May 26, 2022
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of the individual income tax assessment issued to ***** (the “Taxpayer”) for the taxable year ended December 31, 2020.
FACTS
The Taxpayer was a full-time college student and was reported as a dependent on her parent’s 2020 federal and Virginia income tax returns. She filed a 2020 Virginia resident return showing a tax due, and an assessment was issued based off that return. The Taxpayer appealed, contending that she was a full-time college student who was a dependent of her parents.
DETERMINATION
Virginia Code § 58.1-301 provides, with certain exceptions, that the terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. Conformity does not extend to terms, concepts, or principles not specifically provided in the Code of Virginia. For individual income tax purposes, Virginia “conforms” to federal law, in that it starts the computation of Virginia taxable income (VTI) with federal adjusted gross income (FAGI). Income properly included in the FAGI of a Virginia resident is subject to taxation by Virginia, unless it is specifically exempt as a Virginia modification pursuant to Chapter 3 of Title 58.1 of the Code of Virginia.
Virginia Code § 58.1-341 provides that a Virginia resident who is required to file a federal income tax return is also required to file a Virginia income tax return, unless the resident is exempt from filing under Virginia Code § 58.1-321. Additionally, even if a resident is not required to file a federal return but has Virginia adjusted gross income that exceeds the filing threshold, the resident is required to file a Virginia individual income tax return.
Under IRC § 6012(a)(1)(C)(i)(II), a dependent whose gross income is in excess of the standard deduction for the year is required to file a federal income tax return. For the 2020 taxable year, the standard deduction was $12,400.
The Taxpayer’s gross income for 2020 exceeded $12,400 and, as required, she filed a federal income tax return. Further, even if she had not been required to file a federal income tax return, her Virginia adjusted gross income exceeded the filing threshold for filing a Virginia income tax return under Virginia Code § 58.1-321 and was, thus, required to file a Virginia income tax return regardless of the fact that she was a full-time college student and a dependent. In compliance with Virginia law, she filed her 2020 individual income tax return.
The Taxpayer’s 2020 return reported a tax due because employer withholding or estimated payments were insufficient to cover her liability. Pursuant to Virginia Code § 58.1-351, each individual who is liable for the income tax must pay the full amount of tax reported on the face of the return on or before the due date of such return. When required payments are not made, the Department is authorized to issue assessments under Virginia Code § 58.1-1812.
Accordingly, the assessment issued for the taxable year ended December 31, 2020 is correct. The Taxpayer will receive an updated bill, which will include accrued interest to date. She should remit the balance due within 30 days of the bill date to avoid the accrual of additional interest and possible collections actions.
The Code of Virginia sections sited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department’s web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/3913.B