Virginia income tax
Virginia income tax laws conformed to the federal income tax law for 20 years, during which Virginia income taxes changed automatically as and when there was a change in the federal income tax law, unless otherwise exempted.In 2003, Virginia began a period of fixed conformity, moving the date each year.A provision enacted in 2006, fixed Virginia conformity to Internal Revenue Code terminology to the Internal Revenue Code that existed on December 31, 2005.
Filing requirements:
1) Residents (including dependents and students) must file an individual income tax return if
- They are single, and have an adjusted Virginia gross income of $7,000 or more
- They are married and filing a joint or combined return, and the total adjusted Virginia gross income for both the spouses is $14,000 or more.
- They are married and filing a separate return and the adjusted Virginia gross income is $7,000 or more.
There are 2 types of Virginia residents namely, actual and domiciliary.Actual residents are those individuals who are physically present in Virginia, or who maintain a place of abode in Virginia for more than 183 days during the taxable year.
Domiciliary residents are individuals whose state of legal residence in the technical sense is Virginia but do not live in Virginia.
Virginia Adjusted gross income is your adjusted federal gross income added to any Virginia additions minus and Virginia deductions computed on Schedule ADJ.
2) Nonresidents: a nonresident is a person who is not a resident of Virginia but who has received income from Virginia sources during the taxable year. Nonresidents are subject to the same requirements as those for residents.The filing threshold for a nonresident is determined by the Virginia adjusted gross income computed as resident, which include income from all sources.
3) Part-year residents: An individual who establishes or abandons Virginia as his/her legal residence during the taxable year is a part-year resident.
The filing requirements for the part-year residents are the same as those for the residents.The income received while living in another state will be included in the Virginia subtraction while computing the adjusted Virginia gross income for a part-year resident.
4) Resident and non resident aliens: Though there are special provision for them in the federal law, Virginia law doesnt provide any such provisions to aliens.A resident or non resident alien is subjected to the same provisions as all other filers.
For spouses filing different returns, known as mixed residency, there may be instances where no single status completely addresses their circumstances.In such cases, it may be necessary to file two returns for the taxable year using different residency statuses.
Military personnel: Members of the armed forces on active duty are taxed only in their legal states of residence.However, you are liable to pay Virginia income tax as a nonresident on income you earn from any businesses, trade, profession or occupation in Virginia.
5) Members of Congress: A member of the US congress who is domiciled in another state will not be considered a resident for tax purposes even if he/she actually lives in Virginia.Members of congress are subject to Virginia income tax as nonresidents only on income received from Virginia sources.
The tax rates:
- If your Virginia taxable income is not over $3,000, your tax is 2% of your Virginia taxable income.
- If it is in between $3,000 and $5,000, your tax will be $60 + 3% of the income amount in excess of $3,000
- If the income is between $5,000 and $17,000, the tax will be $120 + 5% of the amount of income in excess of $5,000
- If the income is over $17,000, then the tax will be $720 + 5.75% of the income amount in excess of $17,000.
When to file?
The VA individual income tax return is to be filed on or before the 1st of May.The fiscal year filers should adjust the filing due dates according to their beginning month.Form 760ES vouchers are due on the 15th day of the fourth, sixth and ninth months of the taxable year and the 15th day of the first month following the close of the taxable year.
Tax payment methods: there are several options offered by the Virginia department of taxation for paying the tax.
- Online, using QuickPay: Quickpay is a free and secure online bill paying service which allows you to pay bills from your checking or savings account, to pay bills for any type of tax and also to review your bill balances.
- Online, using VATAX Online for Individuals: VATAX Online offers a variety of options for filing and payment of individual income tax.
- Through check or money order: You may attach your check or money order payable to the treasurer of your city or county to your return.
- Using credit card: You can use your credit card to pay tax bills, individual taxes and any balance due on individual income tax returns.
- Teleplan: This automated payment plan system is available 24 hours a day at (804)440-5100.You must have your 9-digit social security number or federal employee identification number when calling.
Penalties and interest:
- Extension penalty : beginning with taxable year 2005, Virginia law provides an automatic filing extension of six months for the filing of income tax returns, though no extension is granted for payment of taxes.To avoid an extension penalty, at least 90% of the final tax liability must be paid by the original due date for filing the return.
- Late filing penalty: If you file your return more than six months after the due date and you owe tax, you will be subject to a late filing penalty.The penalty is assessed at a rate of 6% per month or part of month from the due date of the return until the return is filed, or until the maximum penalty of 30% has accrued.
- Late payment penalty: If you file your return within six months of the due date but do not pay the tax due until after that time, you will be subject to a late payment penalty.The late payment penalty is assessed at a monthly rate of 6%, with a maximum penalty of 30%.
- Interest : Virginia law requires the department of Taxation to assess interest on any balance of unpaid tax, from the due date of payment through the date the tax is paid.
- Other penalties : In addition to the above, Virginia law also provides for civil and criminal penalties in cases involving fraud and failure to file.The civil penalty for filing a false or fraudulent return or a failure in filing a return with the intention of evading the tax is 100% of the tax amount.Criminal penalties of imprisonment for up to a year or a fine up to $2,500, or both, can be applied in cases of fraud and failure to file.
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