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 the 30% and 50% bonus depreciation allowed for certain assets and the five-year carryback of federal net operating loss deductions generated in taxable years 2008 or 2009. Also, Virginia will continue to disallow the income tax deductions related to 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 the domestic production deduction under IRC § 199.

At the time the instructions went to print, 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, taxpayers will be required to make adjustments to their Virginia returns that are not described in the instruction booklet. Information about any such adjustments will be posted on the Department's website at www.tax.virginia.gov.

For taxable years beginning on or after July 1, 2012, but before July 1, 2014, retail companies are required to determine their Virginia taxable income by using an apportionment formula with a triple-weighted sales factor.  A single sales factor apportionment formula will be phased in over a three-year period beginning as a triple-weighted sales factor, followed by a quadruple-weighted sales factor, and then a single sales factor for taxable years beginning on and after July 1, 2015. 

The 2012-2014 Appropriations Act Item (273 of HB 1301 - Acts of Assembly 2012 Special Session I, Chapter 3) requires all corporations to file their estimated tax payments, annual income tax returns and final payments electronically beginning January 1, 2013.  This includes Taxable Year 2012 returns, tax due payments, extension payments and Taxable Year 2013 estimated payments.

• The annual corporate income tax return must be filed through the Federal/State e-File program, which is supported by numerous commercial software applications. For a list of approved commercial e-File software and more information, visit the Department's Corporate Income Tax page.

• Tax due payments can be made through the e-File system as a direct debit or by an ACH Credit transaction initiated through the corporation's bank.

• The Department provides two secure online options for electronically submitting estimated and extension payments, e-Forms and Business iFile. For more information and to determine the method that works best for you visit "Estimated and Extension Payments" on the Corporate Income Tax page of the Department's website.  Estimated tax payments and extension payments can also be submitted by an ACH Credit. 

Tax preparers who are unable to meet these requirements by the effective date may request a hardship waiver on behalf of any affected client.  In cases involving multiple clients, the preparer can submit one Waiver Request Form for all of the affected clients by attaching a list of the corporations' Names and FEINs, and indicating whether the preparer has a Power of Attorney on file with the Department of Taxation for each client. 

RICHMOND - The Virginia Department of Taxation has been alerted to a phone scam related to the new Virginia Tax Refund Debit Card.

The Department has received reports of phone calls being made to individuals, telling them that their "Way2Go prepaid MasterCard is locked for security reasons."  The automated caller then tries to get the listener to divulge personal information.

This is a phone scam.  The Department never makes automated calls and never solicits personal information in this manner.  If you receive such a call, hang up immediately.  If the call is recorded as a voice mail, delete it.

The Department goes to great lengths to protect the confidentiality and privacy of taxpayer information.  This scam is not related in any way to the security of the new tax refund debit card or any information that taxpayers may submit to the Department.  The Department cautions individuals never to give personal information to anyone calling unless they can verify the source.

A division of Xerox Corp. administers the new Virginia Tax Refund Debit Card and refers to it as the "Way2Go" card.

The Department is working with other government agencies, law enforcement, the debit card vendor, and the telephone companies involved to try and end the phone scam.  

If you aren't already, please consider taking advantage of the following resources/tools available to you:

Tax Professionals Hotline (804) 367-9286 - Open Monday through Friday, 8:30 AM to 4:30 PM to provide quick responses to your inquiries about client accounts or other tax questions for any tax type administered by the Department.

Tax Professionals Page on the Department's website - Provides electronic filing information, early release forms, instructional materials, and special contact information.

Laws, Rules and Decisions Page on the Department's website - Offers a variety of information, from Tax Bulletins to Legislative Summaries, to Rulings of the Commissioner.  This is a great tool for researching the latest interpretations of Virginia tax law.

Other website features and services you may find helpful are the Department's "What's New" pages for both individual and business tax types, tax forms, the Department's online filing and secure messaging services, and agency publications, just to name a few.   

If you aren't already, please consider taking advantage of the following resources/tools available to you:

Tax Professionals Hotline (804) 367-9286 - Open Monday through Friday, 8:30 AM to 4:30 PM to provide quick responses to your inquiries about client accounts or other tax questions for any tax type administered by the Department.

Tax Professionals Page on the Department's website - Provides electronic filing information, early release forms, instructional materials, and special contact information.

Laws, Rules and Decisions Page on the Department's website - Offers a variety of information, from Tax Bulletins to Legislative Summaries, to Rulings of the Commissioner.  This is a great tool for researching the latest interpretations of Virginia tax law.

Other website features and services you may find helpful are the Department's "What's New" pages for both individual and business tax types, tax forms, the Department's online filing and secure messaging services, and agency publications, just to name a few.   

If filing a joint return on Form 760, your client may qualify for a reduction in net tax of as much as $259.00 by taking advantage of the Spouse Tax Adjustment (STA).  Taxpayers must use Filing Status 2, and each spouse must have taxable income and their combined income must be at least $3,000.  

As you know, married taxpayers filing separately automatically receive the benefit of a lower tax rate on each of their individual returns but when filing jointly and combining their income they must take the STA 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 for your clients, complete Form 760, Lines 16a and 16b using the spouses separate VAGI amounts.  Verify that the total of the separate VAGIs equal the total on Form 760, Line 9.  An STA calculator is located on the Department's website.  

The Military Spouses Residency Relief Act provides exemptions from income and personal property taxes when certain criteria are met.  Under this law the spouse of military service members do not automatically become liable for income and personal property taxes as Virginia residents when they are present in Virginia solely because their spouse is a member of the military serving in Virginia.  Visit the Department's website for details.