Tax Type
Individual Income Tax
Description
Tax-sheltered annuity plan
Topic
Taxable Income
Date Issued
11-18-1988
November 18, 1988
Re: Ruling Request
IRC §403 (b) - Tax Sheltered Annuity Plan
Dear*********************
This is in reply to your letter dated October 14, 1988, in which you request a ruling regarding the proper Virginia income tax treatment of amounts excluded from gross income for federal income tax purposes under §403 (b) of the Internal Revenue Code.
FACTS
Under the provisions or §403 (b) of the Internal Revenue Code, certain employees of nonprofit organizations and of public schools may elect to exclude contributions made to a qualified annuity plan from gross income in the year of the contribution. Specifically, you have asked whether such amounts properly excludable for federal income tax purposes are excludable for Virginia income tax purposes.
RULING
The Code of Virginia is silent as to whether amounts excluded from gross income for federal income tax purposes under §403 (b) of the Internal Revenue Code are excludable for Virginia income tax purposes. However, Virginia is a conformity state, and those amounts excluded from federal adjusted gross income for federal purposes are similarly excluded from Virginia adjusted gross income. Accordingly, by virtue of Virginia's conformity, amounts excluded for federal income tax purposes under §403 (b) of the Internal Revenue Code are excludable for Virginia income tax purposes.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner