Is gig work taxable? 

Even if it’s part-time, temporary, or side work, the income you earn through an app or website for services like making deliveries, selling goods online, or driving for hire is typically taxable. 

Employee versus independent contractor

If you are an employee, your employer should withhold Virginia income tax from your paycheck and submit that portion of your wages to us on your behalf. Or, if you’re an independent contractor, you may have to make estimated payments of income tax, typically on a quarterly basis. Either way, you’re required to report this income to us when filing your taxes. 

Why am I receiving a Form 1099-K?  

If you’ve received $600 or more in the previous calendar year from your gig work, you may receive a Form 1099-K from a third-party settlement organization (TPSO). 

Form 1099-K reports the payment transactions those organizations process for platforms like electronic marketplaces, peer-to-peer payment companies, and other similar businesses. Please note, a payment reported on Form 1099-K is presumed to be taxable income, unless a specific exemption applies. Descriptions like the note attached to a service payment on a peer-to-peer app, for example, do not determine the taxability of that income. Please also note that income from gig work is generally taxable regardless of whether you received a Form 1099-K from a TPSO.

Virginia Interest Rates Change for the Fourth Quarter

Virginia's interest rates will change for the fourth quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the fourth quarter of 2022 will be 6% for tax underpayments (assessments) and 6% for tax overpayments (refunds) by noncorporate taxpayers. Accordingly, the Virginia rates for the fourth quarter of 2022 will be 8% for tax underpayments (assessments) and 8% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 22-11.  

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

2022 Legislative Summary Published

The 2022 Legislative Summary is now available. 

The Legislative Summary is published by Virginia Tax as a convenient reference guide to state and local tax legislation enacted by the 2022 Session of the General Assembly.

The Summary includes a general description of enacted legislation affecting:

• State taxes administered by Virginia Tax, and
• Local taxes for which Virginia Tax assists with administration, or on which Virginia Tax renders advisory assistance.

References to chapter numbers are to the corresponding chapters in the Acts of Assembly, which may be viewed at: https://lis.virginia.gov. Effective dates of the legislation vary and are set out in each description.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

The Summary is intended to provide a synopsis of enacted legislation and is for informational purposes only. The Summary is not a substitute for the actual state law, local ordinances, or tax related regulations. 

View the Legislative Summary

If you have additional questions, please visit https://www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions or 804.367.8037 for business tax questions.

The requirement that certain Retail Sales and Use Tax dealers make an Accelerated Sales Tax (AST) payment has been eliminated for periods beginning after June 30, 2021.

No AST payment is due in June 2022.

More information can be found in Tax Bulletin 22-10 and in the Laws, Rules, and Decisions section of our website.  

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Disposable Plastic Bag Tax effective in Loudoun County July 1, 2022

Loudoun County has adopted the Virginia Disposable Plastic Bag Tax effective July 1, 2022. Loudoun County will join the localities listed below that currently impose a disposable plastic bag tax:

• Alexandria City
• Falls Church City
• Fredericksburg City
• Roanoke City
• Arlington County
• Fairfax County

Legislation enacted by the 2020 General Assembly (House Bill 534 (2020 Acts of Assembly, Chapter 1022) and Senate Bill 11 (2020 Acts of Assembly, Chapter 1023)) authorizes any county or city to adopt by ordinance the Virginia Disposable Plastic Bag Tax on disposable plastic bags provided to customers in grocery stores, convenience stores, and drugstores in the locality.

More information can be found in Tax Bulletin 22-9 and in the Laws, Rules, and Decisions section of our website.  

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Virginia Interest Rates Change for the Third Quarter

Virginia's interest rates will change for the third quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the third quarter of 2022 are 5% for tax underpayments and 5% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the third quarter of 2022 will be 7% for tax underpayments (assessments) and 7% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 22-8 and in the Laws, Rules, and Decisions section of our website.  

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Effective July 1, 2022, a new one percent additional retail sales and use tax will be levied in the City of Danville (the “additional local tax”). The sales and use tax levied in the City
of Danville will total 6.3%, comprised of the 4.3% state tax, the 1% local option tax, and the 1% additional local tax.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Under legislation enacted by the 2022 General Assembly, Virginia established a new elective pass-through entity (“PTE”) tax. This bulletin provides taxpayers with preliminary guidance regarding this new elective tax and Taxable Year 2021 Virginia income tax returns.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Effective March 24, 2022, the temporary Retail Sales and Use Tax exemption for qualifying business purchases of Personal Protective Equipment (PPE) related to COVID-19 will expire.

Purchases that were eligible for the exemption and were purchased on or before March 23, 2022 continue to be exempt. However, any purchases made after March 23, 2022 are not eligible for the PPE exemption.

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Effective March 22, 2022, House Bill 1239 (Chapter 30, 2022 Acts of Assembly) creates a new class of tangible personal property for local personal property tax purposes. This new class includes the following types of vehicles:

• Automobiles as described in Va. Code 58.1-3503(A)(3);
• Passenger trucks as described in Va. Code 58.1-3503(A)(4)-(5);
• Motor vehicles with specially designed equipment for use by the handicapped as
  described in Va. Code 58.1-3503(A)(9); and
• Motorcycles, mopeds, all-terrain vehicles, and off-road motorcycles, campers, and other recreational vehicles as described in Va. Code 58.1-3503(A)(10).

Localities now have the option to assign a tax rate to this class that's different from the rate applicable to the general class of tangible personal property. This legislation is applicable to taxable years beginning on or after January 1, 2022, but before January 1, 2025. 

View the Tax Bulletin

If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.