If you make estimated income tax payments and file on a calendar year basis, your fourth and final payment for the 2012 taxable year is due January 15, 2013.  Paying your estimated income tax using the Department's free online service  is the fastest and most efficient way to make your payment. 

Advancement of Virginia's Fixed Date Conformity with the Internal Revenue Code

Virginia's date of conformity with the Internal Revenue Code (IRC) was advanced from December 31, 2010, to December 31, 2011, with limited exceptions. Virginia will continue to disallow: federal income tax deductions for bonus depreciation allowed for certain assets under IRC §§ 168 (k), 168(l), 168(m), 1400L and 1400N; the five-year carryback of federal net operating loss deductions generated in taxable year 2008 or 2009; and federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F). In addition, fixed date conformity adjustments continue to be required for Cancellation of Debt Income under IRC § 108(i) and for the domestic production activities deduction under IRC § 199.

At the time of this writing, the only required adjustments for fixed date conformity were those mentioned above. However, if federal legislation is enacted that results in changes to the Internal Revenue Code for the 2012 taxable year, you may be required to make adjustments to your Virginia return that are not described in the instructions. Information about any such adjustments will be posted on the Department's website at www.tax.virginia.gov.

Telework Expenses Tax Credit

The Telework Expenses Tax Credit is a new individual and corporate income tax credit for employers who incur eligible telework expenses pursuant to a telework agreement or conduct telework assessments. To be eligible for this credit, you are required to apply to the Department of Taxation between September 1 and October 31 of the year preceding the taxable year for which the tax credit is earned to reserve a portion of the credit. 

To qualify for a credit, the employer must enter into a signed telework agreement with the teleworking employee on or after July 1, 2012, but before January 1, 2017. This telework agreement must be in accordance with policies set by the Department of Rail and Public Transportation (DRPT), which are available on the Telework!VA website at www.teleworkva.org.

For details on this new credit and modifications to existing credits, see What's New for Tax Credits.

Telework Expenses Addition

If you claim the Virginia Telework Expenses Tax Credit, you are not allowed to exclude those expenses from your Virginia taxable income. To the extent excluded from federal adjusted gross income, any expenses incurred in connection with the Telework Expenses Tax Credit must be added back to Virginia taxable income on your Virginia return.

Debit Card Option for Refunds

Effective January 1, 2013, beginning with the 2012 taxable year, individual refunds will be issued through prepaid debit cards or by direct deposit to your checking or savings account. The paper check refund option is being replaced with the debit card option. If you are receiving a refund, you may choose either to receive a debit card or to use direct deposit by filling in the requested information on your return.

This change is one of the budget reduction measures included in the 2012-2014 Appropriations Act (Chapter 3, 2012 Special Session 1). For detailed information and answers to frequently asked questions, visit our Virginia Tax Refund Debit Card site.

Filing Threshold

The filing threshold amounts for Taxable Years 2012 and beyond have been increased. The new threshold for single individuals has increased from $11,650 to $11,950. The filing threshold for married couples filing jointly has increased from $23,300 to $23,900. The threshold for married couples who file separate returns has increased from $11,650 to $11,950.

For complete 2012 legislative information see the 2012 Legislative Summary on the Department's website.

As a result of new legislation, Virginia is implementing a significant change in the way you may receive your individual income tax refund.  There are two options for receiving your refund, direct deposit and the new refund debit card.  When filing your return, both paper and software versions of the individual income tax returns require that one of these two options be selected.  Requesting a paper refund check is no longer an option.

Before filing your return, please ensure that both the banking information and the birth date(s) have been entered correctly on your return.  If you use a Tax Preparer, please make sure the preparer selects the option that works best for you and that, when selecting direct deposit, the correct banking information is used.  While using direct deposit is still the fastest method for receiving your refund, the refund debit card offers a secure and convenient alternative to paper and takes about the same amount of time as paper refund checks did previously.

Please visit the Department's website for additional information such as where and how to use the refund debit card, how to use the card for free, transactions with associated fees, the fee schedule, and how the card works for joint filers. 

The fastest way to get your refund is to e-File your return and use Direct Deposit. 

• Refunds using any of the e-File options requesting Direct Deposit take approximately 1 week. 

• Refunds using any of the e-File options requesting a Refund Debit Card take approximately 2 weeks.

• Refunds from paper filed returns requesting Direct Deposit take approximately 6 weeks. 

• Refunds from paper filed returns requesting a Refund Debit Card take approximately 7 weeks. 

If you use a tax preparer and select Direct Deposit, be sure to instruct your preparer to e-File your return and select Direct Deposit as your refund method.  Some tax preparers use commercial software to prepare returns but print the return and submit the paper version to the Department resulting in longer processing time and a delay in your refund.

Reminder: Verify your bank account information before filing your return. If you use a tax preparer, be sure your preparer has your most recent bank information and does not copy information from a previous tax return.

Use e-File to get your refund up to five weeks faster; it's fast, easy, secure and normally contains fewer errors.  It is always faster and more efficient to file your return electronically.  You can file from your home computer using one of the following options or your Tax Preparer may e-File your return for you.  

• Free File - If your federal adjusted gross income is less than $57,000,you qualify for this FREE program and can e-File your federal and state tax returns for free.  To take advantage of Free File e-File, you must access one of the approved Free File software products through our website.  

• Free Fillable Forms -If you do not qualify for Free File, this free, electronic, online version of the Form 760 resident return and schedules allows you to complete your Virginia return online for free by entering your information as if you were completing a paper return.  This program is very similar to filing a paper return but as with the other electronic filing options, you will get your refund faster.  Access the fillable form and schedules on the Department's website, enter your information and then simply e-File your return from your computer when done.  

• Paid e-File - If one of the other options does not work for you, you can eFile using an approved software vendor.  Shop around to find the software that is right for you.  

Visit the Department's website for more e-File information.

The Department will begin mailing 1099G/INT statements for the 2012 taxable year later in January.  If you receive the 1099G/INT and are not familiar with it, visit the 1099G/INT FAQ at the Department's website for more information.

• Gather your tax records in advance and make sure you have all your records, including W-2s and 1099s before you begin filling out your return.  Each year, many taxpayers have to amend their returns because they file prior to having all employment and income statements.  The filing of multiple returns causes delays in the processing of the returns and, in turn, delays your refund.  In most cases, you will get your refund faster by waiting for all your withholding statements before filing than by filing too soon and having to file amended returns.

• Make sure that you have all of your information and that all of the information for your spouse and dependents, if applicable, is listed on your return.  A Social Security Number (SSN) or individual tax identification number (ITIN) is required for each individual claimed as a dependent on your return.

• Don't wait until the last minute to file your return.  File early in order to avoid the last minute rush to meet the deadline.  Even if you owe money, you can file early but not pay until the due date.  You can e-File your return and, by using Direct Debit, schedule your payment for any date in the future right through the due date of your return.  This will allow you to retain your funds until the last minute without having to take any further action or worry about remembering to send your payment.  Visit the Department's website  for more information. 

Paper returns take longer for the Department to receive and process and result in more errors than e-Filed returns.  The following will help ensure your paper return is processed as quickly as possible.

• Check your math.  Simple arithmetic errors on paper returns are a common reason for further delays in getting your refund.

• Double-check all SSNs.  Please make sure all Social Security Numbers are correct.

• Include all documents with your filing.  Be sure to attach all applicable W-2s, 1099s, VK-1s, schedules and any documentation required with your tax return.  Your tax return is not complete unless everything required is attached.  Also, make sure all schedules and attachments have the primary taxpayer's SSN at the top of the document. 

• Print legibly and use black ink.  Do not use metallic ink.  Items on your return, especially the SSNs and dollar amounts, may be read and/or keyed incorrectly if not legible, resulting in further delays for your refund or resulting in an error in processing your return.

• If you send your return by Certified Mail, this requires special handling by the Post Office and the Department and, as a result, it takes longer for the Department to receive and begin processing your return.  

The following will help you avoid the most common errors made on individual income tax returns, often resulting in delays processing both paper and electronically filed returns.

• If your name and/or your spouse's name has changed for any reason since the filing of your previous year's return, please fill in the oval that states "Name has changed since last filing." 
• If your address is different from the previous year's return, please fill in the oval on the address line.
• Verify that all SSNs and/or ITINs are included on the return and that they are correct.
• If you are claiming a subtraction, deduction, contribution, or credit, please be sure to attach the supporting documentation and enter the valid codes on Schedule ADJ, as applicable.  Documentation could include an out-of-state return, Schedule ADJ, Schedule OSC, or Schedule CR.  If you are taking a subtraction using Code 99, attach the supporting documentation explaining why the subtraction was taken.
• If you are claiming withholding, attach all applicable W-2, 1099, or VK-1 forms showing the amount of state tax paid to Virginia.
• Please be sure the first four letters of your last name, and the first four letters of your spouse's if  you are filing a joint return, are entered on the return.
• Please be sure to provide your birth date, and your spouse's birth date if you are filing a joint return, as requested on the return.  This is now required on all returns and used to help ensure your identity.
  • When filing on paper, be sure to enter and add the total number of exemptions.  Your exemptions are automatically added for you on eFiled returns.
  • If you made estimated payments and/or extension payments that are being claimed on the return, verify the amount of payments made for the year before filing your return.  You can viewthe amount paid during the year online by setting up an account on the Department's website or you may call Customer Services at (804) 367-8031 to verify the amount.
  • If you file more than one return with different computations on each return, indicate which return is the amended return by filling in the "Amended Return" oval at the top of that return.
• When submitting a paper return, ensure that both the front and back pages are sent.
• When selecting Direct Deposit, always verify that the bank account information is correct.  If you use a tax preparer, make sure the preparer is using the most recent, correct bank account information and is not using information for an incorrect or closed account from a previous tax return. 
• When filing a prior year return, be sure to use the correct form for the year in which the return is being filed.  Prior year returns are also located on the Department's website.
• The most common error when using software to complete your return is the use of outdated software.  If you use online e-File software, the software should be updated. However, if you or your preparer purchase the software the software must be updated each year using updates provided by the vendor,the correct version must be used to ensure your return is filed correctly.
• Withholding amounts must equal the total Virginia income tax withheld on W2s, 1099s and/or Schedule INC.
• When filing Form 760PY, the itemized deductions in Columns A and B do not equal the total Virginia itemized deductions.  The itemized deductions in Columns A and B must equal the total Virginia itemized deductions.
• Always use your most current taxpayer information, especially your address and bank account information.  Please verify this information and make corrections prior to submitting your return.  If not, there will be delays in processing your refund.

The Military Spouses Residency Relief Act provides an exemption from income and personal property taxes when certain criteria are met.  Under this law, spouses of military service members do not automatically become liable for income and personal property taxes as Virginia residents in certain cases.  Visit the Department's website  for details.

If you are married and file a joint return, you may qualify for a reduction in your net tax of as much as $259 by taking advantage of the Spouse Tax Adjustment (STA) on Form 760.  To qualify you must use Filing Status 2, you and your spouse must have taxable income, and your combined income must be at least $3,000. 

Virginia's income tax is imposed at graduated rates ranging from 2% to 5.75%.  Married taxpayers filing separately automatically receive the benefit of a lower tax rate on each of their individual return and incomes.  When filing jointly, couples must take the STA in order to receive the benefit of a lower tax rate.

The STA is calculated based on each spouse's portion of the joint Virginia Adjusted Gross Income (VAGI).  To claim the STA, complete Form 760, Lines 16a and 16b, with your separate VAGI amounts.  Verify that the total of the separate VAGIs equals the total on Form 760, Line 9.  You must complete these lines and the separate VAGIs must equal the total on Line 9 or you will not receive the STA benefit when your return is processed.

An STA calculator is located on the Department's website to help you compute your STA amount.  

Telephone service hours for customers calling with general and account-specific questions are 8:30 AM to 5:00 PM, Monday through Friday.

Live Chat service hours for general questions are 8:00 AM to 8:00 PM, Monday through Friday. From January 26, 2013 and through April 27, 2013, Live Chat will also be available on Saturdays from 8:30 AM until noon.

Walk In service hours are 8:30 AM - 4:30 PM, Monday - Friday.

Please visit our "Contact Us" page for contact information and any changes in hours.  At this time, the Department has not determined if extended hours will be necessary for the filing season.