April 16, 2026

Re:    § 58.1-1821 Application: Individual Income Tax    

Dear *****:

This will respond to your letter in which you seek a refund of individual income tax paid by ***** and ***** (the “Taxpayers”) for the taxable year ended December 31, 2019.

FACTS

The Taxpayers filed their Virginia individual income tax return for the 2019 taxable year in November 2020. The Taxpayers filed an amended federal return in April 2023. In July 2024, the Taxpayers filed an amended Virginia income tax return requesting a refund attributable to the federal change. The Department denied the refund on the basis that the amended return was filed outside the statute of limitations. The Taxpayers submitted an application for correction requesting that the Department issue the refund because the amended return was filed within one year of the federal change.

DETERMINATION

Generally, Virginia Code § 58.1-1823 allows a taxpayer to file an amended return within three years from the last day prescribed by law for the timely filing of the return. In this case, the Taxpayers did not file the amended return until July 2024, after the general statute of limitations had expired in May 2023, to claim a refund on a 2019 amended return. Virginia Code § 58.1-1823, however, also includes a number of exceptions to the general rule when specific circumstances are present.

Under Virginia Code § 58.1-1823 ii, a taxpayer may file an amended Virginia return claiming a refund within one year from the final determination date, as defined in Virginia Code § 58.1-311.2, for any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to such federal change or correction. If the federal change results from filing an amended federal return, Virginia Code § 58.1-311.2 3 provides that “final determination date” means the day on which the federal amended return was filed.

Although the Taxpayers were not notified that the Internal Revenue Service (IRS) accepted the federal changes reported on their amended federal return until June 2024, their amended federal return was filed on April 22, 2023. As such, the Taxpayers were required to file an amended Virginia return to claim a refund attributable to the federal changes by April 22, 2024, one year after the federal amended return was filed.

The provisions of Virginia Code § 58.1-1823 are clear and do not provide the Department with any discretion in enforcing the limitations period to apply for a refund attributable to a federal change. As stated above, the Taxpayers filed their 2019 Virginia amended return outside of the general three-year statute of limitations. In addition, the Taxpayers had one year from April 22, 2023, to file a 2019 amended return to claim a refund attributable to the federal changes. The Taxpayers filed their amended 2019 return on July 3, 2024, outside of the applicable one-year limitations period. Accordingly, the request for a refund of the overpayment of Virginia income tax for the taxable year ended December 31, 2019, cannot be granted.

The Code of Virginia sections cited are available online at law.lis.virginia.gov. 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/5126.Y