Federal legislation signed into law on November 11, 2009, the Military Spouses Residency Relief Act, affects Virginia income tax filing requirements for certain spouses of military personnel. Effective for taxable year 2009, spouses of military service members do not automatically become Virginia residents for purposes of income and personal property taxation in cases where the individual is present in Virginia solely to be with a spouse who is a member of the military serving in Virginia in compliance with military orders. This means that affected individuals may be eligible for refunds of income tax withheld by their employers in 2009. For details, see Tax Bulletin 09-10, and the revised Form VA-4. Check back for updates, or sign up for e-Subscriptions to receive e-mail notifications of new information.
Tax relief is just a click away at GetSquareVA.com. Pay the tax due plus one-half the interest on eligible Virginia tax assessments and delinquent returns, and we will waive the remaining interest and any penalties. The amnesty program runs from October 7, 2009 through December 5, 2009. Find out how to Get Square today!
Sign up today for our new e-Subscriptions service and we will send you customized e-mails about tax changes that may affect you or the the way you do business, while also receiving important filing reminders and updates. And don't worry -- you can unsubscribe at any time!
VATAX offers new "Live Chat” service to allow taxpayers to communicate on-line in real time with the department’s Tax representatives. Taxpayers can ask general tax questions or specific questions about their accounts. Live Chat is available from 7 a.m. to 9 p.m. week days, and from 8 a.m. to 1 p.m. on Saturdays. Transcripts of on-line conversations are available to print out.
Effective for taxable years beginning on or after January 1, 2009, employers of household service employees may elect to file and pay the Virginia income tax withheld from their employees’ salaries on an annual basis, at the same time they submit the employees’ Forms W-2 for the year. In order to qualify for the annual filing, an employer must have a total payroll in each calendar quarter that does not exceed $5,000, regardless of the number of persons providing the domestic service. The employment must consist exclusively of domestic service in the private home of the employer as defined in the Federal Employment Tax Regulations. The first annual return and payment will be due on February 28, 2010. Beginning January 5, 2009, employers may register for the new filing option by using iReg online, or by using Form R-1H. For details, refer to Tax Bulletin 08-12.
Effective for taxable year 2008, every professional tax preparer having 100 or more clients must submit all returns electronically, except for returns containing schedules or attachments that cannot be accepted via iFile or e-File. This provision eliminates the option of filing paper forms with a 2D barcode in cases where a return can be filed electronically. The new provision does not apply in cases where a preparer has received a hardship waiver from the Tax Commissioner using Form 8454P, or where a client has opted out of electronic filing by completing Form 8454T.
May 25-31, 2009: -- Hurricane Preparedness Equipment. During this seven-day period, purchases of items designated by the Department of Taxation as hurricane preparedness equipment, including portable generators, will be exempt from the Virginia sales tax. Portable generators must be priced at $1,000 or less, and other eligible items must be priced at $60 or less for each item.
August 7-9, 2009: -- School Supplies and Clothing. During this three-day period, purchases of certain school supplies, clothing and footwear will be exempt from the Virginia sales tax. Each eligible school supply item must be priced at $20 or less, and each eligible article of clothing and footwear must be priced at $100 or less.
October 9-12, 2009: -- Energy Star and WaterSense Qualified Products. During this four-day holiday, purchases of products meeting the Energy Star and WaterSense qualifications, such as certain energy-efficient appliances, will be exempt from the Virginia sales tax. Eligible products must be priced at $2,500 or less for each item, and be purchased for noncommercial home or personal use.
In addition, dealers may choose to absorb the sales and use tax on nonqualifying items sold during any of the holiday periods described above.
For additional information, visit our Sales Tax Holiday Information Center.
Since 1972, Virginia has conformed to federal income tax law. Whenever federal income tax law changed, the changes automatically affected Virginia income taxes, unless otherwise exempt. Beginning with the 2002 session of the Virginia General Assembly, Virginia's conformity to federal tax laws has been frozen as of a date specified by legislation enacted in each year's session. Under emergency legislation passed by the 2009 General Assembly and signed by Governor Kaine, Virginia's fixed date of conformity has been advanced to December 31, 2008. The special 30% bonus depreciation and the 5-year net operating loss carryback enacted by the Job Creation and Worker Assistance Act of 2002 are not included in this change. Please see the fixed date conformity Tax Bulletin 09-1 for further information.
Under legislation passed by the 2007 General Assembly, the personal exemption amount for filer, spouse, and dependents increases from $900 to $930 for taxable year 2008. In addition, the filing threshold for single filers and married individuals filing separate returns increases from $7,000 to $11,250, and the filing threshold for married individuals filing joint returns increases from $14,000 to $22,500. Further increases in filing thresholds will be phased in by 2012.
Under current Virginia law, members of the Armed Forces serving in a combat zone receive either the same individual income tax filing and payment extensions as those granted to them by the IRS, plus an additional fifteen days, or a one-year extension, whichever date is later. All extensions apply to spouses of military personnel also. Service members who claim this extension write “Combat Zone” at the top of their tax returns and on the envelopes used to file the returns, as well as on any notice issued by the Virginia Department of Taxation regarding tax collection or examination.
Effective for taxable year 2008, every member of the armed services deployed to noncombat service outside of the United States is also allowed an extension of his or her due date for filing and payment. The extension will expire 90 days after the completion of deployment. Service members who claim this extension should write “Overseas Noncombat” at the top of their tax returns and on the filing envelopes.
Effective for taxable year 2008, the Home Accessibility Features for the Disabled Credit is renamed and expanded. The credit will be known as the Livable Home Tax Credit, and will apply to purchases of supplies and other items needed to retrofit existing housing or incorporate into new construction to improve accessibility and/or visitability, and meet the eligibility guidelines established by the Department of Housing and Community Development. The credit, which is limited to $500 per taxable year, was not previously allowed for new construction.
For instructions on applying or transferring credits, see the LPC Application and Transfer Procedures (PDF 30Kb).
Effective for taxable year 2008, the Neighborhood Assistance Act Credit provisions for qualifying contributions have been expanded to include the value of donated automobiles and marketable securities. Valuations will be made in accordance with applicable IRS guidelines.
Effective for taxable year 2008, Senate Bill 1238 Chapter 796 requires pass-through entities doing business in the Commonwealth and having taxable income derived from Virginia sources to pay a withholding tax equal to five percent of their nonresident owners' share of income from Virginia sources. The tax payment will be made annually by the 15th day of the fourth month following the close of the entity's taxable year. For further information, see the Guidelines for Pass-Through Entity Withholding.
Effective for taxable year 2008, the personal exemption amount for filers and dependents will increase to $930. This change does not apply to exemptions for age or blindness. Beginning in 2008, the current filing thresholds of $7,000 and $14,000 will increase as follows:
| Filing Status | 2008 and 2009 | 2010 and 2011 | 2012 and Beyond |
|---|---|---|---|
| Single, or Married, filing separately | $11,250 | $11,650 | $11,950 |
| Joint | $22,500 | $23,300 | $23,900 |
Effective for taxable year 2009, the allowable deduction for contributions made to a prepaid tuition plan or savings trust account will increase to $4,000 per plan or account. The current allowable deduction is $2,000. As under current law, no restriction applies to the deduction amount for an individual who is 70 or older.
On May 19, 2008, the United States Supreme Court ruled in the case of Davis v. Kentucky, upholding the right of the states to grant an exemption to the taxation of income received from their own bonds while taxing income received on the bonds of other states. As a result, Virginia will not honor claims for refund filed in connection with the lower court ruling from 2007, which declared the practice unconstitutional.
Legislation enacted by the 2006 General Assembly, House Bill 5018, repeals the Virginia estate tax for the estates of decedents whose date of death occurs on or after July 1, 2007. The estates of decedents whose date of death occurs before July 1, 2007 remain subject to the estate tax provisions. In addition, the repeal of the Virginia estate tax does not affect the filing requirements for fiduciary income tax, regardless of when the date of death occurs.
Last Updated 11/12/2009 17:34
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