Bulletin Number
VTB 81-22
Tax Type
Individual Income Tax
Description
Self-Employed Persons, Employees Who Fish for a Living.
Topic
Returns and Payments
Date Issued
10-01-1981
For Virginia income tax purposes, a person who fishes for a living is either self-employed or an employee of a company engaged in fishing. This distinction is important when filing a Virginia estimated tax return. Since Virginia law parallels federal law, a person declared self-employed under federal law is also the same for Virginia purposes. This includes those who file Federal Schedule C or self-employed crew members who receive Federal Form 1099 F rather than a W-2. Thus, qualified self-employed persons must be able to provide a copy of Schedule C or Form 1099 F to show that they are not employees.
Self-Employed Filing Requirements:
Self-employed persons who fish for a living are required to file an estimated tax return by the 15th day of the month following the close of the taxable year, or file the income tax return by the first day of the third month following the close of the taxable year. They are liable for the same penalties for underestimation and failure to pay as any other person required to file and pay quarterly estimates. However, the penalty for underestimation or failure to file an estimated tax return would be for the last quarter only.
Employee Filing Requirements:
A person fishing for a living whose services are legally subject to the will and control of an employer whether paid in cash or fish, salary or commission, is an employee and not a self-employed person. If there is no withholding, it is up to such employee to file an estimated tax return.
To summarize, any person classified as an employee must file a declaration of estimated payments and pay the estimated tax quarterly on taxable income earned during the year and is subject to the same rules regarding estimated payments as any other taxpayer. Self-employed persons are required to file one declaration and pay the tax by January 15.
Anyone having questions may contact the Department of Taxation, Office Services Division, P. O. Box 6-L, Richmond, Virginia 23282. Attention: Taxpayer Assistance Section, or by telephone at (804) 257-8038.
Tax Bulletins