When a Virginia refund depends on an amended federal return, does the one-year clock run from when you filed the federal amendment or from when the IRS accepted it?

Plain-English summary

A married couple filed their 2019 Virginia return in November 2020. Years later they filed an amended federal return (on April 22, 2023) that lowered their federal tax, and in July 2024 they filed an amended Virginia return asking for a refund of the resulting Virginia overpayment. The Department denied the refund as too late, and the couple appealed, arguing they had filed within one year of the "federal change."

The Commissioner denied the refund. The deadlines work like this:

• General rule: you can amend a Virginia return for a refund within three years of the original due date (Va. Code § 58.1-1823). For 2019, that window closed in May 2023 — so the July 2024 amended return was already out of time under the general rule.
• Federal-change exception: § 58.1-1823(ii) gives you one extra year from the "final determination date" to claim a refund attributable to a federal change (capped at the Virginia tax decrease from that change). The key is how "final determination date" is defined.
• For an amended federal return, the "final determination date" is the day you FILED the federal amendment — not the day the IRS finished reviewing or accepting it (Va. Code § 58.1-311.2(3)). The couple filed their amended federal return on April 22, 2023, so their one-year Virginia window ran to April 22, 2024.
• The couple pointed out that the IRS didn't notify them it accepted the changes until June 2024. That did not matter — the clock runs from the filing date, so their July 3, 2024 Virginia claim missed the one-year window too.

Because both windows were missed and the statute gives the Department no discretion, the refund could not be granted.

What this means for you

Anyone amending a federal return that also lowers Virginia tax

Don't wait for the IRS to "finish." The one-year Virginia refund clock starts the day you file your amended federal return. File your amended Virginia return within that year even if the IRS hasn't acted yet — waiting for an IRS acceptance letter can blow the deadline, as it did here.

Tax preparers

Calendar two dates the moment a client files a 1040-X that affects Virginia: (1) the original three-year window under § 58.1-1823, and (2) one year from the federal amendment's filing date under § 58.1-1823(ii) / § 58.1-311.2(3). The later of the two governs, but here both had passed. The federal-change refund is also capped at the Virginia tax decrease attributable to the federal change.

Everyone

Refund statutes of limitation are hard deadlines. The Commissioner stressed the statute is "clear and does not provide the Department with any discretion" — sympathy for a late-arriving IRS letter cannot extend the time to claim a refund.

Common questions

Q: I amended my federal return and it lowers my Virginia tax. How long do I have to claim the Virginia refund?
A: One year from the "final determination date," which for an amended federal return is the day you filed that federal amendment (§ 58.1-1823(ii); § 58.1-311.2(3)) — or the general three-year window, whichever gives you more time.

Q: Does the clock start when the IRS accepts my amended return?
A: No. For an amended federal return it starts on the filing date, regardless of when the IRS notifies you it accepted the changes.

Q: The IRS didn't confirm my changes until after my one year ran out. Can Virginia make an exception?
A: No. The Commissioner held the statute gives the Department no discretion to extend the limitations period, even in that situation.

Q: Is the federal-change refund limited in amount?
A: Yes — it cannot exceed the amount of the decrease in Virginia tax attributable to the federal change or correction.

Citations and references

Statutes:

• Va. Code § 58.1-1823 — general three-year statute of limitations to amend a return for a refund, with exceptions
• Va. Code § 58.1-1823(ii) — federal-change exception: file within one year of the final determination date, limited to the decrease in Virginia tax attributable to the federal change
• Va. Code § 58.1-311.2 — definition of "final determination date"; for a change resulting from an amended federal return, the day the amended federal return was filed

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 26-19-0

Original ruling text

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