, such as Form W-2 or Form 1099.

Annual withholding tax reconciliation returns are now due on Jan. 31 instead of Feb. 28. However, because Jan. 31, 2015 is a Saturday, taxpayers will have until Monday Feb. 2, 2015 to file and pay their annual 2014 withholding tax reconciliation.

Don't wait to file! Returns received after the new due date will be considered late. If you need help choosing an electronic filing or payment option that works best for you, visit the Virginia Department of Taxation's Withholding Tax FAQ page.

VA Tax News - E-File for Virginia Individual Income Tax Returns Started Jan. 20

Mon, 26 Jan 2015 15:01:17 GMT

The Virginia Department of Taxation began accepting 2014 state individual income tax returns on Tuesday, Jan. 20, the same day as the Internal Revenue Service.

This e-Alert contains filing tips and other information designed to help taxpayers prepare their individual income tax returns. If you are a tax preparer, you may wish to keep this information in mind when assisting your clients.

VA Tax News - New Pass-through Entity eForms Available Online

Thu, 18 Dec 2014 19:36:48 GMT

The Virginia Department of Taxation recently announced a new electronic filing requirement for pass-through entities (PTEs) required to file Form 502 (Pass-through Entity Return of Income and Return of Nonresident Withholding Tax). The requirement goes into effect Jan.1, 2015 and applies to all PTE returns and payments for taxable year 2014 and later.

Please note: The eFile requirement applies to all PTEs required to file Form 502, regardless of whether they owe a balance of tax with their returns.

To help taxpayers file returns and make payments electronically, the department now offers several new PTE eForms on its website:

eForm 502EZ (Short Return of Income and Return of Nonresident Withholding Tax): A return for eligible taxpayers to file Form 502 and required VK-1 (Owner's Share of Income and Virginia Modifications and Credits) statements. Taxpayers may also make a return payment if they compute an amount due with their return.
eForm 502W (PTE Withholding Payment): An eForm voucher for PTE taxpayers who need to make an extension payment towards the withholding due for nonresident owners of the PTE.
eForm 502V (PTE Payment Voucher): An eForm voucher for taxpayers who have filed Form 502 and need to make a return payment.

All eForm options are free, available 24/7 and do not require registration or login credentials.

PTEs may also file and make return payments electronically using commercial eFile software. Check out a description of commercial eFile software, a list of approved software products, information about making payments by direct debit, and more at the PTE eFile page.

PTEs that are unable to file and pay electronically should request a waiver. For additional questions or assistance, please call Customer Services at (804) 367-8037, Monday through Friday, 8:30 a.m. to 5 p.m.

VA Tax News - Pass Through Entity Tax Reminder

Mon, 08 Dec 2014 14:11:10 GMT

Pass-through entity returns (Form 502) are due on or before Dec. 15, 2014 from:

Fiscal year filers whose taxable year ends on Aug. 31, 2014.
Fiscal year filers whose taxable year ends on Feb. 28, 2014 and who are filing under Virginia's automatic six-month extension.

Virginia Automatic Extension Reminder: Virginia law provides for an automatic six-month extension from the original due date for filing. To take advantage of the automatic extension, the return must be filed on or before the end of the extension period. Please note: The automatic extension does not allow for additional time to pay any balance of tax due. Penalty and/or interest may apply to returns with a tentative tax due that was not paid by the original due date for filing the return. Also, the extension penalty may apply to returns that were filed during the extension period if less than 90 percent of the return's total tax liability was paid by the original due date.

For details regarding pass-through entity filing extensions and penalties visit the Department of Taxation's Pass-through Entity web page.

Remember: It's very important that the Department maintains accurate information regarding taxpayer businesses. Many tax account updates can be performed through the Department's Business iFile system. Visit the Online Services FAQ web page for information on what updates taxpayers can make through Business iFile.

VA Tax News - Pass-Through Entity Filing Reminders

Wed, 05 Nov 2014 16:58:00 GMT

Pass-through entity returns (Form 502) are due on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers whose taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension

For details regarding pass-through entity filing extensions and penalties, visit the Department's Pass-Through Entity web page.

VA Tax News - Corporation Income Tax Filing Reminders

Wed, 05 Nov 2014 16:54:31 GMT

Corporate Income Tax returns (Form 500) are due electronically on or before November 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014,
Fiscal year filers whose taxable year ends on January 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

Corporation Income Tax returns (Form 500) are due electronically on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers who taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

Corporation Income Tax returns (Form 500) are due electronically on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers who taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

Corporation Income Tax returns (Form 500) are due electronically on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers who taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

Corporation Income Tax returns (Form 500) are due electronically on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers who taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

Corporation Income Tax returns (Form 500) are due electronically on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers who taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

Corporation Income Tax returns (Form 500) are due electronically on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers who taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

Corporation Income Tax returns (Form 500) are due electronically on or before Nov. 15, 2014 from:

Fiscal year filers whose taxable year ends on July 31, 2014.
Fiscal year filers who taxable year ends on Jan. 31, 2014 and who are filing under Virginia's automatic six-month extension.

For details regarding Corporation Income Tax extensions and penalties, or for information on how to file and pay electronically, visit the Department's Corporation Income Tax web page.

VA Tax News - Live Chat Service to be Eliminated (effective 12/31/14)

Wed, 05 Nov 2014 16:53:37 GMT

Live Chat will no longer be available after Dec. 31, 2014 due to required budget reductions at the Virginia Department of Taxation.

For assistance, please call our Customer Support Center, Monday through Friday from 8:30 a.m. to 5 p.m. at (804) 367-8031 for individuals, (804) 367-8037 for businesses or (804) 367-8045 for collections.

You may also send us a secure email for matters that are not time sensitive. For more information, see Contact Us on our website.

VA Tax News - Virginia Income Tax Treatment for Virginia Income Tax Purposes

Tue, 07 Oct 2014 18:06:50 GMT

On October 6, 2014, the United States Supreme Court denied certiorari in the case from the Fourth Circuit Court of Appeals that recently held that Virginia's ban on same-sex marriage is unconstitutional. Accordingly, same-sex marriages that are recognized for federal income tax purposes will now be recognized for Virginia income tax purposes.

As a result, same-sex couples who are legally married under state law may file joint Virginia income tax returns, and compute items on their Virginia income tax returns as married individuals. Alternatively, such couples may file their Virginia income tax returns as married couples filing separately. Tax Bulletin 14-7 supercedes Tax Bulletin 13-13.

To view the full text of this tax bulletin, click here.

If you have additional questions, please visit the Department's website at http://www.tax.virginia.gov, or contact the Department at (804) 367-8031.

VA Tax News - Back-to-School Sales Tax Holiday Returns Aug 1-3

Thu, 31 Jul 2014 12:42:22 GMT

Virginia's popular back-to-school sales tax holiday for clothing, footwear and school/office supplies begins Friday, Aug. 1, and runs through Sunday, Aug. 3.

This is the ninth year for the three-day event, during which most school supplies that cost $20 or less each, as well as clothing items and pairs of shoes priced at $100 or less each will be exempt from Virginia's 5.3 percent state and local sales tax. You'll save even more in most Northern Virginia and Hampton Roads localities, where the sales tax is 6 percent. For example, if you spend $500 on qualifying items during the sales tax holiday, you'll save $26.50 on exempt purchases. You'll save $30 in Northern Virginia and Hampton Roads.

The list of tax-exempt items is the same as last year. It includes, for example, pens, pencils, loose leaf ruled notebook paper, scissors, binders, backpacks, construction paper, sneakers, hats, shirts, dresses, jeans, bathing suits, diapers, T-shirts, and many other items. There is no requirement that the purchases be made for school purposes. All retailers who sell the exempt items are required to participate.

The tax-exempt items are available to anyone shopping in the state, and there is no limit on the number of products you can buy tax-free as long as each one qualifies under the guidelines.

If you can't get out to the stores, but still want to shop and save, online purchases of qualifying items are also tax-exempt during the sales tax holiday.

During this sales tax holiday, retailers may also choose to save taxpayers even more money by absorbing, or paying themselves, the sales tax on items that are not eligible for exemption. In past years, many stores have taken advantage of this opportunity and some have sold everything in their stores tax-free.

An all-inclusive list of school supplies, a list of exempt clothing and footwear items, guidelines for shoppers and retailers, and answers to frequently asked questions are available on the Department of Taxation's Sales Tax Holiday Information Center.

VA Tax News - Notice of Withholding Due Date Change for Employers

Mon, 28 Jul 2014 19:51:30 GMT

The due date for filing the Employer's Annual or Final Summary of Virginia Income Tax Withheld return (Form VA-6), Household Employer's Annual Summary of Virginia Income Tax Withheld return (Form VA-6H), and required wage statements (Forms W-2 and 1099) has been changed from February 28 to January 31.

By law, a return due on a Saturday, Sunday, or legal holiday becomes due the next business day. Because January 31, 2015 is a Saturday, the actual due date for the 2014 annual withholding forms and wage statements described above will be Monday, February 2, 2015.

The Virginia General Assembly approved the due date change during the 2014 session to allow for faster and more secure processing of individual income tax refunds.

Please note: If a business closes its withholding tax account before the end of the year, the employer must file Form VA-6 or VA-6H and the required wage statements within 30 days of the last month in which wages were paid. Employers are required to submit all withholding returns and W-2 wage statements electronically.

For electronic filing and payment options, please see the Department of Taxation's Business Online Services page.

VA Tax News - Tax Credit Cap for Taxable Year 2014 Increased

Thu, 24 Jul 2014 17:01:15 GMT

Under Va. Code § 58.1-339.4(E), the Qualified Equity and Subordinated Debt Investments Tax Credit is capped at $5 million annually. However, beginning with Taxable Year 2006, budget actions have imposed a lower tax credit cap for certain taxable years. For Taxable Year 2013, the tax credit cap was limited to $4.5 million. Under the amended budget bill for the 2012-2014 biennium (2014 House Bill 5001) and the budget bill for the 2014-2016 biennium (2014 House Bill 5002), the tax credit cap will increase to $5 million for Taxable Year 2014. For taxable years after 2014, the tax credit cap will remain at the statutory cap of $5 million.

To view the full text of this tax bulletin, click here.

If you have additional questions, please visit the Department's website at http://www.tax.virginia.gov, or contact the Department at (804) 404-4163.

VA Tax News - Walk-In Customer Service Center Closed

Thu, 10 Jul 2014 18:11:56 GMT

The Virginia Department of Taxation's Walk-In Customer Service Center in Richmond is now closed.

For assistance, taxpayers can speak with Customer Services representatives from 8:30 a.m. to 5 p.m., Monday through Friday, at the following phone numbers:

Individual: (804) 367-8031
Business: (804) 367-8037

Live Chat service is available during the same hours. Taxpayers can also ask questions using secure email.

Payments can be made at the Cashier's Office, located at 1957 Westmoreland Street in Richmond, from 8:30 a.m. to 5 p.m., Monday through Friday.

More contact information is available here.

VA Cooperative Extension in Arlington is seeking Financial Education Volunteers

Wed, 04 Jun 2014 17:02:00 GMT

The Virginia Cooperative Extension is recruiting professionals to volunteer as Master Financial Educators in Arlington and the City of Alexandria. Would ASV be willing to share our volunteer recruitment drive with your Northern Virginia members?

We will have mandatory volunteer training sessions on Saturday Sept. 6 and Saturday Sept. 13 from 10 a.m.-4 p.m. at the Fairlington Community Center Room 100, 3308 S Stafford Street in Arlington.

Master Financial Education Volunteers provide valuable services such as:

-- One-on-one financial counseling with clients who range from young professionals to senior citizens

-- Financial management classes on topics including spending and saving

-- Financial education for children, including financial simulations for elementary and middle school-aged children

-- Tax clinics for low-income individuals

-- Create your own financial education program

The Extension has a strong need of Spanish-speaking volunteers.

To learn more about volunteering with Extension, or to sign up for the September training, please contact Megan Kuhn at megan81@vt.edu or call 703-228-6421.

VA Tax - 2014 Accelerated Sales Tax Guidelines Released

Thu, 08 May 2014 12:06:10 GMT

The Department of Taxation ("the Department") has published updated Accelerated Sales Tax Guidelines. The updated guidelines supersede any prior guidelines that were published by the Department.

Effective beginning with the accelerated sales tax payment due in June, 2014, House Bill 1500 (Acts of Assembly 2013, Chapter 806) and House Bill 5001 (Acts of Assembly 2014 Special Session I, Chapter 1) increase the threshold for the 2014 accelerated sales tax payment to taxable sales and/or purchases of $48.5 million or greater in the previous fiscal year. Dealers and direct payment permit holders ("Dealers") meeting this threshold are required to make an accelerated sales tax payment in June equal to 90 percent of their Retail Sales and Use Tax liability for June of the previous year.

The Guidelines for the Accelerated Sales Tax Payment have been updated to reflect the increased threshold and payment dates for 2014. The full text of the Guidelines are available here and in the Laws, Rules & Decisions section of the Department's website as Public Document 14-58. The Department has mailed notification letters to all affected dealers. More information on the Accelerated Sales Tax can be found on the Department's website at www.tax.virginia.gov.

Where to Find the Published Guidelines

The guidelines have been published on the Laws, Rules and Decisions section of the Department's website and on the Virginia Regulatory Town Hall website.

VA Tax - Virginia's Income Tax Treatment of Same-Sex Marriage

Thu, 09 Jan 2014 22:04:18 GMT

The Virginia income tax treatment of same-sex marriage may impact the fringe benefit business deductions of certain corporations, pass-through entities, and sole proprietorships. See the Department's website for details.

VA Tax - Corporation Income Tax Filing Reminders

Thu, 09 Jan 2014 22:03:35 GMT

Corporation Income Tax returns (Form 500) are due electronically on or before Jan. 15, 2014from:

Fiscal year filers whose taxable year ended on Sept. 30, 2013.
Fiscal year filers whose taxable year ended on March 30, 2013 and who are filing under Virginia's automatic 6-month extension.

Virginia Automatic Extension Reminder:

Virginia law provides for an automatic 6-month extension from the original due date for filing. In order to take advantage of the automatic extension, the return must be filed on or before the end of the extension period. Please note: The automatic extension does not allow for additional time to pay any balance of tax due. Penalty and/or interest may apply to returns with a tentative tax due that was not paid by the original due date for filing the return. Also, the extension penalty may apply to returns that were filed during the extension period if less than 90 percent of the return's total tax liability was paid by the original due date.

For details regarding Corporation Income Tax extensions and penalties or for information on

how to file and pay electronically, visit the Department's Corporation Income Tax web page. Additional electronic filing information is posted on the Department's Corporate e-File web page.

Electronic Filing Mandate Reminder: All taxpayers that are subject to the Corporation Income Tax must file their estimated tax payments, annual income tax returns, and final payments electronically. This includes taxable year 2012/2013 returns, tax-due payments, and extension payments, as well as taxable year 2013/2014 estimated payments. Taxpayers subject to the Corporation Income Tax that are seeking a waiver of the requirement to file and/or pay electronically due to undue hardship should submit the Virginia Corporation Electronic Filing Waiver Request form.

Remember: It is very important that the Department maintains accurate information regarding taxpayer businesses. Many tax account updates can be performed through the Department's Business iFile system. Visit the Online Services FAQ web page for information on what updates taxpayers can make through Business iFile

VA Tax - New e-File Options Video and Demo Presentation Now Available

Fri, 13 Sep 2013 15:23:46 GMT

Employers who file and pay Withholding Tax in Virginia are now required to do so electronically. To help customers meet the electronic filing mandate, the Department created an informational YouTube video and a demo presentation to explain the requirements and the free online systems available 24/7 for our customers.

Want a general overview of the mandate and available electronic filing methods? Watch the File and Pay Withholding Tax Electronically video to help choose the option that best meets your needs.

Have you already chosen an electronic filing method, but are confused on how to use it? View the demo presentation for a walkthrough of the available filing options.

VA Tax - Corporation Income Tax Filing Reminders & Common Filing Errors

Thu, 05 Sep 2013 12:55:26 GMT

All taxpayers subject to the Corporation Income Tax must file their estimated tax payments, annual income tax returns, and final payments electronically. This includes Taxable Year 2012 returns, tax payments, and extension payments, as well as Taxable Year 2013 estimated payments. For information on how to file and pay electronically, see the Department's Corporate e-File and Corporation Income Tax pages.

Please note: Taxpayers subject to the Corporation Income Tax that are seeking a waiver of the requirement to file and/or pay electronically due to undue hardship should submit the recently updated

Virginia Corporation and Pass-Through Entity Electronic Filing Waiver Request Form.

Corporation Income Tax returns for the taxable year ending on May 31, 2013, must be filed on or before September 16, 2013. Virginia law also provides for an automatic six-month extension of time to file. However, the extension does not allow for additional time to pay any balance of tax due. Penalty and/or interest may apply to returns with a tentative tax due that was not paid by the original due date for filing.

The automatic six-month extension to file Corporation Income Tax returns for the taxable year ending on November 30, 2012, ends on September 16, 2013. In order to take advantage of Virginia's automatic extension, the return must be filed on or before the end of the extension period. Please bear in mind that the extension penalty may apply to returns filed during the extension period if less than 90 percent of the return's total tax liability was paid by the original due date. For more details regarding Corporation Income Tax extensions and penalties, visit the Department's Corporation Income Tax page.

Remember: it is very important that the Department maintains accurate information regarding taxpayer businesses. Many tax account updates can be performed through the Department's Business iFile system. Visit the Online Services FAQ for information on what updates taxpayers can make through Business iFile.

Common Corporation Income Tax Filing Errors

Below are some of the more common problems that the Department encounters with corporation income tax returns.

Use the proper return based on the entity type. Corporations should file Form 500 whereas pass-through entities should file Form 502. Also, choose the correct year's form for the return being submitted. All forms and instructions, including those for prior taxable years, are located on the Department's website.
Always notify the Department and the State Corporation Commission of any corporate name changes. If a corporation's name has changed from the name used on the last return filed, please check the "Name Change" box on the return to notify the Department.
If a corporation's physical address or mailing address is different from the address used on the last return filed, please check the applicable "Address Change" box.
Please be sure to verify that a corporation's nine-digit Federal Identification Number ("FEIN") was entered correctly on the return and that it is the correct number that was assigned to the corporation.
If your client has an electronic filing waiver and are submitting a paper tax return, ensure that the front and back pages are both sent (even if there are no entries on the back page). Also be sure that all required schedules are attached to the return.
If your client claims an addition, subtraction, or deduction please be sure to enter any required codes on the Schedule ADJ.
If your client claims an item requiring you to submit additional supporting documentation, such as tax-credit certificates or statements, please be certain that the documentation is attached to the return.
If estimated payments or extension payments are claimed on the return, please verify the amount of estimated or extension payments made during the year before filing the return.
If the Corporation Income Tax return that you are submitting is a "final return," do not request an overpayment credit. Request a refund instead.

VA Tax - Corporation Income Tax Filing Reminders

Tue, 02 Jul 2013 19:25:35 GMT

Corporation Income Tax returns for the taxable year ending on March 30, 2013, must be filed on or before July 15, 2013. Virginia law also provides for an automatic six-month extension of time to file. However, the extension does not allow for additional time to pay any balance of tax due. Penalty and/or interest may apply to returns with a tentative tax due that was not paid by the original due date for filing.

The automatic six-month extension to file Corporation Income Tax returns for the taxable year ending on September 30, 2012, ends on July 15, 2013. In order to take advantage of Virginia's automatic extension, the return must be filed on or before the end of the extension period. Please bear in mind, the extension penalty may apply to returns filed during the extension period if 90 percent of the return's total tax liability was not paid by the original due date. For more details regarding Corporation Income Tax extensions and penalties, visit the Department's Corporation Income Tax page.

VA Tax - Sales and Use Tax Electronic Filing Mandate for Quarterly Filers

Tue, 02 Jul 2013 19:24:49 GMT

The 2012 General Assembly passed a new mandate affecting Sales Tax dealers. Effective July 1, 2013, all dealers must file and pay Sales and Use Tax electronically. Dealers designated as Monthly filers were subject to electronic filing requirements beginning with their July 2012 returns.

Dealers who file on a quarterly basis will be required to file and pay electronically beginning with the July - September 2013 return, due October 21, 2013. Seasonal filers must file electronically beginning with the July 2013 return, due on August 20, 2013 or the first subsequent month the business has taxable sales. For those taxpayers transitioning to electronic filing and payment methods, please bear in mind the following information:

Pre-printed sales tax return coupons will no longer be mailed to taxpayers.
Sales tax returns must be submitted electronically each period they are due, even if there is no tax due for that month.
Returns and payments must be submitted electronically on or before the due date to be considered filed and paid on time.

Not all of the Department's electronic filing options offer the same electronic payment methods. Taxpayers should consider their preferred method of payment when selecting an option for electronic filing. See the below comparison guide for information on the payment methods supported for each filing option.

Filing Option	ACH Debit?	ACH Credit?
e-Forms	Yes	No
Business iFile	Yes	Yes
Web Upload	Yes	Yes

Click the name of any method in the above guide to start filing.

VA Tax - Sales Tax Question and Answer Summary Available

Tue, 25 Jun 2013 14:12:34 GMT

The Department's Sales and Use Tax Changes web page has been updated. The Question and Answer summary compiled from inquiries received during our Get Ready! Webinar on June 7, 2013 is now available.

A copy of the Department's June 18 e-Alert regarding the availability of the webinar recording and the topics it covered is provided below for reference.

If you were not able to attend our Get Ready! Webinar on June 7, 2013, or you would like to see the presentation again, the webinar recording is now available on our website.

The webinar presented a detailed overview of the sales and use tax changes from House Bill 2313, including:

Statewide and regional rate increases
Changes to returns and schedules (Forms ST-9 and ST-8)
Sourcing rules for intrastate and interstate transactions
Transitional provisions
Discussions of some of the questions submitted by attendees

A note about the webinar content: This broadcast, which was recorded on June 7, 2013, contains references to the Counties of Gloucester and Surry being in the list of localities included in the Hampton Roads Region. As explained in Tax Bulletin 13-8, published on June 13, 2013, Gloucester County and Surry County are not part of the Hampton Roads Region, and are not subject to the additional sales and use tax rate increase of 0.7 percent.

VA Tax - Virginia Sales and Use Tax Changes! - Webinar Recording

Tue, 18 Jun 2013 13:54:32 GMT

If you were not able to attend our Get Ready! Webinar on June 7, 2013, or you would like to see the presentation again, the webinar recording is now available on our website.

The webinar presented a detailed overview of the Sales and Use Tax changes from House Bill 2313, including:

Statewide and regional rate increases
Changes to returns and schedules (Forms ST-9 and ST-8)
Sourcing rules for intrastate and interstate transactions
Transitional provisions
Discussions of some of the questions submitted by attendees

A summary of over 100 questions received during the webinar, with responses, will be posted to our website shortly.

VA Tax - Reminder for Individuals Who Were Out of the Country on May 1, 2013

Mon, 03 Jun 2013 18:13:16 GMT

For calendar year filers who were out of the country on May 1, 2013, Taxable Year 2012 Virginia income tax returns are due by July 1, 2013. The extended due date for individuals who were out of the country on May 1, 2013, is January 1, 2014.

Virginia law allows an automatic six-month extension for filing Individual Income Tax returns, but requires that at least 90 percent of the final tax liability be paid by the original due date. Taxpayers who do not meet the payment requirement may be subject to the extension penalty. Visit the Department's website for more details on penalty and interest charges.

Special note for military service members: If you were out of the country pursuant to military orders, especially if you served in a combat zone, special extension provisions may apply. Visit the Military Tax Tips page on the Department's website for details.

VA Tax - New Cap for the Qualified Equity and Subordinated Debt Investments Tax Credit

Fri, 24 May 2013 18:25:40 GMT

The Qualified Equity and Subordinated Debt Investments Tax Credit is capped at $5 million annually by statute. However, beginning with Taxable Year 2006, budget actions have imposed a lower tax credit cap for certain taxable years. Under the budget bill for the 2012-2014 biennium (2013 House Bill 1500), the tax credit limit will be $4.5 million for Taxable Year 2013 and $5 million for Taxable Year 2014. For taxable years after 2014, the tax credit limit will remain at the statutory cap of $5 million, unless the General Assembly takes future action to change it. See Tax Bulletin 13-7 (P.D. 13-75) for complete information.

VA Tax - New Cap for the Land Preservation Tax Credit

Fri, 24 May 2013 18:25:07 GMT

On January 25, 2013, the Department of Taxation ("the Department") published Tax Bulletin 13-1 (Public Document 13-8, 1/25/13), which announced that the indexed tax credit cap for the Land Preservation Tax Credit for Calendar Year 2013 was $113,909,000. However, because House Bill 1398, enacted by the 2013 General Assembly, removed the Land Preservation Tax Credit cap's adjustment for inflation, the tax credit cap for Calendar Year 2013 and thereafter has been reduced to $100 million. See Tax Bulletin 13-6 (P.D. 13-74) for complete information.

VA Tax - 2013 Tax Preparer Survey

Mon, 20 May 2013 12:57:42 GMT

In an effort to gain an insight on the various aspects of our e-File process, the Virginia Department of Taxation will begin conducting an informal survey of tax preparers each year. Survey responses will be used to identify possible improvements to our e-File system for the upcoming tax season. While not all concerns may be addressed, the Department will make every effort to implement changes based on the input received.

The survey questions for 2013 can be found here.

Please e-mail your responses to ind_efile@tax.virginia.gov by May 24, 2013.

VA Tax - Special Announcement for Business iFile Users

Fri, 17 May 2013 21:55:14 GMT

Protecting your personal information and preventing identity theft is very important to the Department.

Over the next few weeks, the Department will be enforcing the current Commonwealth standard forpassword complexity in its Business iFile system. This affects all Business iFile users whose password does not currently meet these password complexity requirements, including users with Virginia Employment Commission accounts.

The password complexity standard is as follows:

Passwords must be between 8-12 characters in length with no spaces.
Passwords are case sensitive and cannot be the same as your User ID.
Passwords must contain at least 3 of the following characteristics: lower case letters, upper case letters, numbers or special characters $, #, %, (, &, ), +, !. Please note that periods and asterisks are not allowed as special characters.

Once this change is effective, Business iFile users with passwords that do not meet these requirements will be prompted to change their password upon their next Business iFile login. If your clients' password does not meet these requirements, you may wish to update it in advance of the upcoming changes.

For more information regarding how Business iFile could help you, go to the Business iFile FAQ.

VA Tax - Get Ready for the Virginia Sales and Use Tax Changes!

Fri, 17 May 2013 14:53:27 GMT

Free Webinar:

Get Ready for the Virginia Sales and Use Tax Changes!

Host: Virginia Department of Taxation

Date: Friday, June 7, 2013

Time: 1:00pm Eastern; 10:00am Pacific (60 minute session)

Register now

Sales tax rates will change on July 1, 2013 - are you ready? Join us for a free, one-hour webinar to explore the sales and use tax rate changes that take effect on July 1, 2013. During this interactive session, Virginia Department of Taxation staff members will guide you through the provisions of House Bill 2313, including:

Statewide and regional rate increases
Complete overview of associated changes to returns and schedules (Forms ST-9 and ST-8, available now)
Sourcing rules for intrastate and interstate transactions
Transitional provisions

Participants will be able to submit questions for discussion throughout the broadcast.

Who should attend? Retail dealers inside and outside Virginia and/or their tax accounting staff, tax professionals, and software vendors.

Space is limited - sign up today!

VA Tax - 2013 Hurricane Preparedness Sales Tax Holiday Guidelines Released

Wed, 15 May 2013 12:59:19 GMT

The Department has released Guidelines for the upcoming Hurricane Preparedness Sales Tax Holiday.

The holiday is a recurring, seven-day event beginning each year on May 25 and ending on May 31. During the holiday, portable generators with a selling price of $1,000 or less per item, and other hurricane preparedness items, including, for example, batteries, bottled water, flashlights, and weather band radios with a sales price of $60 or less per item may be purchased exempt of the Retail Sales and Use Tax.

The full text of the Guidelines is available in the Laws, Rules, and Decisions section of the Department's website as PD 13-71 or available on the Virginia Regulatory Town Hall here. Additional information may be found at:

http://www.tax.virginia.gov/site.cfm?alias=STHoliday

VA Tax - Filing Season Hours for Customer Service Representatives

Fri, 12 Apr 2013 20:12:05 GMT

A reminder: For the 2012 filing season, the Department's Customer Service telephone service hours for customers calling with general and account-specific questions are between 8:30 a.m. and 5:00 p.m. Monday through Friday. Our Live Chat service will be available even longer - from 8:00 a.m. to 8:00 p.m. Monday through Friday and from 8:30 a.m. to 12:00 noon on Saturdays.

Our contact information can be found here.

VA Tax - Virginia's Automatic Six-Month Filing Extension

Fri, 12 Apr 2013 20:11:08 GMT

The due date for filing your 2012 Virginia Individual Income Tax return is Wednesday, May 1, 2013. If you're thinking of taking advantage of Virginia's automatic six-month extension to file your Virginia taxes this year, here are a few reminders about the rules for automatic extensions.

The extension only covers time to submit your tax return. It does not allow you additional time to pay any balance of tax due. Payment for any tentative tax due must be submitted by May 1.
The due date for returns filed under extension is November 1, 2013. You do not need to submit an application for the extension - it is applied automatically as long as you file your return by the end of the extension period.
Interest will always apply to any tax amounts that are not paid by the original due date for filing. Interest will accrue from the original due date for filing through the date that all tax, penalty, and interest is paid in full.
The extension penalty applies to unpaid tax if 90 percent of your total tax liability is not paid by the original filing due date and you file during the automatic extension period. You will avoid the accrual of extension penalty by ensuring that 90 percent of your total tax due is paid by the original due date and by filing on or before the extended due date.
Failure to file during the automatic extension period will void the extension and reset your due date back to the original due date. The maximum late filing penalty of 30 percent will be assessed on the balance of tax due with your return.
Even if you file on time during the extension period, failure to pay the tax due with your filing will cause the late payment penalty to be assessed. In that circumstance, the late payment penalty will accrue at 6 percent per month on unpaid tax amounts, beginning with the date the return is filed. This is in addition to any extension penalty that may have already been assessed.
No penalty or interest are assessed on tax returns due a refund, regardless of whether they are filed during the extension period or after the extended due date.

The key to avoiding additional charges is to ensure that payment covering your entire tax due is submitted on or before the original due date for filing.

Extension payments to cover tentative tax due can be submitted by check or money order with Form 760 IP, or through the Online Services for Individuals area of the Department's Web site.

For additional information on the assessment of penalty and interest, please see the Department's website topic "Penalties and Interest." For general information on extension guidelines, computing tentative tax due, and making extension payments, see the Instructions for the 760 IP voucher.

VA Tax - Gov. McDonnell Signs Bill Advancing Date of Income Tax Conformity to Jan 2, 2013

Fri, 22 Feb 2013 16:25:25 GMT

Conformity to the Internal Revenue Code for Taxable Year 2012

Effective for taxable years beginning on and after January 1, 2012, Virginia's fixed-date of conformity to the terms of the IRC will advance from December 31, 2011, to January 2, 2013, with limited exceptions. Tax Bulletin 13-3 provides taxpayers with directions on how to reconcile this legislation with their 2012 Virginia income tax returns.

What's New for the Sales Tax

Wed, 06 Feb 2013 18:11:02 GMT

Quarterly Sales Tax filers will be required to file and pay Retail Sales and Use Tax (ST-9 and ST-9CO) electronically beginning with the July - September 2013 return, due October 20, 2013. Taxpayers who are unable to file and pay electronically by the effective date may request a hardship waiver.

Please review the Department's various electronic filing options for submitting return and payment information now before the requirement goes into effect. Returns and payments can be filed electronically using eForms, Business iFile or Web Upload.

Telework Expenses Addition

Wed, 06 Feb 2013 18:10:37 GMT

Taxpayers who claim the Virginia Telework Expenses Tax Credit are not allowed to exclude those expenses from Virginia Income. To the extent excluded from federal taxable income, any expenses incurred by a taxpayer in connection with the Telework Expenses Tax Credit must be added to the Virginia return.

Telework Expenses Tax Credit

Wed, 06 Feb 2013 18:09:48 GMT

The Telework Expenses Tax Credit is a new individual and corporate income tax credit for employers who incur eligible telework expenses pursuant to a telework agreement or conduct telework assessments. Taxpayers are required to apply to the Department of Taxation between September 1 and October 31 of the year proceeding the taxable year for which the tax credit is earned to reserve a portion of the credit. To qualify for a credit, the employer must enter into a signed telework agreement with the teleworking employee on or after July 1, 2012, but before January 1, 2017. This telework agreement must be in accordance with policies set by the Department of Rail and Public Transportation (DRPT) which are available on the Telework!VA website at www.teleworkva.org.

For details on this new credit and modifications to existing credits, see What's New for Tax Credits.

Advancement of Virginia's Fixed Date Conformity with the Internal Revenue Code

Wed, 06 Feb 2013 18:09:18 GMT

Virginia's date of conformity with the Internal Revenue Code (IRC) was advanced from December 31, 2010, to December 31, 2011, with limited exceptions. Virginia will continue to disallow federal income tax deductions for the 30% and 50% bonus depreciation allowed for certain assets and the five-year carryback of federal net operating loss deductions generated in taxable years 2008 or 2009. Also, Virginia will continue to disallow the income tax deductions related to applicable high yield discount obligations under IRC § 163(e)(5)(F). In addition, fixed date conformity adjustments continue to be required for Cancellation of Debt Income under IRC § 108(i), and the domestic production deduction under IRC § 199.

At the time the instructions went to print, the only required adjustments for "fixed date conformity" were those mentioned above. However, if federal legislation is enacted that results in changes to the Internal Revenue Code for the 2012 taxable year, taxpayers will be required to make adjustments to their Virginia returns that are not described in the instruction booklet. Information about any such adjustments will be posted on the Department's website at www.tax.virginia.gov.

Apportionment for Retail Companies

Wed, 06 Feb 2013 18:08:36 GMT

For taxable years beginning on or after July 1, 2012, but before July 1, 2014, retail companies are required to determine their Virginia taxable income by using an apportionment formula with a triple-weighted sales factor. A single sales factor apportionment formula will be phased in over a three-year period beginning as a triple-weighted sales factor, followed by a quadruple-weighted sales factor, and then a single sales factor for taxable years beginning on and after July 1, 2015.

Corporation Electronic Filing Requirement

Wed, 06 Feb 2013 18:07:54 GMT

The 2012-2014 Appropriations Act Item (273 of HB 1301 - Acts of Assembly 2012 Special Session I, Chapter 3) requires all corporations to file their estimated tax payments, annual income tax returns and final payments electronically beginning January 1, 2013. This includes Taxable Year 2012 returns, tax due payments, extension payments and Taxable Year 2013 estimated payments.

The annual corporate income tax return must be filed through the Federal/State e-File program, which is supported by numerous commercial software applications. For a list of approved commercial e-File software and more information, visit the Department's Corporate Income Tax page.

Tax due payments can be made through the e-File system as a direct debit or by an ACH Credit transaction initiated through the corporation's bank.

The Department provides two secure online options for electronically submitting estimated and extension payments, e-Forms and Business iFile. For more information and to determine the method that works best for you visit "Estimated and Extension Payments" on the Corporate Income Tax page of the Department's website. Estimated tax payments and extension payments can also be submitted by an ACH Credit.

Tax preparers who are unable to meet these requirements by the effective date may request a hardship waiver on behalf of any affected client. In cases involving multiple clients, the preparer can submit one Waiver Request Form for all of the affected clients by attaching a list of the corporations' Names and FEINs, and indicating whether the preparer has a Power of Attorney on file with the Department of Taxation for each client.

VA TAX - Estimated Tax Underpayment Penalty Relief

Mon, 04 Feb 2013 19:15:21 GMT

In response to recent action by the IRS, Virginia is providing relief from the estimated tax underpayment penalty for farmers, fishermen, and merchant seamen who are unable to file and pay their 2012 taxes by the March 1 deadline. In order to receive an automatic waiver of the estimated tax underpayment penalty, farmers, fishermen and merchant seamen must file their returns and pay the entire tax due by April 15, 2013.

Phone Scam Related to New Refund Debit Card

Wed, 30 Jan 2013 19:55:53 GMT

RICHMOND - The Virginia Department of Taxation has been alerted to a phone scam related to the new Virginia Tax Refund Debit Card.

The Department has received reports of phone calls being made to individuals, telling them that their "Way2Go prepaid MasterCard is locked for security reasons." The automated caller then tries to get the listener to divulge personal information.

This is a phone scam. The Department never makes automated calls and never solicits personal information in this manner. If you receive such a call, hang up immediately. If the call is recorded as a voice mail, delete it.

The Department goes to great lengths to protect the confidentiality and privacy of taxpayer information. This scam is not related in any way to the security of the new tax refund debit card or any information that taxpayers may submit to the Department. The Department cautions individuals never to give personal information to anyone calling unless they can verify the source.

A division of Xerox Corp. administers the new Virginia Tax Refund Debit Card and refers to it as the "Way2Go" card.

The Department is working with other government agencies, law enforcement, the debit card vendor, and the telephone companies involved to try and end the phone scam.

If you have questions, please contact the agency's Customer Services Department at (804) 367-8031.

Tips and Tools for Tax Professionals

Wed, 30 Jan 2013 18:11:48 GMT

If you aren't already, please consider taking advantage of the following resources/tools available to you:

Tax Professionals Hotline (804) 367-9286 - Open Monday through Friday, 8:30 AM to 4:30 PM to provide quick responses to your inquiries about client accounts or other tax questions for any tax type administered by the Department.

Tax Professionals Page on the Department's website - Provides electronic filing information, early release forms, instructional materials, and special contact information.

Laws, Rules and Decisions Page on the Department's website - Offers a variety of information, from Tax Bulletins to Legislative Summaries, to Rulings of the Commissioner. This is a great tool for researching the latest interpretations of Virginia tax law.

Other website features and services you may find helpful are the Department's "What's New" pages for both individual and business tax types, tax forms, the Department's online filing and secure messaging services, and agency publications, just to name a few.

Important Information Regarding the Land Preservation Income Tax Credit

Mon, 28 Jan 2013 19:55:01 GMT

Beginning with the 2008 calendar year, the $100 million cap for the Land Preservation Tax Credit must be increased annually to account for inflation. For the 2013 calendar year, the cap for the Land Preservation Tax Credit will be increased to $113,909,000. Tax Bulletin 13-1 explains the new cap amount for the 2013 calendar year.

To view the details of this Tax Bulletin, click here.

Tips and Tools for Tax Professionals

Thu, 17 Jan 2013 22:02:26 GMT

If you aren't already, please consider taking advantage of the following resources/tools available to you:

Tax Professionals Page on the Department's website - Provides electronic filing information, early release forms, instructional materials, and special contact information.

Spouse Tax Adjustment Information for Joint Filers

Thu, 17 Jan 2013 22:01:55 GMT

If filing a joint return on Form 760, your client may qualify for a reduction in net tax of as much as $259.00 by taking advantage of the Spouse Tax Adjustment (STA). Taxpayers must use Filing Status 2, and each spouse must have taxable income and their combined income must be at least $3,000.

As you know, married taxpayers filing separately automatically receive the benefit of a lower tax rate on each of their individual returns but when filing jointly and combining their income they must take the STA to receive the benefit of a lower tax rate.

The STA is calculated based on each spouse's portion of the joint Virginia Adjusted Gross Income (VAGI). To claim the STA for your clients, complete Form 760, Lines 16a and 16b using the spouses separate VAGI amounts. Verify that the total of the separate VAGIs equal the total on Form 760, Line 9. An STA calculator is located on the Department's website.

Important Information for Military Spouses

Thu, 17 Jan 2013 22:01:31 GMT

The Military Spouses Residency Relief Act provides exemptions from income and personal property taxes when certain criteria are met. Under this law the spouse of military service members do not automatically become liable for income and personal property taxes as Virginia residents when they are present in Virginia solely because their spouse is a member of the military serving in Virginia. Visit the Department's website for details.

Refund Expectations

Thu, 17 Jan 2013 22:00:52 GMT

The fastest way to get your clients their refund is to e-File their tax return and select Direct Deposit.

Refunds using any of the e-File options requesting a Direct Deposit take approximately 1 week.

Refunds using any of the e-File options requesting a Refund Debit Card take approximately 2 weeks.

Refunds from paper filed returns requesting a Direct Deposit take approximately 6 weeks.

Refunds from paper filed returns requesting a Refund Debit Card take approximately 7 weeks.

Important Reminder:

When selecting Direct Deposit, always clear the taxpayer's saved bank routing and account information from the previous year and reenter the information again for the current year.

Help Get Your Clients Ready to File Their Returns

Thu, 17 Jan 2013 22:00:01 GMT

Have your clients gather their tax records and information such as current banking information, change of address, income statements and any supporting documentation in advance and have everything that you will need when delivering their files to your office.
Especially make sure you have their birth date(s), current banking information, if they are using Direct Deposit, and any address changes before they leave your office.

Please make sure the client is aware of the two refund options and have them make the selection that works best for them.

Make sure your clients are aware that they can e-file and warehouse their payment for any date in the future right up to, and on, the due date.

e-File for the 2012 Taxable Year

Thu, 17 Jan 2013 21:59:12 GMT

NEW for e-File for the 2012 Taxable Year

All forms that can be e-Filed are now eligible. There are no longer requirements that will result in you having to file paper for your clients. You simply scan and attach all documentation, attachments, schedules, out-of-state tax returns, etc. to the file and submit. The scanning and attaching of required documentation is optional and will not prevent your client's return from being accepted if it is not attached. However, returns that require an attachment for which there is none, even though accepted, will result in a letter to your client requesting the missing attachment(s) and will delay their refund by approximately 30 days.

e-File Begins Accepting Returns Wednesday, January 30, 2013

You can expect to receive acknowledgement that your clients' e-Filed returns were accepted or rejected within 24 hours of transmission to the Department.

Electronic Filing Requirement - Individual Income Tax

Thu, 17 Jan 2013 21:58:44 GMT

If you prepare more than 50 Virginia individual income tax returns, then you are required to e-File all of your clients' returns. The only exceptions are if the taxpayer voluntarily opts out of having their return e-Filed.

Visit the Tax Professionals Page on the Department's website for more information and the list of 2012 approved software vendors.

The New Virginia Tax Refund Debit Card Replaces Paper Refund Checks

Thu, 17 Jan 2013 21:58:06 GMT

As a result of new legislation, Virginia is making a significant change in the way that your clients may receive their individual income tax refund, the Virginia Tax Refund Debit Card.

There are two options for receiving a refund, direct deposit and the new refund debit card. Both paper and software versions of the individual income tax returns require that one of these two options be selected. Requesting a paper refund check is no longer an option.

While using direct deposit is still the fastest method for receiving a refund, the refund debit card offers a more secure and convenient alternative to paper checks and takes about the same amount of time as the refund check did previously.

When gathering information to prepare your clients' returns, be sure to get the correct banking information and birth date(s). When selecting direct deposit, always verify the correct banking information with your clients and do not default to last year's information.

Please visit the Department's website for additional information such as, where and how to use the refund debit card, how to use the card for free, transactions with associated fees and the fee schedule, how the card works for joint filers and more.

Filing Threshold

Thu, 17 Jan 2013 21:57:24 GMT

The filing threshold amounts for taxable years 2012 and beyond have been increased. The new threshold for single individuals has increased from $11,650 to $11,950. The filing threshold for married couples filing jointly has increased from $23,300 to $23,900. The threshold for married couples who file separate returns has increased from $11,650 to $11,950.

For complete 2012 legislative information see the 2012 Legislative Summary on the Department's website.

Debit Card Option for Refunds

Thu, 17 Jan 2013 21:56:44 GMT

Effective beginning with the 2012 taxable year, individual refunds will be issued through prepaid debit cards or by direct deposit to taxpayers' checking or savings accounts. The paper check refund option is being replaced with the debit card option. Taxpayers receiving a refund may choose either to receive a debit card or direct deposit by filling in the requested information on their returns.

This change is one of the budget reduction measures included in the 2012-2014 Appropriations Act (273 of HB 1301 - Acts of Assembly 2012 Special Session I, Chapter 3) passed by the General Assembly. Visit www.tax.virginia.gov for detailed information and answers to frequently asked questions.

Advancement of Virginia's Fixed Date Conformity with the Internal Revenue Code

Thu, 17 Jan 2013 21:56:12 GMT

Virginia's date of conformity with the Internal Revenue Code (IRC) was advanced from December 31, 2010, to December 31, 2011, with limited exceptions. Virginia will continue to disallow federal income tax deductions for bonus depreciation allowed for certain assets under IRC §§ 168(k), 168(l), 168(m), 1400L and 1400N; the five-year carryback of federal net operating loss deductions generated in taxable year 2008 or 2009; and federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F).

In addition, fixed date conformity adjustments continue to be required for Cancellation of Debt Income under IRC § 108(i), and the domestic production deduction under IRC § 199.

At the time this message was written, the only required adjustments for "fixed date conformity" were those mentioned above. However, if federal legislation is enacted that results in changes to the Internal Revenue Code for the 2012 taxable year, taxpayers will be required to make adjustments to their Virginia returns that are not described in the instruction booklet. Information about any such adjustments will be posted on the Department's website at www.tax.virginia.gov.

Submit VK1s Electronically Using Web Upload

Wed, 16 Jan 2013 19:47:18 GMT

Web Upload is a free, easy, and secure way to electronically submit VK1s. When using Web Upload, you no longer have to print, package and mail your VK1s. Simply upload your electronically-stored VK1 data. All Web Upload file types are supported. Excel files may only contain up to 65,536 records (this is an Excel limitation).

All PTE returns and schedules must be filed on paper, so simply mark the VK1s filed via Web Upload box on Form 502. Your return and VK1 document will be matched up in processing.

Visit the Web Upload page of the Department's website for complete information on submitting your VK1 file.

Telework Expenses Addition

Wed, 16 Jan 2013 19:45:00 GMT

Taxpayers who claim the Virginia Telework Expenses Tax Credit are not allowed to exclude those expenses from Virginia taxable income. To the extent excluded from federal taxable income, any expenses incurred by a taxpayer in connection with the Telework Expenses Tax Credit must be added to the Virginia return.

Telework Expenses Tax Credit

Wed, 16 Jan 2013 19:44:26 GMT

Taxpayers are required to apply to the Department of Taxation between September 1 and October 31 of the year preceding the taxable year for which the tax credit is earned to reserve a portion of the credit.

To qualify for a credit, the employer must enter into a signed telework agreement with the teleworking employee on or after July 1, 2012, but before January 1, 2017.

This telework agreement must be in accordance with policies set by the Department of Rail and Public Transportation (DRPT) which are available on the Telework!VA website at www.teleworkva.org.

For details on this new credit and modifications to existing credits, see What's New for Tax Credits.

Advancement of Virginia's Fixed Date Conformity with the Internal Revenue Code

Wed, 16 Jan 2013 19:43:55 GMT

Virginia's date of conformity with the Internal Revenue Code (IRC) was advanced from December 31, 2010, to December 31, 2011, with limited exceptions.

Virginia will continue to disallow federal income tax deductions for the 30% and 50% bonus depreciation allowed for certain assets and the five-year carryback of federal net operating loss deductions generated in taxable years 2008 or 2009.

Also, Virginia will continue to disallow the income tax deductions related to applicable high yield discount obligations under IRC § 163(e)(5)(F).

In addition, fixed date conformity adjustments continue to be required for Cancellation of Debt Income under IRC § 108(i), and the domestic production activities deduction under IRC § 199.

At this time, the only required adjustments for "fixed date conformity" were those mentioned above.

However, if federal legislation is enacted that results in changes to the Internal Revenue Code for the 2012 taxable year, taxpayers will be required to make adjustments to their Virginia returns that are not described in the instruction booklet. Information about any such adjustments will be posted on the Department's website.

Apportionment for Retail Companies

Wed, 16 Jan 2013 19:43:12 GMT

For taxable years beginning on or after July 1, 2012, but before July 1, 2014, retail companies are required to determine their Virginia taxable income by using an apportionment formula with a triple-weighted sales factor.

A single sales factor apportionment formula will be phased in over a three-year period beginning as a triple-weighted sales factor for taxable years beginning on or after July 1, 2012, but before July 1, 2014, followed by a quadruple-weighted sales factor for taxable years beginning on or after July 1, 2014, but before July 1, 2015, and then a single sales factor for taxable years beginning on and after July 1, 2015.

Corporate Electronic Filing Requirement

Mon, 14 Jan 2013 21:36:45 GMT

The 2012-2014 Appropriations Act Item (273 of HB 1301 - Acts of Assembly 2012 Special Session I, Chapter 3) requires all corporations to file their estimated tax payments, annual income tax returns and final payments electronically beginning January 1, 2013. This includes Taxable Year 2012 returns, tax due payments, extension payments and Taxable Year 2013 estimated payments.

The annual corporate income tax return must be filed through the Federal/State e-File program, which is supported by numerous commercial software applications. For a list of approved commercial e-File software and more information, visit the Department's Corporate Income Tax page.

Tax due payments can be made through the e-File system as a direct debit or by an ACH Credit transaction initiated through the corporation's bank.

The Department provides two secure online options for electronically submitting estimated and extension payments, e-Forms and Business iFile. For more information and to determine the method that works best for you visit "Estimated and Extension Payments" on the Corporate Income Tax page of the Department's website. Estimated tax payments and extension payments can also be submitted by an ACH Credit.

Corporations unable to file and pay electronically by the effective date may request a waiver.

Corporate Return Filing Deadline Reminder

Mon, 14 Jan 2013 21:35:16 GMT

Corporate returns for the taxable year ending September 30, 2012, must be filed on or before January 15, 2013.

Even though Virginia law provides for an automatic six-month extension, it is an extension to file, not an extension to pay. At least 90 percent of the total tax liability for the taxable year must be paid on or before the due date of the return. Visit the Corporate Income Tax page of the Department's website for more information.

Corporate returns for the taxable year ending March 31, 2012 for which an extension of time to file was taken must also be filed on or before January 15, 2013.

Virginia's Corporate Electronic Filing Requirement - Submission of Waiver Requests by Tax Preparers

Thu, 08 Nov 2012 16:49:20 GMT

The Virginia Department of Taxation would like to clarify how Tax Preparers should submit the Corporate Income Tax Electronic Filing Waiver Request on behalf of their clients.

Complete a single Corporate Income Tax Electronic Filing Waiver Request Form.
Attach a list of the Corporations for which you prepare tax returns and/or submit payments and include the following information for each corporation.
- Corporation Name
- Corporation FEIN
- Indicate whether you have a Power of Attorney for each client
Fax the Waiver Request and list to 804-367-3015
The Department will issue a single waiver to the tax preparer covering all their clients.

Listed below are some valid reasons for which a Tax Professional would request a waiver.

The Tax Preparer’s software does not support electronic filing
The cost to purchase software supporting e-File would be a cost burden on the firm.
The fact that the IRS does not support a specific federal form or schedule through their e-File program is not a valid reason for a waiver on its own merit. Since Virginia’s e-File program supports PDF attachments, the federal return or form can be attached as a PDF and filed as an “unlinked” return to Virginia. Please check with your software company as to whether they support both linked and unlinked returns.
- If you do not have a scanner or other means to produce a PDF, then request a waiver.
- If your software does not support unlinked filing of returns to the state, then request a waiver.

If you have any questions, please direct them to Nancy Wilson at nancy.wilson@tax.virginia.gov.

The Virginia Tax Refund Debit Card

Thu, 08 Nov 2012 16:48:29 GMT

The Virginia Department of Taxation is implementing a significant change in the way individual income tax refunds are issued, and we need your help to prepare your clients for choosing the best option for their 2012 refunds.

As required by the 2012-2014 Appropriations Act, there will be two options on 2012 returns for receiving individual income tax refunds - direct deposit or debit card. Both paper and software versions of the individual income tax returns will require that one of these two options be selected. Requesting a paper check in preference to direct deposit or a debit card will not be an option.

To ensure the smoothest possible transition from the use of paper checks, we ask your help with two critical areas. First, ensure that you obtain accurate dates of birth, addresses, and telephone numbers from each of your clients, as well as complete and correct bank account information for those who wish to use direct deposit. Second, educate your clients about the refund options on the return. If your clients routinely drop off their information for return preparation without a face-to-face consultation, you may want to notify them of the changes to required information in advance. We hope the following information will be helpful to share with your clients.

Why was the law changed? The Department of Taxation issues over a million income tax refund checks each year. The switch to debit cards will save the Commonwealth of Virginia money by reducing check printing and mailing costs. The Department of Treasury has partnered with Xerox State and Local Solutions, Inc. to administer the tax refund debit card program at no cost to the Commonwealth. Issuing debit cards to individuals who do not choose direct deposit on their 2012 returns will reduce the Treasury’s annual costs by $200,000.

What are the benefits of each option for Virginia taxpayers? Direct deposit is still the fastest method for receiving a refund, provided accurate bank account information is entered on the return, so be sure to check your bank information carefully before filing your return. For individuals who prefer not to use direct deposit, the refund debit card offers a more secure and convenient alternative to paper checks that also lets the recipient avoid check-cashing fees.

Is the Virginia Tax Refund Debit Card secure? The Virginia Tax Refund Debit Card is the equivalent of a bank account with a MasterCard® bank, and is protected by federal and state banking laws. The card itself can be activated only by using the recipient’s identifying information, including social security number and date of birth. Once activated, the card can be used only with a personal identification number (PIN) chosen by the recipient.

How can the debit card be used? The card can be cashed at any MasterCard® bank, or it can be used like a regular debit card at retail stores and ATMs, or to make transactions online. Unlike some types of debit cards, the Virginia Tax Refund Debit Card is valid only until the refund amount has been exhausted. The card cannot be reloaded.

Are there fees associated with using the debit card? Many transactions are free, such as a one-time withdrawal of funds or cash back with a purchase, but there are fees for some other transactions. A fee schedule is available on our website.

How will debit cards work for a joint refund? In the case of a joint return, a debit card will be issued to each spouse to enable both spouses to access their joint refund. The refund itself cannot be divided between the spouses. Instead, the couple will access their funds as they mutually agree, just as they would have done with a paper check.

We have attached two flyers (Refund Options Flyer and Debit Card Overview) that you may find helpful to distribute within your organization, as well as to any members or clients that you serve. One provides a basic overview of the refund options, and the other addresses the changes in more detail, including frequently asked questions about the Virginia Tax Refund Debit Card.

Please share this information with your clients to help them understand their refund options for 2012, and make them aware of the change from paper checks to debit cards. We will continue to add information to our website, including Frequently Asked Questions, links to the Xerox website and other helpful resources. If you have questions in the meantime, feel free to call our Tax Professionals Hotline at (804) 367-9286.

Common Corporation Income Tax Filing Errors

(Past member) — Fri, 02 Mar 2012 20:38:42 GMT

These issues reflect some of the more common problems we encounter with corporate income tax returns.

If your corporate name has changed from the previous year when you filed the return, please check the “Name Change” box on the return. You should notify the Department of Taxation of any name change, in addition to the Virginia Corporation Commission.
If your physical address or mailing address is different from the previous year when you filed their last return, please check the applicable “Address Change” box.
Please be sure to verify that the nine-digit Federal Identification Number (FEIN) was entered correctly on the return and it is the correct number assigned to your corporation.
If you are claiming a subtraction, deduction or a credit, please be sure to attach the supporting documentation. This documentation could be a Schedule ADJ or Schedule CR. Also provide supporting documentation such as tax-credit certificates and statements.
If estimated payments or extension payments are being claimed on the return, please verify the amount of estimated or extension payments made during the year before filing the return.
If you are claiming a subtraction, deduction, or contribution, please enter the valid codes on the Schedule ADJ.
When submitting a paper tax return to the Virginia Department of Taxation, please ensure the front page and the back page are both sent (even if there are no entries on the back page). Keep in mind, Virginia now accepts Corporation Income Tax returns through our e-File program. For more information, see our Corporate Income Tax e-File page.
When submitting a corporation tax return, please use the correct form for the year the return is being submitted.
Please be sure to use the proper return based on your company’s entity type. Corporations should be fling form 500 whereas a pass-through-entity should be filing form 502. All forms can be located on our website.
If the corporation return that you are submitting is a “final return” please do not request an overpayment credit. Just request a refund.

Please ensure you have registered with the Department of Taxation prior to submitting your corporation tax return. You may register the business online using our iReg system. Notifying the Virginia Corporation Commission does not automatically register you with the Department of Taxation.

Reporting Pass-Through Entity Withholding Tax on Form 502

(Past member) — Fri, 02 Mar 2012 20:35:34 GMT

As a general rule, pass-through entities are required to withhold tax on the Virginia taxable income they pass through to their nonresident owners. The Department of Taxation offers the following tips for reporting the tax on Form 502:

Keep in mind that the tax payment for 2011 is due on April 16, 2012, even if the entity takes advantage of the automatic six-month filing extension for its Form 502.

The tax is reported and reconciled on page 2, Section 1, of Form 502.

On line 1, enter the total tax actually withheld for nonresident owners. Do not include tax amounts that would have been withheld for owners who are exempt from the withholding requirement, or personal estimated tax payments made by the owners themselves.

Line 2 must be completed if the Form 502 is being filed after April 16. Use this line to report the tax that was paid prior to filing Form 502.

Line 3 will reflect an overpayment if the payment amount on line 2 is greater than the tax liability reported on line 1. If line 2 is less than line 1, enter the balance of tax due on line 4.

If the return is filed after April 16 and the amount of tax due reported on line 4 represents more than 10 percent of the total tax liability reported on line 1, the entity may be subject to a penalty.

For complete information on the withholding requirements for pass-through entities, see the instructions for Form 502 on our website.

VA Income Tax Changes for 2011

(Past member) — Fri, 02 Mar 2012 20:33:02 GMT

What’s New for Tax Credits

The 2011 General Assembly enacted six new tax credits. All of these credits, except the Telework Expenses tax credit, are effective for taxable year 2011. Additionally, the Motion Picture Production tax credit, which was enacted by the 2010 General Assembly, is effective for taxable year 2011. Thus, with the exception of the Telework Expenses Tax Credit, taxpayers may apply for and, if approved, claim these new credits on their 2011 income tax returns.

The new tax credits administered by the Virginia Department of Taxation (the Department) are as follows:

• The Barge and Rail Usage tax credit
• The Farm Wineries and Vineyards tax credit
• The International Trade Facility tax credit
• The Research and Development tax credit
• The Telework Expenses tax credit

The other two new credits are the Port Volume Increase Tax Credit and the Motion Picture Production Tax Credit. The Port Volume Increase tax credit is administered by the Virginia Port Authority. The Motion Picture Production tax credit is administered by the Virginia Film Office.

In addition to the new credits above, there are changes to existing credits:

• Livable Home
• Neighborhood Assistance Credit
• Agricultural Best Management Practices

For more information on Tax Credits, click this link.

Long Term Capital Gain Subtraction

Effective for taxable years beginning on or after January 1, 2011, any income taxed as a long-term capital gain for federal income tax purposes, or any income taxed as investment services partnership income (otherwise known as investment partnership carried interest income) for federal tax purposes is allowed as a subtraction on the Virginia return. This subtraction is allowed if the income is attributable to an investment in a “qualified business” as defined in Va. Code § 58.1-339.4 or in any other technology business approved by the Secretary of Technology and the business has its principal office or facility in the Commonwealth and less than $3 million in annual revenues for the fiscal year preceding the investment. The investment must be made between the dates of April 1, 2010, and June 30, 2013.

Filing Thresholds

Beginning in tax year 2010, the filing thresholds will increase as follows:

Filing Status	2010 & 2011	2012 & Beyond
Single or Married, filing separately	$11,650	$11,950
Married, filing jointly	$23,300	$23,900

Claiming Credit for Taxes Paid to Another State

Were you required to pay income tax to a state other than Virginia for the 2011 tax year? If so, the Virginia Department of Taxation has some reminders on claiming credit for taxes paid to another state on your 2011 Virginia income tax return.

The credit computation is based on the qualifying taxable income and the qualifying tax liability reported to the other state. Where no tax is paid to the other state, a taxpayer is ineligible to claim an out-of-state credit on their Virginia return.
Taxpayers receiving full refunds of tax withheld under Virginia’s reciprocal agreements with Maryland, the District of Columbia, Kentucky, Pennsylvania or West Virginia, may not claim a credit for the amount withheld. In addition, a credit may not be claimed for taxes paid to any other state solely on the basis of a Form W-2 showing income tax withheld.
The total allowable credit for taxes paid to another state or states is limited to the net tax liability on your Virginia return (for residents, Form 760, line 17).
If you are entitled to claim credit for taxes paid to more than one other state, you must provide a separate computation for each state. In addition, you must provide a complete copy of the return for each state for which a credit is claimed. Failure to provide required documentation may result in disallowance of the credit.
Part-year residents filing form 760PY may not claim a credit for taxes paid to another state on income they received during their period of residence outside Virginia.
Generally, Virginia residents may not claim a credit for taxes paid to Arizona, California, Oregon, or the District of Columbia. Nonresidents filing Virginia Form 763 may only claim credit for taxes paid to those states.

For more details on this topic, visit the Credit for Tax Paid to Other States page of our website, or check the forms and instructions for filing Virginia returns. Forms and instructions are located online at our Individual Tax Forms page.

Retirees – Pensions and Estimated Payments

Did you retire during the 2011 or 2012 tax years? If so, please be advised that Virginia does tax pensions and most other retirement income.

Retirement income types taxed by Virginia may be different from other states. For example, some states do not tax military pension income, but Virginia will. Also, Virginia will not tax Social Security income, regardless of whether another state does. As a general rule, taxpayers should presume any type of income included in their Federal Adjusted Gross Income is taxable unless Virginia instructions specifically state it should be subtracted from tax consideration.

Virginia applies the same tax rates to all types of income. If you have recently retired or anticipate retiring soon, Virginia recommends you check to ensure that enough Virginia income tax is withheld from your retirement income. If no tax is withheld on income Virginia deems taxable, you may need to make estimated tax payments to cover the tax owed.

For more information on estimating Virginia taxes and making payments of estimated tax, see our Estimated Payment Information page. To review a more complete list of income Virginia does not tax, review the instructions on Subtractions from Income for your specific form type. Individual tax forms and instructions are available at our Individual Forms page online.

Military Spouses Residency Relief Act

The Military Spouses Residency Relief Act (S.475), which amended the Servicemember Civil Relief Act, was signed into law on Nov. 11, 2009. (You can find the Tax Bulletin that the Department published on the subject here.) It affects Virginia income tax filing requirements for spouses of military service members. Under this law, spouses of military service members do not automatically become liable for income and personal property taxes as Virginia residents when they are present in Virginia solely because their spouse is a member of the military serving in Virginia. To be exempt, however, the spouse must meet certain criteria. For details, visit our website.

First Quarter 2012 Interest Rates

(Past member) — Thu, 22 Dec 2011 15:36:39 GMT

First quarter 2012 interest rates remain unchanged.

State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to IRC § 6621. Federal rates for the first quarter of 2012 will be 3% for tax underpayments (assessments) and 3% for tax overpayments (refunds) by taxpayers other than corporations.

Virginia Code§ 58.1-15 provides that underpayment rates for Virginia taxes will be 2% higher than the corresponding federal rates and overpayment rates for Virginia taxes will be 2% higher than the federal rate. Accordingly, the

Virginia rates for the first quarter of 2012 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Tax Bulletin 11-11, with complete information, is attached and may be found in the Tax Policy Library also.

December Filing Reminders and Updates for Tax Preparers from the Virginia Department of Taxation

(Past member) — Thu, 01 Dec 2011 21:47:48 GMT

Filing Reminders for Corporation Tax Clients

Corporation income tax returns for the taxable year ended August 31, 2011 are due to be filed by December 15, 2011. For fastest and easiest filing, use Corporate Income Tax eFile to file your client’s return.

Remember, even though Virginia law provides for an automatic six-month filing extension, that extension does not apply to tax payments. To avoid penalties, be sure your clients pay at least 90 percent of their tax liability by December 15, 2011.

A reminder for your corporation tax clients whose taxable year ended February 28, 2011: the extended filing date is coming up soon! Return and payment for any tax due must be filed by December 15, 2011.

For complete information on corporation income tax filing and payment requirements, see the instructions for Form 500 on our website.

The final Corporation Estimated Income Tax Payment for calendar year 2011 filers is also due December 15, 2011. For more information about Corporate Estimated Payments, see TAX’s Corporate Income Tax information.

Paying an extension payment or estimated income tax using our free online Business iFile system is the fastest and most efficient way.

Correct Reporting of VK-1 Amounts Withheld

Are you a tax preparer who handles Virginia Individual Income tax filings that include information from the form VK-1? If so, the Virginia Department of Taxation would like to clarify how to report the amount listed as withheld for the owner included on that form.

Income tax deducted from wage, salary or other payments and paid to the Department of Taxation on behalf of the recipient is referred to as income tax withheld, or withholding tax. Typical withholding tax documents include Forms W2 or 1099. VK-1 statements issued by a business that reflect amounts other than zero on line e. “Amount Withheld by PTE for Owner” should be treated in the same manner as W2s/1099s with regard to reporting the amounts of tax withheld. Copies of VK-1 statement information should also be submitted with any tax return claiming VK-1 withholding.

The Department of Taxation receives many income tax returns that list VK-1 withholding as estimated tax payments, extension payments, etc. Returns prepared this way may prompt adjustments to the returns or requests for additional documentation to correct them. For specific line information, please consult the instructions for your form type or contact our Customer Service office for assistance.

QuickPay: A Convenient & Free Way to Pay Your Tax Bills

QuickPay is a free and secure online bill-paying service offered by the Virginia Department of Taxation. All bills issued by the agency may be paid using QuickPay with the exception of those currently under bankruptcy or appeal.

Payments may be made by Electronic Funds Transfer (EFT) for individual or business tax bills using funds from either a checking or savings account. QuickPay also allows your clients to check their bill balance(s) and review QuickPay payment history for up to two years.

To use QuickPay, go directly to QuickPay or visit our website. Once at the QuickPay login, enter the five digit bill number of the bill being paid from the most recent bill statement, along with either the nine-digit SSN for an individual tax bill, or, for a business tax bill, the 15-digit Virginia account number.

State Office Closings for This Month

State offices, including the Department of Taxation, will be closed Friday, Dec. 23, and Monday, Dec. 26, in observance of the Christmas holiday.

If you need to contact the Department, please plan to do so at other times. Normal business hours and contact information can be found here.

Need More Information?

For more information on any of the topics in this message, please visit our website at http://www.tax.virginia.gov.

The Department of Taxation would like to wish all Virginia tax professionals a very happy holiday season and a wonderful 2012!

November Updates and Filing Reminders for Tax Preparers and Corporation Income Tax from the VA Dept. of Taxation

(Past member) — Fri, 11 Nov 2011 15:25:40 GMT

Filing Reminder for Corporation Income Tax Clients

Corporation income tax returns for the taxable year ended July 31, 2011 are due to be filed by Nov. 15, 2011. For fastest and easiest filing, use Corporate Income Tax e-File to file your client's return.

Remember, even though Virginia law provides for an automatic six-month filing extension, that extension does not apply to tax payments. To avoid penalties, be sure your client pays at least 90 percent of the tax liability by Nov. 15, 2011. Use our free Business iFile service to make your client's payment online.

A reminder for your clients whose corporation's taxable year ended Jan. 31, 2011: the extended filing date is coming up soon! Return and payment for any tax due must be filed by Nov. 15, 2011.

For complete information on corporation income tax filing and payment requirements, see the instructions for Form 500 on our website.

Power of Attorney Process Issues F.A.Q.

Virginia established a new Power of Attorney process last year that allowed Authorized Agents to receive automatic copies of correspondence sent to the taxpayers they represent. To address confusion on the Power of Attorney process, here is a list of Frequently Asked Questions on Power of Attorney matters and submission of R-7 and PAR 101 forms.

Q: Why register as an Authorized Agent?

A: Anyone who wishes to be automatically copied on correspondence sent to a taxpayer must submit Form R-7 to register as an Authorized Agent with Virginia and Form PAR 101 identifying them as representative for that taxpayer. This includes all types of representatives: attorneys, friends, family members, accountants, etc.

Q: Who qualifies to register as an Authorized Agent or receive Power of Attorney authorization?

A: Any individual can register as Authorized Agents and receive Power of Attorney authorization; businesses cannot. The Department of Taxation will not accept a Form R-7 or any Power of Attorney documents that list a business as the authorized Power of Attorney.

Q: Will Virginia accept any alternate Power of Attorney documents?

A: A federal Form 2848 specifying Virginia tax matters and specific years or a durable power of attorney document can be accepted only to allow discussion of related account issues. Alternate Power of Attorney documents cannot authorize the Department of Taxation to issue automatic copies of correspondence. However, representatives authorized through alternate Power of Attorney documents can still obtain copies of taxpayer correspondence within the scope authorized by the Power of Attorney document. These representatives must submit written requests to Customer Service for the specific correspondence they wish to obtain.

Q: Is the federal Form 8821 an acceptable Power of Attorney document?

A: No, the federal Form 8821 is not an acceptable Virginia Power of Attorney document. The Department of Taxation will not process these forms to record Power of Attorney authorization.

Q: Will it be a problem if I use different information on my R-7 and PAR 101?

A: Authorized Agents should use the exact same mailing address, name spelling, and contact information on both the R-7 and the PAR 101. Differences in information may lead to confusion on the Authorized Agent’s identity and delays in processing PAR 101 forms.

Q: What do I do if I need to update my Authorized Agent information?

A: All updates to the Authorized Agent profile (mailing address, etc.) should be made on the Form R-7 with the change of information box checked.

Q: Can I fill in the PAR 101 with my Federal CAF# instead of an Authorized Agent number?

A: No. An Authorized Agent number (AA#) is issued to agents upon processing of their R-7. This number is unique to VA and is not the same as the Federal CAF# or an Enrollment Card Number.

Q: How many Authorized Agents can receive automatic copies of taxpayer correspondence?

A: Only two (2) Agents per taxpayer may be named on the PAR 101 to receive automatic copies of correspondence. Other agents can still be named to act on the taxpayer’s account by attaching a supplemental information list to the PAR 101 form. These additional Agents will not receive automatic copies of correspondence, but they may obtain copies of correspondence by submitting a written request to Customer Service.

Q: Is my Power of Attorney document valid without my signature?

A: Without the Agent signature, authorization has not been accepted and TAX will be unable to communicate with said Agent. Therefore, all Authorized Agents named on the PAR 101 must sign the form under the signature of representative section on line 7. Agents on a supplemental form of the type outlined in the previous question must sign the supplemental statement.

Form R-7, Form PAR101, and their accompanying instructions are available online at the Virginia Department of Taxation’s website.

Taxpayer Bill of Rights

The Virginia Taxpayer Bill of Rights booklet outlines your rights in contacts with the Virginia Department of Taxation, and contains a wealth of other useful information, forms and instructions.

Intended as a guide to the rights provided in the Code of Virginia under the Virginia Taxpayer Bill of Rights, the publication also describes the role of the Taxpayer Rights Advocate and the agency’s collections, office audit, and field audit processes in detail, and covers the basics for offers in compromise and administrative appeals as well. The booklet’s appendices include forms and instructions for submitting an appeal or an offer in compromise, plus forms for designating a Power of Attorney.

As you will find, the Virginia Taxpayer Bill of Rights booklet is a valuable resource for both taxpayers and tax professionals. Be sure to bookmark or download a copy for your tax reference library!

Need More Information?

For more information on any of the topics in this message, please visit our website at http://www.tax.virginia.gov.

ACAT Accepting Registrations for Fall 2011 Accountancy and Taxation Accreditation Exams: 2012 Testing Dates Also Announced

(Past member) — Tue, 25 Oct 2011 18:17:24 GMT

WASHINGTON, DC, October 25, 2011 - The Accreditation Council for Accountancy and Taxation® (ACAT) is now accepting exam applications for the November 28 - December 19, 2011 testing period from industry professionals seeking to earn any of the following four credentials:

ABA Accredited Business Accountant/Advisor®
Accredited Tax Advisor® (ATA)
Accredited Tax Preparer® (ATP)
Accredited Retirement Advisor® (ARA)

The exams are offered at computer-based testing centers throughout the United States.

The ABA is a national credential that verifies the technical proficiency of practitioners in financial accounting, financial reporting, financial statement preparation, taxation, business consulting services, business law and ethics. The emphasis is on a practical approach to public accounting.The ABA is accredited by the National Commission for Certifying Agencies (NCCA), an independent resource recognized as the authority on accreditation standards for professional certification organizations and programs.

The ATA is a premier national tax credential for practitioners who handle sophisticated tax planning issues, including planning for owners of closely held businesses, planning for the highly compensated, choosing qualified retirement plans and performing estate tax planning. Their expertise covers tax returns for individuals, business entities, fiduciaries, trusts and estates, as well as tax planning, tax consulting and ethics.

The ATP is a credential for tax practitioners who demonstrate a thorough knowledge of the existing tax code and the preparation of individual tax returns with an expertise in comprehensive 1040 issues including supporting schedules, self-employed returns, and ethics. The ATP exam will not be offered beginning in 2012, although ACAT will continue to support recertification and promotion of this credential for tax practitioners who earned it before then.

The ARA recognizes professionals who have a thorough knowledge of topics relevant to retirement planning and special issues of senior citizens including tax planning; preparing clients for retirement; tax preparation for decedents, the essentials of estates and trusts; financial planning; and applying your knowledge and skills in real-life situations when serving aging clients.

ACAT accreditation provides evidence to clients, prospective clients, employers, and the public that the accredited professional has met national standards and has a mastery of accounting and taxation procedures and practices. These credentials demonstrate a mastery of accounting and tax procedures and practices that far exceed the proposed IRS registered tax return preparer standard.

Candidate information with topic blueprints for each exam, credential information and exam registration, is available at www.acatcredentials.org.

The National Society of Accountants (NSA) offers preparatory course study guides for some of the exams. For more information, visit www.nsacct.org or call 800-966-6679.

In Spring 2012, the exam testing dates will be June 16 - July 7, 2012. There will also be a separate window for colleges to proctor a paper exam in their schools from May 21- June 18, 2012.

For more information about the exams and ACAT credentials, visit www.acatcredentials.org or call 888-289-7763.

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ACAT is an independent accrediting and monitoring organization affiliated with the National Society of Accountants. ACAT accredits professionals in independent practice who have demonstrated measurable knowledge of the principles, practices, and ethical standards of accounting, taxation, information technology and related financial services. For more information, visit www.acatcredentials.org.

Message from the Virginia Department of Taxation: Proof of Receipt Requests

(Past member) — Thu, 20 Oct 2011 13:20:49 GMT

The Department of Taxation receives numerous tax returns containing an enclosed "proof of receipt" letter and postage-paid envelope, asking that we return the letter as proof of receipt. Unfortunately, we do not have the staff to handle this additional work. If you would like your shipment tracked, we recommend that you use courier services, or mail methods that specialize in mail tracking. The Department of Taxation is not in the position to acknowledge receipt of packages or shipments outside of standard mail services designed to accomplish this.

Governor McDonnell Authorizes Tax Relief for Business and Individuals Impacted by Hurricane Irene

(Past member) — Wed, 07 Sep 2011 19:56:27 GMT

Richmond, VA - Governor Bob McDonnell today authorized Virginia Tax Commissioner Craig M. Burns to provide a one week filing and payment extension to certain individuals and businesses affected by Hurricane Irene. The extension will apply to taxpayers located in the Commonwealth who are unable to meet their filing obligations because the financial records they need to file their taxes, or their tax preparer, are located in cities and counties within the Commonwealth dealing with Hurricane Irene recovery or are otherwise unavailable because of severe hurricane damage.

"Individuals and businesses in areas impacted by Hurricane Irene already have significant stresses and challenges facing them as they recover from the severe impacts of Hurricane Irene, including damage to businesses, loss of power, loss of business, and personal and professional hardships," Governor McDonnell said. "The Commonwealth is dedicated to assisting those whose lives and businesses were impacted by the storm, and this extension of tax deadlines is one action we can take to ease some of the burden on those working to rebuild."

Individuals and businesses in these areas will automatically be allowed an additional seven days to file income and withholding tax returns and make tax payments that have a due date, or an extended due date, of Sept. 15, 2011. Tax returns and payments that are due on Sept. 15, 2011, will be allowed to be filed or paid on Sept. 22, 2011. The Virginia Department of Taxation will abate interest and any late-filing or late-payment penalties that would otherwise apply.

The extension does not apply to returns or payments of sales tax or any other taxes administered by the Department of Taxation with a due date, or an extended due date after Sept. 15, 2011.

Additional extensions and penalty waivers may be granted in hardship cases. Written requests for additional extensions should be emailed to TaxIndReturns@tax.virginia.gov for personal tax inquiries and TaxBusQuestions@tax.virginia.gov for business tax inquiries, or directed to:

Virginia Department of Taxation

Customer Service Section

Hurricane Irene Relief Extension

P.O. Box 1115

Richmond, VA 23218-1115

The Department of Taxation will work with taxpayers in the affected areas to minimize the impact of any collection enforcement activities that may be initiated between Aug. 27, 2011, and Sept. 15, 2011. Taxpayers notified of pending actions should contact the Tax Department at (804) 367-8045 to discuss relief from actions that will create additional hardship in their recovery from the effects of the storm damages. The suspension of enforcement actions, however, will not stop the accrual of interest on delinquent accounts.

Customers are welcome to use Live Chat on The Department of Taxation's website at http://www.tax.virginia.gov to discuss account-specific questions. If customers prefer asking questions by telephone, then individual income tax filers should call (804) 367-8031; business taxpayers should call (804) 367-8037 for assistance. Tax Bulletin 11-9 and other information is also available through the agency's website at http://www.tax.virginia.gov/.

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