Tax Type
Income Tax
Description
Fixed Date Conformity
Topic
Basis of Tax
Date Issued
12-01-1993
93-9
Since 1972. Virginia has conformed to federal income tax law. Whenever federal income tax law has changed, the changes automatically affected Virginia income taxes, unless otherwise exempted. To minimize the impact of anticipated changes to federal law on Virginia taxpayers, the 1993 Virginia General Assembly enacted legislation that froze Virginia's conformity to federal law as it existed on December 31, 1992.
Because of changes in federal law contained in the Omnibus Budget Reconciliation Act (OBRA) of 1993, effective for taxable year 1993, some filers (individuals, fiduciaries and corporations) must recompute their federal adjusted gross income (FAGI) and federal taxable income ( FTI), so that it conforms to 1992 law, rather than 1993 federal law.
Generally, changes which decrease 1993 FAGI or FTI must be computed and entered as an addition on the appropriate line of the Virginia return. Changes which increase 1993 FAGI or FTI must be computed and entered as a subtraction on the Virginia return. If several modifications are required, the combined amounts must be totalled and entered as an addition or subtraction on the appropriate "Special Fixed Date Conformity' line.
No Fixed Date Conformity modifications are required for federal changes enacted prior to December 31. 1992, even if such changes were not effective until after December 31, 1992. In addition, no modifications are necessary for the provisions of the Internal Revenue Code which expired during taxable year 1992, but were retroactively reenacted during 1993.
Effective for taxable years beginning on or after January I, 1994, Virginia will again conform to the current Internal Revenue Code. However, there will be no adjustments or other transitional provisions allowed in post- 1993 taxable years to account for differences resulting from Fixed Date Conformity modifications required for taxable year 1 993.
Documentation pertaining to the adjustments must be attached to the return filed. It is anticipated that most Virginians will not be required to make Fixed Date Conformity modifications to their 1993 Virginia returns.
Additions to FAGI and Federal taxable income:
If a taxpayer is required to make a Fixed Date Conformity modification and itemizes deductions on the federal return, then the new Virginia Schedule A must be completed and the itemized deductions recomputed for Virginia tax purposes. If no modifications are required, then the federal Schedule A may be used for simplicity. Most taxpayers will not be required to complete Virginia Schedule A.
For additional information, contact the Taxpayer Assistance Section, Office of Taxpayer Services, Virginia Department of Taxation, P. O. Box 1880, Richmond, Virginia 23282 call (804) 367-8031 (Individuals) or (804) 367-8036 (Corporations).
Virginia Department of Taxation
FIXED DATE CONFORMITY
Since 1972. Virginia has conformed to federal income tax law. Whenever federal income tax law has changed, the changes automatically affected Virginia income taxes, unless otherwise exempted. To minimize the impact of anticipated changes to federal law on Virginia taxpayers, the 1993 Virginia General Assembly enacted legislation that froze Virginia's conformity to federal law as it existed on December 31, 1992.
Because of changes in federal law contained in the Omnibus Budget Reconciliation Act (OBRA) of 1993, effective for taxable year 1993, some filers (individuals, fiduciaries and corporations) must recompute their federal adjusted gross income (FAGI) and federal taxable income ( FTI), so that it conforms to 1992 law, rather than 1993 federal law.
Generally, changes which decrease 1993 FAGI or FTI must be computed and entered as an addition on the appropriate line of the Virginia return. Changes which increase 1993 FAGI or FTI must be computed and entered as a subtraction on the Virginia return. If several modifications are required, the combined amounts must be totalled and entered as an addition or subtraction on the appropriate "Special Fixed Date Conformity' line.
No Fixed Date Conformity modifications are required for federal changes enacted prior to December 31. 1992, even if such changes were not effective until after December 31, 1992. In addition, no modifications are necessary for the provisions of the Internal Revenue Code which expired during taxable year 1992, but were retroactively reenacted during 1993.
Effective for taxable years beginning on or after January I, 1994, Virginia will again conform to the current Internal Revenue Code. However, there will be no adjustments or other transitional provisions allowed in post- 1993 taxable years to account for differences resulting from Fixed Date Conformity modifications required for taxable year 1 993.
Documentation pertaining to the adjustments must be attached to the return filed. It is anticipated that most Virginians will not be required to make Fixed Date Conformity modifications to their 1993 Virginia returns.
Fixed Date Conformity Modifications
Additions to FAGI and Federal taxable income:
-
- 1. Gains from unspent insurance proceeds
2. Section 179 property deductions over $ 10,000
3. Discharge of indebtedness due to Title 11 Bankruptcy
4. Capital equipment expense in federal Enterprise Zone
5. Rollover of gain on securities into Specialized Small Business Investment Company (SSBIC)
- 1. Gains from unspent insurance proceeds
-
- 1. Exports of unprocessed timber which is a softwood (log, cant or similar form of timber)
2. 39 year recovery period for nonresidential property
3. Amortization of acquired intangibles
- 1. Exports of unprocessed timber which is a softwood (log, cant or similar form of timber)
Virginia Schedule A - New
If a taxpayer is required to make a Fixed Date Conformity modification and itemizes deductions on the federal return, then the new Virginia Schedule A must be completed and the itemized deductions recomputed for Virginia tax purposes. If no modifications are required, then the federal Schedule A may be used for simplicity. Most taxpayers will not be required to complete Virginia Schedule A.
Additional Information
For additional information, contact the Taxpayer Assistance Section, Office of Taxpayer Services, Virginia Department of Taxation, P. O. Box 1880, Richmond, Virginia 23282 call (804) 367-8031 (Individuals) or (804) 367-8036 (Corporations).
Rulings of the Tax Commissioner