September 7, 2021
Re: § 58.1-1821 Appeal: Individual Income Tax
Dear *****:
This will respond 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, 2017. I apologize for the delay in responding to your request.
FACTS
The Taxpayers, a husband and wife, filed a joint 2017 Virginia individual income tax return. Subsequently, the wife filed a separate part-year return. As a result, the Department changed the husband’s return to married filing separate status, reduced his standard deduction and exemption amounts accordingly and issued an assessment. The Taxpayer appealed and submitted another 2017 individual income tax return, choosing the married filing a joint return status.
DETERMINATION
Married taxpayers who file a joint federal income tax return may elect to file either a joint return or separate returns to calculate their Virginia individual income tax liability. See Virginia Code § 58.1-324. Married taxpayers who elect to file separate returns must allocate their standard deduction and personal exemption amounts accordingly. See Title 23 of the Virginia Administrative Code (VAC) 10-110-170. Taxpayers who choose to file jointly, however, have their joint Virginia taxable income (VTI) determined as if both were Virginia residents. As a result, the wife’s entire income for the 2017 taxable year must be included in the computation of VTI on the joint full-year return.
The Taxpayers submitted a joint return for the 2017 taxable year along with their appeal. Because of the self-reporting nature of the individual income tax filing system, the Department must assume it was the intent of the parties to file a joint return for the entire 2017 taxable year. As such, the return will be processed and the assessment adjusted accordingly. If the Department makes further adjustments to the return, the Taxpayers will have 90 days from the date of the notification of the any adjustment in which to appeal.
The Code of Virginia sections and regulation cited are available online at www.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, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/3446-C