A reminder: For the 2012 filing season, the Department's Customer Service telephone service hours for customers calling with general and account-specific questions are between 8:30 a.m. and 5:00 p.m. Monday through Friday. Our Live Chat service will be available even longer - from 8:00 a.m. to 8:00 p.m. Monday through Friday and from 8:30 a.m. to 12:00 noon on Saturdays.

Our contact information can be found here.

The due date for filing your 2012 Virginia Individual Income Tax return is Wednesday, May 1, 2013.  If you're thinking of taking advantage of Virginia's automatic six-month extension to file your Virginia taxes this year, here are a few reminders about the rules for automatic extensions.

• The extension only covers time to submit your tax return.  It does not allow you additional time to pay any balance of tax due. Payment for any tentative tax due must be submitted by May 1.
• The due date for returns filed under extension is November 1, 2013. You do not need to submit an application for the extension - it is applied automatically as long as you file your return by the end of the extension period.
• Interest will always apply to any tax amounts that are not paid by the original due date for filing. Interest will accrue from the original due date for filing through the date that all tax, penalty, and interest is paid in full.
• The extension penalty applies to unpaid tax if 90 percent of your total tax liability is not paid by the original filing due date and you file during the automatic extension period.  You will avoid the accrual of extension penalty by ensuring that 90 percent of your total tax due is paid by the original due date and by filing on or before the extended due date.
• Failure to file during the automatic extension period will void the extension and reset your due date back to the original due date.  The maximum late filing penalty of 30 percent will be assessed on the balance of tax due with your return.
• Even if you file on time during the extension period, failure to pay the tax due with your filing will cause the late payment penalty to be assessed.  In that circumstance, the late payment penalty will accrue at 6 percent per month on unpaid tax amounts, beginning with the date the return is filed.  This is in addition to any extension penalty that may have already been assessed.
• No penalty or interest are assessed on tax returns due a refund, regardless of whether they are filed during the extension period or after the extended due date.

The key to avoiding additional charges is to ensure that payment covering your entire tax due is submitted on or before the original due date for filing. 

Extension payments to cover tentative tax due can be submitted by check or money order with Form 760 IP, or through the Online Services for Individuals area of the Department's Web site.

For additional information on the assessment of penalty and interest, please see the Department's website topic "Penalties and Interest."  For general information on extension guidelines, computing tentative tax due, and making extension payments, see the Instructions for the 760 IP voucher.

Conformity to the Internal Revenue Code for Taxable Year 2012  

Effective for taxable years beginning on and after January 1, 2012, Virginia's fixed-date of conformity to the terms of the IRC will advance from December 31, 2011, to January 2, 2013, with limited exceptions.  Tax Bulletin 13-3 provides taxpayers with directions on how to reconcile this legislation with their 2012 Virginia income tax returns.

Quarterly Sales Tax filers will be required to file and pay Retail Sales and Use Tax (ST-9 and ST-9CO) electronically beginning with the July - September 2013 return, due October 20, 2013.  Taxpayers who are unable to file and pay electronically by the effective date may request a hardship waiver.

Please review the Department's various electronic filing options for submitting return and payment information now before the requirement goes into effect. Returns and payments can be filed electronically using eForms, Business iFile or Web Upload.

Taxpayers who claim the Virginia Telework Expenses Tax Credit are not allowed to exclude those expenses from Virginia Income. To the extent excluded from federal taxable income, any expenses incurred by a taxpayer in connection with the Telework Expenses Tax Credit must be added to the Virginia return.

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. Taxpayers are required to apply to the Department of Taxation between September 1 and October 31 of the year proceeding 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.

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.