Document Number
95-125
Tax Type
Employer Income Tax Withholding
Description
Retired Employees
Topic
Withholding of Tax
Date Issued
05-19-1995
May 19, 1995



Re: Request for Ruling: Withholding Tax


Dear*************

This will reply to your letter of May 4, 1995, in which you request a ruling on the applicability of Virginia withholding taxes to certain payments made to surviving spouses of retired employees of *************("the Taxpayer").
FACTS

The Taxpayer and several affiliates entered into a collective bargaining agreement with Cl union whereby the Taxpayer and affiliates pay semi-annual benefits to surviving spouses of their retired employees. The Taxpayer requests a ruling as to whether such payments are subject to Virginia withholding tax.
RULING

Code of Virginia §58.1-460 defines wages as:
    • ...wages as defined under § 3401 (a) of the Internal Revenue Code, as well as any other amounts from which federal income tax is withheld under the provisions of §§ 3402 and 3405 of the Internal Revenue Code...

Accordingly, to the extent that the payments you describe constitute wages subject to federal withholding, they likewise constitute wages for Virginia purposes. However, a recipient may be able to claim an exemption from withholding if he meets any of the following conditions:
    • 1. He had no liability for Virginia income tax last year and does not expect to have any liability for this year.

      2. He expects his Virginia adjusted gross Income to be less than $5,000 (single), $8,000 (married, filing a joint or combined return) or $4,000 (married, filing a separate return).

      3. He lives In Kentucky or the District of Columbia, and commutes on a daily basis to his place of employment in Virginia.

      4. He is a domiciliary or legal resident of Maryland, Pennsylvania or West Virginia whose only Virginia source Income Is from salaries and wages, and such salaries and wages are subject to income taxation by his state of domicile.
We have enclosed Form VA-4 which should be furnished to each payee who wishes to claim an exemption from withholding. You may distribute photocopies of this from to the payees, or at your option, order additional forms by calling*****************.
                        • Sincerely,



                          Danny M. Payne
                          Tax Commissioner




OTP/9703P

Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46