If I move to Virginia partway through the year, am I taxed as a full-year resident -- and can I get a credit for the income tax I paid to my old state?

Plain-English summary

A taxpayer moved from another state ("State A") to Virginia during 2020. Working from IRS data, the Department assessed her as a full-year Virginia resident for 2020. She appealed, arguing she lived in State A until October and that her income belonged to State A. The Tax Commissioner largely agreed: she was a Virginia resident only part of the year, so the full-year assessment was wrong — but she has to refile correctly and cannot credit all of the State A tax she paid.

When did she become a Virginia resident? Virginia taxes two kinds of residents (§ 58.1-302): a domiciliary resident (Virginia is your permanent home) and an actual resident (more than 183 days in Virginia). Changing your domicile takes two things together — actually leaving your old state with no intent to return, and being physically present in the new state with intent to stay (Cooper's Adm'r v. Commonwealth). Here she bought a Virginia home and got a Virginia driver's license in August 2020 — strong signs of intent (and Virginia issues licenses only to residents, § 46.2-323.1). But she kept living and working in State A until she physically moved on October 2, 2020. Because domicile needs presence and intent, her Virginia residency began in October, not August.

What a part-year resident owes. A person who becomes a Virginia resident mid-year is taxed as a Virginia resident only for the residency portion of the year (§ 58.1-303), allocating income between the two periods on a schedule filed with Form 760PY. She filed a part-year return (October 1 start) but left out the required income-allocation schedule.

The credit for taxes paid to another state — and its part-year trap. Virginia residents can claim a credit for income tax paid to another state on earned/business income or capital gains (§ 58.1-332), capped at the lesser of the tax actually paid there or the Virginia tax on that same income. But part-year residents cannot use this credit for tax paid to their other state of residence for the part of the year they lived there (§ 58.1-303). So she cannot credit the State A tax on income she earned while still a State A resident; she can credit State A tax only on State A-source income received after she became a Virginian. Her return had wrongly claimed the credit for the whole year.

Bottom line: She was a part-year Virginia resident from October 1, 2020. To fix the (too-high) full-year assessment, she must file a complete 2020 part-year return with the income-allocation schedule and claim the credit only to the extent allowed, within 30 days; the Department will then adjust the assessment.

What this means for you

People who move into or out of Virginia mid-year

Your move date matters, and it is not automatically the day you signed a lease, bought a house, or got a driver's license. Virginia looks for the point where you were physically present in your new state and intended to stay. Getting a Virginia license or buying a home shows intent, but you generally do not become a Virginia domiciliary until you actually live there. Keep evidence of your true move date — the moving-van rental, utility start dates, when you began living in the new home.

Anyone claiming a credit for taxes paid to another state

The credit is real, but part-year movers hit a specific limit: you cannot credit the tax your former home state charged you on income you earned while you still lived there. You only get the credit on out-of-state-source income earned during your Virginia-resident period. Claiming it for the full year — as this taxpayer did — will be disallowed.

Tax preparers

For a client who relocated to Virginia, pin down the domicile-change date under the presence-plus-intent test, file Form 760PY with the income-allocation schedule (missing it here stalled the correction), and compute the § 58.1-332 credit only on the post-move period. A Virginia driver's license obtained before the physical move is an intent indicator, not the residency start date.

Common questions

Q: I moved to Virginia in the middle of the year. Am I a full-year Virginia resident?
A: No. You are a part-year resident, taxed by Virginia only on income attributable to the part of the year you actually lived in Virginia (§ 58.1-303), reported on Form 760PY.

Q: I got a Virginia driver's license before I finished moving. Did that make me a Virginia resident right away?
A: Not by itself. A Virginia license is strong evidence of intent to be a Virginia resident, but domicile also requires physical presence. In this ruling the taxpayer's residency started when she physically moved (October), even though she got her license in August.

Q: Can I take a Virginia credit for the income tax I paid to my old state?
A: Only partly. Part-year residents cannot credit tax paid to their former home state for the period they lived there. You can claim the credit only for tax on that state's source income received after you became a Virginia resident, subject to the usual § 58.1-332 limits.

Q: The Department taxed me for the whole year. How do I fix it?
A: File a complete part-year return (Form 760PY) with the income-allocation schedule and the correctly limited credit, within the 30 days the determination allows. The Department will then adjust the assessment.

Citations and references

Statutes and regulations:

• Va. Code § 58.1-302 — domiciliary vs. actual (183-day) residency
• Va. Code § 58.1-303 — part-year residents taxed only for the Virginia-residency period; no credit for the prior state's tax during the pre-move period
• Va. Code § 58.1-332 (A) — credit for income tax paid to another state
• Va. Code § 46.2-323.1, § 46.2-307, § 46.2-100 — Virginia driver's licenses and the definition of "nonresident"
• 23 VAC 10-110-30 B 3 — burden on the individual to prove a change of domicile
• 23 VAC 10-110-40 — computing a part-year resident's Virginia income (Form 760PY)

Authorities the Commissioner relied on (described here, not linked): Cooper's Adm'r v. Commonwealth, 121 Va. 338 (1917) (domicile requires both presence and intent); and prior Department public documents on the driver's-license factor, the presence-plus-intent test, and the part-year credit limitation (P.D. 97-301, 00-151, 02-149, 13-28, 13-97, 15-4, 18-36, 23-110, and 24-112).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 26-3

Original ruling text

February 4, 2026

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will respond to your letter in which you seek correction of the individual income tax assessment issued to you (the “Taxpayer”) for the taxable year ended December 31, 2020.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2020 taxable year. A review of the Department’s records showed that the Taxpayer had not filed a Virginia return. The Department requested additional information from the Taxpayer in order to determine if her income was taxable in Virginia. When a response was not received, the Department issued an assessment. The Taxpayer filed an application for correction, contending she was a resident of * (State A) until she moved to Virginia in October 2020 and that all of her income was subject to tax in State A.

DETERMINATION

Residency

Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia Code § 58.1-302. The domiciliary residence of a person means the permanent place of residence of that person and the place to which that person intends to return even though they may be residing elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained their place of abode within Virginia. A Virginia domiciliary resident continues to be subject to Virginia taxation even if they work in another state or country. Additionally, a person who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days, is also subject to Virginia taxation.

In order to change domicile, there must be (1) actual abandonment of the old domicile, coupled with an intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and an intent to remain there permanently or indefinitely. See Cooper’s Adm’r v. Commonwealth, 121 Va. 338, 347 (1917). The burden of proof that an individual has abandoned or failed to establish domicile in Virginia rests with the individual. See Title 23 of the Virginia Administrative Code (VAC) 10-110-30 B 3.

The determination of whether a change of domicile has occurred is highly dependent on the facts and circumstances of the individual case, and no single factor is dispositive. Factors to be considered include, but are not limited to, the following:

sites of real and tangible property, location of savings and checking accounts, motor vehicle registration and licensing, motor vehicle operator’s license, voter registration, membership in clubs and civic groups, place of business, profession or employment, charitable contributions, location of schools attended by children, length of time of residence, place of birth and marriage, residence of family, reason for abandoning or acquiring domicile, and, in the case of a minor or married person, domicile of parents, husband, or wife and/or children. Id.

In this case, the Taxpayer was a domiciliary resident of State A before moving to Virginia in 2020. She purchased a Virginia residence and obtained a Virginia driver’s license in August 2020. According to the Taxpayer, however, she continued to live and work in State A until September 28, 2020, at which time she rented a moving van and began moving her belongings into her Virginia residence. She completed the move on October 2, 2020.

As we consider the fact that the Taxpayer obtained a Virginia driver’s license, it should be understood that Virginia Code § 46.2-323.1 states, “No driver’s license . . . shall be issued to any person who is not a Virginia resident.” In fact, this section states that every person applying for a driver’s license must execute and furnish to the Commissioner of the Department of Motor Vehicles (DMV) a statement that certifies that the applicant is a Virginia resident. The Department has found that an individual may successfully establish a domicile outside Virginia even if they retain a Virginia driver’s license. See Public Document (P.D.) 00-151 (8/18/2000). However, obtaining or renewing a Virginia driver’s license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/9/2002).

The fact that an individual has a Virginia driver’s license is one factor to consider, among other possible factors, in any given domicile case. Nonresidents are not permitted to hold Virginia driver’s licenses. See Virginia Code § 46.2-323.1. They are, however, permitted to continue to use their licenses from their home states or countries. See Virginia Code § 46.2-307. For the purposes of Title 46.2 of the Code of Virginia , “nonresident” is generally defined as every person who is not domiciled in the Commonwealth. See Virginia Code § 46.2-100. Thus, in general, an individual must be a domiciliary resident of Virginia in order to hold a Virginia driver’s license.

That said, acquiring domicile in a new location requires both intent and personal presence. See Cooper’s Adm’r v. Commonwealth , 121 Va. 338, 347, in which the Virginia Supreme Court observed that neither physical presence alone nor expressed intention alone are sufficient to create a legal domicile for taxation purposes. The Department has determined that individuals cannot establish a domicile despite having some connections if they have not established a physical presence in the jurisdiction and the concurrent intention to remain there permanently or indefinitely. See P.D. 13-97 (6/11/2013), P.D. 15-4 (1/8/2015), and P.D. 23-110 (10/19/2023).

The Taxpayer’s acquisition of a Virginia driver’s license and residence in August 2020 indicates an intent to establish domicile in Virginia. The Taxpayer, however, did not live in the Virginia residence or abandon her State A residence until October 2020. Thus, while the Taxpayer may have had the requisite intent to change domiciles in August 2020, she did not establish her Virginia domiciliary residency until October 2020.

Part-Year Residency

Virginia Code § 58.1-303 provides that any individual who becomes a resident of Virginia during a taxable year shall be taxable as a Virginia resident for only that portion of the taxable year during which that person was a resident of the Commonwealth. Title 23 of VAC 10-110-40 further explains that the Virginia taxable income of a part-year resident shall be computed by determining income, deductions, subtractions, additions, and modifications attributable to the period of residence in Virginia. As such, any individual who is a part-year resident of Virginia during a taxable year must attribute their income between their periods of residence in and outside of Virginia on a schedule of income filed with their return (Form 760PY).

With her application for correction, the Taxpayer submitted a 2020 Virginia part-year individual income tax return claiming a Virginia residency start date of October 1, 2020. However, she did not provide a schedule of income allocating her income between her periods of State A and Virginia residency.

Credit for Taxes Paid to Another State

Generally

Virginia Code § 58.1-332 A allows Virginia residents a credit against their income tax liability when they pay income tax to another state on earned or business income, or any gain from the sale of a capital asset. The intent of the credit is to grant Virginia residents relief in situations when they are taxed by both Virginia and another state on these types of income.

In most circumstances, the credit for income tax paid to another state by a Virginia resident is limited to the lesser of: (1) the amount of tax actually paid to the other state; or (2) the amount of Virginia income tax actually imposed on the taxpayer on the income derived in the other state. The limitation is computed by multiplying the individual’s Virginia tax liability by a fraction, the numerator of which is the income upon which the other state’s tax is imposed, and the denominator of which is Virginia taxable income. See P.D. 97-301 (7/7/1997).

Part-year Residency

Notwithstanding the provisions of Virginia Code § 58.1-332, part-year residents are prohibited from claiming any credit against their Virginia tax liability for tax paid to any other state or jurisdiction of residence or domicile for that portion of the taxable year during which they were a resident of such other state or jurisdiction. See Virginia Code § 58.1-303 and P.D. 13-28 (3/5/2013).

As a result of this part-year residency rule, the Taxpayer could not claim credit for income tax paid to State A on any income she received while she was solely a resident of State A in 2020. The Taxpayer would have been able to claim a credit for tax paid to State A on income received during the period she was a resident of Virginia, provided the income was from State A sources, to the extent permitted by Virginia Code § 58.1-332. See P.D. 18-36 (3/26/2018) and 24-112 (11/14/2024). The Virginia part-year return submitted with the Taxpayer’s application, however, claimed a credit for tax paid to State A for the full 2020 taxable year.

CONCLUSION

The Department acknowledges that a determination of a change in domicile is evidenced by a process in which no single factor is dispositive. After carefully considering the information presented, the Department finds that the Taxpayer was taxable as a part-year Virginia resident beginning on October 1, 2020, on any income received during her period of Virginia residence. The Taxpayer, however, may be able to claim a credit for a portion of the income tax she paid to State A.

The assessment at issue was made based on residency for the entire year. Because she was a part-year resident, the Taxpayer should file a complete 2020 Virginia part-year resident income tax return, including the required schedule of income, and claim credit for income tax paid to State A, to the extent permitted by Virginia Code § 58.1-322. The return should be submitted within 30 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, P.O. Box 27203, Richmond, Virginia 23261-7203, Attention: *. Upon receipt, the return will be reviewed and the assessment will be adjusted, as appropriate. If the return is not received within the allotted time, the assessment will be adjusted based on the available information.

The Code of Virginia sections and regulations cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at or **@tax.virginia.gov.

Sincerely,

Kristin L. Collins
Tax Commissioner
Commonwealth of Virginia

AR 5094.Q

Related Documents

97-301

00-151

02-149

13-28

13-97

15-4

18-36

23-110

24-112