Virginia State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Virginia, with full citations and the original source on every page.
No Virginia rulings match these filters
Try a different search term or clear the filters.
Virginia assessed me income tax based on IRS data, but I didn't live or work in Virginia that year — isn't saying so enough to cancel the assessment?
No — the assessment was upheld because the taxpayers never backed up their claim. IRS information suggested a married couple should have filed a 2019 Virginia return; they hadn't, and when the Departm…
I filed an old Virginia return late and asked for the overpayment to be credited forward instead of refunded — does the three-year refund deadline still block it?
Yes — the credit was denied and the resulting assessments were upheld. A taxpayer (now deceased) filed his 2016 Virginia return on August 13, 2020, asking that the overpayment be CREDITED as an estima…
My spouse moved to another state for work and voted and got licensed there while I stayed in our Virginia home — are we both still Virginia residents?
Split decision — the husband successfully changed his domicile to State A, but the wife, who never left Virginia, remained a Virginia resident. The husband took a job in State A in December 2019, inte…
My tax software wrongly claimed a Virginia credit for D.C. tax my commuting spouse never owed — can the assessment be abated because it was a software error?
No — the assessment stands. A Virginia couple's 2021 joint return claimed a credit for tax paid to the District of Columbia because the wife commuted to work there. But D.C. generally cannot tax nonre…
Virginia is still collecting income tax assessments from the late 1990s and 2000s — doesn't the seven-year collection statute of limitations make them uncollectible?
No — the assessments remain collectible. A nonfiler was assessed Virginia income tax for twelve years spanning 1998 through 2011 and argued the SEVEN-YEAR collection statute of limitations had run. Bu…
I moved to another state for a permanent job, but COVID closed the office and I came back to Virginia — did I ever stop being a Virginia resident for income tax?
He stayed a Virginia domiciliary resident for 2020 — though he gets a credit for the other state's tax. The taxpayer moved to State A in October 2019 for a permanent job and leased a home there. When …
Virginia denied my noncash donation deductions for missing appraisals and receipts — can I at least keep a reduced $5,000 or $500 deduction per donation?
Mostly denied — and the fallback theory failed: a deduction that misses its tier's substantiation is denied IN FULL, not reduced to a lower tier. A married couple claimed noncash charitable contributi…
We didn't file a 2019 Virginia return because the income was earned in another state — are we still Virginia residents, and can we at least get credit for the other state's income tax?
The couple lost on residency but kept a path to relief. This was the merits determination after P.D. 24-21 (3/13/2024) gave a husband and wife one final chance to file a 2019 Virginia return or comple…
I trade options for my own account and reported my costs as cost of goods sold on Schedule C — can my trading losses offset my ordinary income, or is Virginia right to disallow them?
Mostly a loss, with one adjustment in the taxpayer's favor. An options trader reported his securities costs as COST OF GOODS SOLD on federal Schedule C for 2020; the Department disallowed the COGS and…
We donated furniture, clothing, and household items to charities all year — no single dropoff was worth $5,000, so why is Virginia denying our itemized deductions for lack of an appraisal?
The deductions were denied — because the substantiation thresholds apply to the YEAR'S TOTAL of similar items, not to each dropoff, and a Form 8283 without underlying proof of value substantiates noth…
I sold my Virginia home and moved to another state, but kept my Virginia driver's license because of pandemic DMV closures — am I still taxable as a Virginia resident?
The taxpayer WON — selling her Virginia home was 'a very strong example' of intent to abandon Virginia, and the 2020 assessment was abated. The case began as a nonfiler inquiry (IRS information sugges…
I left Virginia years ago but still owned my old house and stayed there for two months between out-of-state jobs — does that pit stop make me a Virginia resident again?
The taxpayer WON — a two-month stopover at his old Virginia house between out-of-state jobs did not reestablish Virginia domicile, and the 2020 assessment was abated. The case began as a nonfiler inqu…
I moved from Virginia to Puerto Rico to live there permanently, but I kept my Virginia driver's license — did I really change my domicile, or does Virginia still tax me?
The taxpayer WON — the totality of the factors showed he changed his domicile from Virginia to Puerto Rico before 2019, and the assessment was abated. The Department had opened a nonfiler inquiry afte…
I disputed a Virginia income tax assessment because I'm a military spouse who shouldn't have been taxed as a resident — why won't the Department even look at my case, three years later?
Because both the 90-day appeal deadline AND the separate 3-year protective-claim-for-refund deadline had already expired by the time she filed — years of informal correspondence with the Department di…
The Department says it collected on my old tax bills before the deadline expired, but I haven't seen proof — can I get the Department to reconsider its ruling?
Only if you meet one of four narrow legal criteria for reconsideration — simply asking for proof isn't one of them, though the Department provided the proof anyway. In an earlier ruling (P.D. 24-23), …
The IRS says it adjusted my federal return and increased my income, but I think the IRS made a mistake — can Virginia's assessment based on that IRS change be corrected?
Generally no — the Department does not look behind a final IRS determination of your federal income, though it gave this specific taxpayer one more chance to prove he's actively contesting the IRS's n…
My husband's serious medical condition delayed us filing our tax returns by years — can Virginia still deny our refund because of the statute of limitations?
Yes — Virginia's three-year refund deadline has no built-in exception for medical hardship, however sympathetic the circumstances. A husband and wife filed their 2015 Virginia return in November 2019 …
I donated clothes, books, furniture, and household items to charity across three years — why did Virginia allow some of my deductions and deny others?
Because Virginia's (federally conformed) substantiation rules require progressively more paperwork as a donation category's value rises, and this couple only had enough proof for their SMALLEST-value …
The IRS already adjusted my federal return for the same year Virginia is auditing -- doesn't that mean Virginia's assessment is wrong?
No — not when the IRS transcript actually confirms the same result. A husband and wife who filed a joint 2020 Virginia return couldn't substantiate business expense deductions claimed on their federal…
My representative was supposed to mail my Virginia investment-credit application but it arrived after the deadline -- can the Department make an exception?
No — this is a near-identical companion to the same-day P.D. 24-135: a taxpayer's representative filed the application for Virginia's qualified equity and subordinated debt investment credit (Va. Code…
I moved out of state for work years ago and pay taxes there now, but I still have a Virginia driver's license and a house I visit regularly — does Virginia still consider me a resident?
Yes, likely -- because the taxpayer kept renewing his Virginia driver's license and returned regularly to a Virginia residence he retained, the Department found he hadn't proven he abandoned his Virgi…
I invested in a qualified small business and missed the April 1 deadline to apply for Virginia's investment tax credit because my representative mailed it late — can the deadline be excused?
No — the April 1 deadline for Virginia's qualified equity and subordinated debt investment tax credit is a hard deadline with no exceptions, even when a taxpayer's own representative was responsible f…
I believed the letters approving my business's investment as credit-eligible meant I didn't need to separately file the credit application by the deadline — can Virginia excuse the late filing?
No — Virginia's April 1 deadline for the qualified equity and subordinated debt investment credit is a hard deadline, and believing that other paperwork already covered the requirement doesn't excuse …
I withdrew money from my Thrift Savings Plan, and part of my contributions were already taxed by another state — can I subtract that portion on my Virginia return?
Yes, partially — Virginia allows a subtraction only for the portion of a retirement distribution that traces back to contributions that were both deductible for federal tax purposes AND already taxed …
The Department ruled against me on my residency dispute, and I found six other cases where taxpayers won similar arguments — can I get my case reconsidered on that basis?
No -- simply disagreeing with the result, even by pointing to six other cases where taxpayers WON similar domicile arguments, doesn't meet any of the four narrow criteria Virginia requires for reconsi…
My spouse works as a law clerk in the Commonwealth's Attorney's office -- can we claim Virginia's $15,000 state-employee salary subtraction on our joint return?
No -- the subtraction was properly disallowed. Virginia lets a taxpayer subtract the first $15,000 of salary for each 'state or federal employee' whose total annual salary from all employment is $15,0…
The IRS increased my income on audit, but I disagree -- can Virginia just accept the return I want to file instead of the IRS's adjusted numbers, and can I still claim my overpayment credits and age deduction?
No on all three points -- the assessments were upheld. The IRS audited a taxpayer's 2018 and 2019 federal returns and increased her adjusted gross income and self-employment income; because she never …
We moved to Virginia partway through the year and paid income tax to our old state, another state where a bonus was sourced, and California -- can we credit all of that tax paid against our Virginia tax?
Partly -- two of the three credits were reinstated, but the California credit was correctly denied for good. A couple moved to Virginia mid-2022 and filed a part-year resident return claiming credit f…
The Department didn't contact me for 13 years and then suddenly filed a wage lien on decades-old tax debt -- is it too late for them to collect, and did interest keep piling up the whole time?
Split result. A taxpayer's Virginia income tax assessments from 1997-1999 remained legally collectible, but interest and penalty stopped accruing years before the Department's most recent collection a…
The IRS increased my taxable income based on money a payment app reported as business income, but it was really just reimbursements from friends and family -- can I get Virginia to ignore the IRS's number?
No -- the assessment was upheld, because Virginia simply followed the IRS's own adjusted number. The IRS increased a taxpayer's 2020 federal adjusted gross income (FAGI) after a company that operates …
I filed an appeal of old Virginia income tax assessments years late, claiming the 1099s the Department relied on were the result of fraud by the company that issued them -- can the Department still fix my assessments?
No relief on any front -- the appeal was years too late, no valid protective claim existed, and even on the merits the taxpayer had no proof. A Virginia resident was assessed individual income tax for…
I filed my Qualified Equity and Subordinated Debt Investments Tax Credit application a couple weeks late because I thought the deadline was April 15 -- can the Department still grant the credit?
No -- the deadline is strict and doesn't bend for an honest mistake about the date. An individual invested in a qualified business venture during 2023 and applied for Virginia's Qualified Equity and S…
I invested in a qualified Virginia business but didn't get the required certification paperwork from the company in time -- can I still get the equity investment tax credit if I attach my documents to my income tax return instead of filing the separate credit application form?
No on both counts -- the deadline is strict, and attaching supporting paperwork to your income tax return doesn't substitute for filing the actual credit application. An individual invested in a quali…
I filed my Qualified Equity and Subordinated Debt Investments Tax Credit application a couple weeks late because I thought the deadline was April 15 -- can the Department still grant the credit?
No -- this is a byte-for-byte twin of this corpus's P.D. 24-84, same day, same outcome, a different taxpayer. An individual invested in a qualified Virginia business during 2023, filed Form EDC for th…
My spouse is a deployed servicemember and I filed our Virginia income tax return late -- does the combat zone extension excuse my late-filing penalty, and what about interest and other penalties?
Partially -- the late-filing penalty was abated because of the combat zone extension, but other penalties and interest that accrued BEFORE the deployment began still applied. A taxpayer's husband, a m…
We claimed itemized deductions for property taxes, mortgage interest, and charitable donations, but got audited and lost the deductions -- can we keep our refunds since we didn't know we needed appraisals for donations over $5,000?
No -- not knowing about the documentation requirements doesn't excuse a taxpayer from Virginia's substantiation rules, and each itemized deduction category requires its own specific proof (tax bills a…
My employer's office is in Virginia, but I worked remotely from my home state and my employer withheld Virginia tax anyway -- am I entitled to a full refund even though I also excluded that income on my home state's return?
Yes -- what matters is WHERE the work was actually performed, not where the employer's office is located, and the Department can't rely solely on another state's tax return to deny a Virginia refund. …
I'm active-duty military stationed outside Virginia claiming a different home state -- is claiming a tax credit on my other state's return enough by itself to prove I'm not a Virginia resident?
No -- claiming a credit on another state's return for taxes paid to Virginia doesn't, by itself, prove you're not a Virginia domiciliary resident; you need actual evidence like a State of Legal Reside…
I lived and worked in Maryland for over two years and filed a Maryland resident return -- can Virginia still tax me as a resident because I kept my house and driver's license here?
Yes -- Virginia can still tax you as a domiciliary resident if you never actually abandoned your Virginia connections, even after living and working elsewhere for years. A taxpayer and his family move…
I came to Virginia on a student visa, worked here for a few years, then moved back to my home country before returning later on a work visa -- was I still a Virginia resident, and did a 1099 issued to my old Virginia address make me taxable here, for the year I was living abroad?
No to both -- the assessment was abated. The Department flagged that a taxpayer may have owed 2019 Virginia income tax, based on IRS information; no Virginia return was on file, and when he didn't ful…
I sold an out-of-state rental property and had to report depreciation recapture as income -- can I subtract the part attributable to years before I moved to Virginia, since I never got a Virginia tax benefit from those deductions?
No -- Virginia doesn't allow a subtraction for IRC § 1250 depreciation recapture just because some of the underlying depreciation deductions were taken before you were a Virginia resident. A married c…
I mailed my Virginia return years ago, but the Department has no record of ever receiving it and now says my refund claim is too late -- does it matter that I can't prove when I mailed it?
No -- without proof the Department actually received (or that the taxpayers can otherwise establish timely mailed) an earlier return, the later-filed return controls, and the refund claim was time-bar…
The IRS adjusted my federal return and I think the IRS got it wrong -- can Virginia hold off on assessing me while I keep fighting the IRS?
No -- the assessment was upheld. The IRS notified the Department that it had adjusted a taxpayer's 2019 federal return (reducing her itemized deductions after a 2022 examination), and because no amend…
I moved for a new job in another state, but I still own a Virginia vacation home and briefly got a Virginia driver's license during the move -- does that make me a Virginia resident for tax purposes?
Not necessarily -- a Virginia driver's license and a Virginia vacation home are only two factors among many, and here they didn't outweigh the rest of the evidence pointing to a genuine move. The Depa…
My tax preparer e-filed my return and I mailed an amendment years ago, but Virginia has no record of either -- shouldn't the Department have told me my return was missing, instead of letting the refund deadline quietly expire?
No -- Virginia's tax system puts the burden on the taxpayer to make sure a return is actually filed and received, and the Department has no duty to proactively notify anyone that a return is missing. …
I thought Virginia's filing extension was automatic, and I had other personal hardships that delayed my filing -- can I still get my refund even though I filed my return more than three years after the original due date?
No -- personal hardship and a misunderstanding about Virginia's extension don't extend the refund deadline. A taxpayer filed her 2019 Virginia individual income tax return in June 2023 seeking a refun…
I'm taxed by Virginia as a domiciliary resident and by Maryland as an actual resident -- Virginia gives me credit for Maryland's STATE income tax, but why won't it credit the Maryland COUNTY (local) tax I also had to pay?
It doesn't -- Virginia's out-of-state tax credit does not extend to Maryland's local county income tax, only the state-level tax, and the Department has already settled this question against this same…
The IRS adjusted my income and I'm actively challenging that adjustment in federal Tax Court, with no decision yet -- does Virginia have to wait for the Tax Court before it can assess tax based on the IRS's number?
No -- Virginia assesses tax based on the IRS's adjustment as it currently stands, even while a taxpayer's Tax Court challenge to that adjustment remains undecided. A taxpayer filed an amended 2019 Vir…
The IRS has determined my federal tax debt is currently uncollectible -- doesn't Virginia's conformity to federal law mean the Department has to stop collecting on my old Virginia assessments too?
No -- an IRS determination that your federal tax debt is uncollectible has no effect on Virginia's own, separate collection authority. An individual with unpaid Virginia income tax assessments spannin…
I'm an active-duty servicemember with a Virginia 'home of record,' but I bought a home, got a driver's license, registered to vote, and registered my vehicles in the state where I was actually stationed -- am I still a Virginia domiciliary resident just because Virginia is listed as my home of record?
No -- 'home of record' and legal domicile are different things, and this servicemember's real, affirmative connections to his duty-station state controlled. A military servicemember had listed Virgini…
I moved out of Virginia for a job years ago and have lived and worked in two other states since, but my spouse, kids, some vehicles, and my driver's license and voter registration stayed in Virginia -- am I still a Virginia resident for income tax purposes?
Still a Virginia domiciliary resident -- because he never fully cut his Virginia ties even after living and working in two other states for years. The Department received IRS information suggesting th…
My spouse died, then COVID hit, and I had serious health problems -- can those circumstances excuse filing our tax return late enough to still get our refund/credit?
No -- none of those three circumstances extend Virginia's strict 3-year refund deadline. A husband and wife filed their 2017 Virginia return in May 2021 -- about four years late -- reporting an overpa…
The Department assessed me for Virginia income tax based on IRS information, and I told them my husband didn't work in Virginia that year -- isn't that enough to get the assessment corrected?
No -- a domiciliary resident of Virginia owes Virginia tax on all their income regardless of where they actually worked, so simply asserting 'he didn't work in Virginia' doesn't address whether Virgin…
I claimed gambling losses and mortgage interest as itemized deductions, and the Department disallowed them for lack of proof -- what kind of documentation actually counts as proof of gambling losses?
Casino ATM withdrawals and direct payments to casinos count as proof of gambling losses; unrelated ATM withdrawals don't, and a Form 1098 is enough to prove mortgage interest. A taxpayer claimed medic…
I moved from Virginia to California partway through the year and paid tax to both states on my wages -- can I claim a credit on my Virginia part-year return for the California tax I paid?
No -- California is one of a handful of states with a special reciprocal-credit arrangement that flips which state grants the credit, so the Virginia credit was correctly denied. A taxpayer was a Virg…
I moved into my fiancee's home in another state years ago, but I still own a Virginia home I use as a vacation property and visit regularly, kept renewing my Virginia driver's license, and stayed registered to vote in Virginia until recently -- am I still a Virginia domiciliary resident for tax purposes?
Still a Virginia domiciliary resident -- largely because he renewed his Virginia driver's license in November 2020, five years after he says he moved out. The taxpayer had lived and worked in Virginia…
I have old Virginia income tax assessments from 2010 and 2011 that I never appealed because I didn't live in Virginia at the time -- can I appeal them now, over a decade later?
No -- far too late. A taxpayer had outstanding Virginia income tax assessments for failing to file returns for the 2007, 2008, and 2017 taxable years; after Department liens collected part of the mone…
If my employer relocates me out of state and I later separate from my spouse who stays in Virginia, have I abandoned my Virginia domicile?
Yes, in this case the taxpayer successfully proved he'd abandoned his Virginia domicile -- even though he kept his Virginia driver's license for years and retained some Virginia property connections t…
The Department is still trying to collect Virginia income tax assessments from 2009-2013 -- doesn't the current 7-year collection statute of limitations mean these are too old to collect anymore?
No -- the current 7-year collection deadline only applies to assessments made on or after July 1, 2016, and these were older. A taxpayer's Virginia income tax assessments for 2009 through 2013 (issued…
I moved out of Virginia years ago for work, but my spouse and kids stayed in our Virginia home, I kept renewing my Virginia driver's license and voter registration, and I even teleworked from Virginia during the pandemic while still filing returns in my new state -- am I still a Virginia domiciliary resident?
Still a Virginia domiciliary resident -- his own conduct, especially teleworking from the family's Virginia home during the pandemic while still filing returns in his new state, undercut his domicile-…
Browse Virginia rulings by topic
These are official tax letter rulings and advisory opinions issued by Virginia's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.