Virginia State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Virginia, with full citations and the original source on every page.
No Virginia rulings match these filters
Try a different search term or clear the filters.
How did Virginia correct overlapping estimated-tax and late-filing penalties on a December 2014 return for 2013?
Virginia found the estimated-tax addition had already been paid with the return, so it should not appear again. But the return was filed in December 2014, making the 30% late-filing penalty proper. Th…
Did an employer's failure to issue a W-2 or withhold enough Virginia tax excuse the employee from filing and paying 2011 income tax?
No. Even if the employer failed to issue a W-2 or withhold Virginia tax, the employee remained responsible for reporting the income, filing the resident return, and paying the full liability. Because …
Did Virginia have to restore a tuition deduction after the IRS denied it and the taxpayer failed to amend the 2011 Virginia return?
No. Virginia began with federal adjusted gross income, and the IRS transcript showed that the tuition-and-fees deduction had been denied. The taxpayer was required to report that final federal change …
Did a military spouse keep her former-state domicile after moving to Virginia, renting out that home, and obtaining a Virginia driver's license?
No. Virginia found that the spouse did not maintain enough ties to her former state: its home became rental property, vehicles were registered only to the service member, and she obtained and kept a V…
Could Virginia assess a nonfiler from IRS information when the taxpayer claimed some reported income was nontaxable but filed no state return?
Yes. Virginia could use IRS information and other available data to assess a resident who filed no proper 2012 return. The taxpayer's assertion that some income should have been reported as nontaxable…
Could an employee-shareholder deduct loans that became worthless when his S corporation closed?
Yes, on the record before Virginia. A shareholder-employee's loans qualify as business bad debt only if protecting employment, rather than the investment, was the dominant motive. The Department lacke…
What Virginia return was required when a taxpayer moved into the state and established domicile in August 2011?
A part-year return. Virginia found that the taxpayer established domicile when he moved into the state in August 2011, so he was not a full-year resident. He had to file Form 760PY and report income a…
Did a taxpayer prove she was domiciled outside Virginia in 2011 without providing the requested objective records?
Not yet. The taxpayer claimed another-state residence but supplied no objective evidence despite two information requests, while her federal return used a Virginia mailing address. The assessment rema…
Did an apartment-complex statement prove that a taxpayer with a Virginia W-2 address was not a Virginia actual resident in 2013?
No. A Virginia address on the taxpayer's W-2 triggered a request for residency evidence. An apartment-complex statement from State B, without additional proof and against other returns showing nonresi…
Did moving abroad for a temporary job end a taxpayer's Virginia domicile when he kept major Virginia ties and planned another state later?
No. The taxpayer's foreign job was temporary, he did not intend to remain abroad, and he kept Virginia homes, family, voter registration, vehicles, and a driver's license. He also could not establish …
Did an active-duty service member and spouse have the same Virginia residency result for 2012?
No. The husband maintained another-state domicile through his military legal-residence certificate, driver's license, and voter registration, so his active-duty income was not treated as Virginia resi…
Did a Treasury Offset Program notice restart Virginia's 90-day appeal period, and was a citizen's domestic income exempt from Virginia tax?
No. The 90-day appeal period ran from the June 2014 assessment, not the later Treasury Offset Program notice, so the April 2015 appeal was untimely. The assessment remained due, and Virginia rejected …
Could parents deduct contributions to Virginia 529 accounts when the money came from their children's irrevocable UGMA or UTMA custodial accounts?
No. Although the husband was listed as owner of the Virginia 529 accounts, the contributed money belonged to the children because it came from their irrevocable UGMA or UTMA accounts. The parents ther…
Did paying by the original due date preserve Virginia's six-month extension when the original 2010 return was filed after the extended deadline?
No. A valid extension required both timely estimated payment and filing the original return within the six-month extended period. Because the return was filed after that period, Virginia treated the e…
Did Foreign Service assignments and an intent to retire in another state end a couple's established Virginia domicile for 2010?
No. The couple established Virginia domicile before the overseas assignments, which were temporary. An intention to retire in another state and withholding there did not establish domicile without ren…
Could taxpayers who moved into Virginia in July 2011 claim itemized deductions on a full-year resident return?
They had to use a part-year return. Because the couple moved into Virginia in July 2011, they were taxable as residents only for the Virginia portion of the year and could claim itemized deductions pa…
Could a taxpayer who moved to Virginia in March claim an out-of-state tax credit on a full-year resident return without submitting the other state's return?
Not as filed. A March mover should file Virginia Form 760PY and report only income received while a Virginia resident, attaching the other state's return to support any credit. The credit cannot cover…
Could a taxpayer who moved to Virginia in November overturn a 2011 income-tax assessment merely by saying he worked in Virginia for only two weeks?
No. The taxpayer admitted moving to Virginia in November and had Virginia-source income, but provided no objective evidence or return showing the correct 2011 liability. Virginia gave him 60 days to f…
Did Virginia driver's licenses and federal-only absentee voting keep a couple domiciled in Virginia after they established a permanent home abroad?
No. The couple proved that they sold their Virginia home, established a permanent home and tax residency abroad, owned no Virginia property, and voted only in federal elections under the overseas-vote…
Did installment payments from an annuity death benefit qualify for Virginia's 2011-2012 subtraction, or did oral Department advice protect the taxpayer?
No. Virginia interpreted the subtraction to require a federally taxable annuity death benefit awarded in a lump sum, so installment payments did not qualify for 2011 or 2012. Tax-form instructions wer…
Could taxpayers carry a 2009 overpayment forward after filing the return too late, and did New York's MCTMT qualify for Virginia's out-of-state tax credit?
No on both issues. The first recorded 2009 return arrived after Virginia's three-year refund deadline, so any overpayment could not be carried to 2010. New York's Metropolitan Commuter Transportation …
Did renewable one-year overseas work end Virginia domicile, and was accountant advice reasonable cause to waive the late-filing penalty?
No. Renewable one-year overseas employment was temporary, while the taxpayer bought a Virginia home, kept a Virginia vehicle and license, and used a Virginia address. Virginia found he remained domici…
Did Maryland partnership income reported on Schedule E qualify a Virginia couple for the full border-state tax credit?
No. Virginia's special border-state rule covered qualifying earned income and business income reported on Schedule C, not the husband's partnership income reported on Schedule E. The ordinary credit t…
Did a copy of an unrecorded Virginia return overcome an IRS-based assessment when the taxpayer supplied no federal transcript or proof of payment?
No. Virginia had no record of the claimed state return or payment, the IRS had no federal return, and IRS income information exceeded the income on the taxpayer's copy. The assessment remained due, bu…
Could a Virginia resident subtract an entire IRA distribution because retirement contributions had been taxed by another state, and carry unused subtraction forward?
No. Only the prorated portion attributable to documented contributions that were federally deductible but taxed by the other state could be subtracted; investment earnings could not. The taxpayer lack…
Could a nonresident keep Virginia itemized deductions when supporting records were unavailable and a tax preparer had prepared the return?
No. The taxpayer did not substantiate the itemized deductions after repeated requests, could not show that a claimed package had been received, and said records were lost, destroyed, or unavailable. V…
Did a taxpayer's unsupported claim of another-state residence justify changing Virginia's 2011 income-tax assessment?
No. The taxpayer used a Virginia address on the federal return, had filed Virginia returns before 2011 and again for 2012 and 2013, and supplied no objective evidence of the claimed other-state domici…
Did an overseas job transfer end a couple's Virginia domicile when they kept a Virginia home, vehicles, licenses, and obtained a Virginia divorce?
No. The couple had established Virginia domicile in 2010 and retained a Virginia home, vehicles, licenses, and the wife's presence while the husband worked abroad. A Virginia divorce order also recite…
Could a military member satisfy Virginia's extended-active-duty subtraction when the 90-day period crossed two tax years?
Yes. Virginia said the extended-active-duty period could exceed 90 consecutive days across two tax years; it did not have to exceed 90 days within 2011 alone. But only qualifying basic pay included in…
Did the Servicemembers Civil Relief Act toll Virginia's deadline for a military member's 2007-2008 withholding refund claims?
No. The servicemember filed Forms 763-S in September 2013, after the Virginia refund deadlines for 2007 and 2008. The cited Servicemembers Civil Relief Act provisions deferred collection and tolled co…
Could Virginia part-year residents claim an out-of-state credit for New Hampshire Business Enterprise Tax paid on the same income?
No. Virginia held that the New Hampshire Business Enterprise Tax was based on enterprise-value expenditures such as compensation, interest, and dividends, rather than income. It therefore was not subs…
Could Virginia extend an expired Land Preservation Tax Credit so a purchaser could claim the remaining 2006 credit in 2012?
No. A Land Preservation Tax Credit earned in 2006 could be carried only through the five following tax years, 2007-2011. Virginia had no statutory authority to add another year or permit use or transf…
Did a West Virginia resident owe Virginia income tax on wages earned while working in Virginia in 2011?
No. Virginia found that the taxpayer had established West Virginia domicile for 2011 despite renewing a Virginia driver's license. Because he was a West Virginia resident earning wages in Virginia, th…
Could Virginia residents subtract their full Kansas public-employee pension because Kansas had taxed some plan contributions?
Only in part. Virginia did not allow a subtraction for the entire Kansas pension. The taxpayers could subtract the documented portion attributable to KPERS contributions made after July 1, 1984 that h…
Were out-of-state domiciliaries who spent more than 183 days in Virginia taxable as Virginia residents in 2010 and 2011?
Yes. Virginia treated the couple as actual residents from February 4 through December 31, 2010 and for all of 2011 because they maintained a Virginia abode and spent 282 and 270 days in Virginia. Thei…
Was a 2014 Virginia amended return claiming credit for another state's 2009 assessment filed within the special one-year period?
Unresolved. The normal May 3, 2013 deadline had passed, but Virginia law allowed one year from another state's final determination. Because the record did not establish when that determination became …
Did a death-benefit distribution from a federal pension plan qualify for Virginia's annuity-contract subtraction?
No. Virginia's subtraction required a federally taxable lump-sum death benefit from an annuity contract between a customer and an insurance company. The taxpayer's payment came from a federal pension …
Could a taxpayer avoid Virginia's estimated-tax, extension, and late-payment penalties after filing by October 15 but paying nothing?
No. The taxpayer made no estimated payments, paid nothing by the May 1 original due date, and still paid nothing with the October 2013 return. Virginia upheld the estimated-tax addition, a 12% extensi…
What result is verifiable from the published order in Karl Edward Beisel v. Virginia Department of Taxation?
The Chesapeake Circuit Court granted the Department's demurrer and dismissed Karl Edward Beisel's case with prejudice in a final, appealable order. The published source says the reasons were in an Apr…
Could an out-of-state capital loss make a Virginia nonresident's income apportionment factor equal 100%?
Yes. In the ruling's example, a $200 out-of-state capital loss reduced income from all sources but not Virginia-source income. With both the numerator and denominator at $500, the nonresident apportio…
Did moving to another state for full-time work end a taxpayer's Virginia domicile when his family and major ties remained in Virginia?
No. Virginia held that the taxpayer had not abandoned his Virginia domicile. Although he worked, leased a home, registered a vehicle, and held a license in another state, his family and home remained …
Could Virginia residents claim an out-of-state tax credit for the District of Columbia Unincorporated Business Franchise Tax?
No. Virginia held that the District of Columbia Unincorporated Business Franchise Tax was a franchise tax, not an income tax similar to Virginia's individual income tax. The residents' 2013 credit was…
Could Virginia residents claim a Virginia credit for California tax on California wages when California law offered the reciprocal credit?
Generally no. Virginia denied the credit because California law ordinarily allows the Virginia resident to claim the reciprocal credit on the California nonresident return. The couple's California ret…
Could taxpayers apply a claimed 2008 Virginia overpayment to 2009 tax when their first 2008 return was filed in June 2014?
No. Applying an overpayment to another year's liability was subject to the same deadline as a refund. The 2008 return was due May 1, 2009 but was not filed until June 17, 2014, so Virginia denied the …
Was a taxpayer who moved out for permanent work and returned to Virginia in May 2011 a full-year or part-year resident?
Part-year resident. Virginia found that the taxpayer had abandoned Virginia domicile before 2011 and did not become a Virginia resident again until he returned in May. His submitted part-year return w…
Did a federal extension give a taxpayer until July 2014 to file an original 2010 Virginia return claiming a refund?
No. Because the taxpayer did not file the original Virginia return by the extended due date, the Virginia extension was negated and the refund period ran from the original May 2, 2011 due date. The Ju…
Could Virginia residents subtract all CSRS pension payments because their contributions had already been taxed federally and by Delaware?
No. Virginia's subtraction required contributions that were deductible federally but taxed by another state. The husband's CSRS contributions had been taxed federally, so their basis was already recov…
Did a couple establish another-state domicile in 2011 even though they returned to Virginia that November and one retained a Virginia license?
Yes. The husband changed domicile in February 2011 and the wife in March after the couple sold their Virginia home, bought a home in another state, moved vehicles, registered to vote, and obtained lic…
Was a worker entitled to refunds when her employer withheld Virginia tax after she abandoned Virginia domicile for a foreign assignment?
Yes. Virginia found that the worker abandoned her Virginia domicile and established domicile in another country before 2010. Her employer had incorrectly withheld Virginia tax, and her timely nonresid…
Was a military spouse working in Virginia in 2008 a resident, or a nonresident taxable only on Virginia-source wages?
Nonresident. Virginia found that the military spouse had not abandoned his other-state domicile and spent no more than 183 days in Virginia. He still owed Virginia tax on wages earned from Virginia em…
Could employees deduct internet and vehicle costs when the internet amount lacked support and the employer paid for fuel?
Partly. Virginia upheld the internet-expense adjustment because the taxpayers did not document the larger amount claimed, but restored the net mileage deduction because the standard mileage rate cover…
Could taxpayers subtract full IRA distributions when only part represented retirement contributions previously taxed by another state?
Not yet. The previously taxed contributions could qualify, but investment earnings could not. Virginia gave the taxpayers 30 days to prove the contribution balance, year-end account values, and distri…
Could a Virginia resident subtract pension income from another state without proving that state previously taxed the plan contributions?
No. The pension was included in the Virginia resident's federal adjusted gross income, and she did not prove that the other state had previously taxed contributions that the federal government had not…
Could a Virginia resident claim credit for North Carolina tax on gain from investment land, and did the special border-state rule apply?
Yes, under the general credit. The investment land was a capital asset, so the Virginia resident could claim credit for North Carolina tax on the 2014 gain. The special border-state rule did not apply…
Could taxpayers avoid Virginia assessments while contesting IRS adjustments if they filed no amended Virginia returns or proof of a revised federal result?
No. Virginia upheld the 2009, 2010, and 2013 assessments because the taxpayers did not report the IRS changes or provide enough evidence of a revised federal determination. If the IRS later changed it…
Was a military spouse exempt from Virginia income tax when she claimed another domicile but had a home, job, voter registration, and license in Virginia?
No. Virginia found the spouse was a Virginia domiciliary because she showed no continuing connections to the claimed state and established a home, employment, voter registration, and a driver's licens…
Could a Virginia resident use Maryland rental income and tax to claim the special border-state credit without Virginia's ordinary limitation?
No. Maryland rental income reported on Schedule E did not qualify for Virginia's special border-state rule. Virginia correctly limited each 2011-2013 credit to the Virginia tax on Maryland net income,…
Could severe illness extend Virginia's refund deadline when a 2010 joint return claiming a refund was filed in June 2014?
No. The 2010 return had to be filed by May 2, 2014 to preserve the refund, but the wife and husband's estate filed it in June. Virginia law required a fiduciary or authorized agent to file for a disab…
Could taxpayers deduct long-term care premiums paid in 2009 and 2010 on their 2011 Virginia return after the earlier refund periods expired?
No. Under the taxpayers' cash method, long-term care premiums were deductible only in the year paid. Their 2011 return could include the 2011 premium, not premiums paid in 2009 or 2010, and the three-…
Could late 2005-2009 overpayments be credited to 2012-2013 assessments when disability prevented the taxpayer from filing until March 2014?
No. Applying an overpayment to later tax is still subject to the refund deadline. The taxpayer filed the 2005-2009 returns in March 2014, after every limitation period had expired, and disability did …
Browse Virginia rulings by topic
These are official tax letter rulings and advisory opinions issued by Virginia's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.