It's time to file!

Monday, Jan. 31, 2022 is the due date for businesses to submit their 2021 withholding records, including W-2 and 1099 forms.

There are 2 free, online filing options:

• Web Upload: a file-based system that accepts multiple file types, including those created by most payroll software; and
• eForms: fillable electronic forms with no signup required (best if you have a small number of employees).

Important: Late submissions can cause significantly delayed refunds for your employees, retirees, and customers.

Changes this year

• Do you issue 1099s? The IRS has added 2 new payment fields (fields 17 and 18) to the 1099 form. As a result, the position of several existing fields will change on Forms 1099R, 1099 MISC, 1099 NEC, and 1099K. We're following the IRS format, so make sure to send us your files using the updated federal specifications (which you can find in our W2/1099 Guide for Web Upload).
• Do you need to correct a W-2? Starting this year, we’ll accept corrected W-2s (or “W-2Cs”) for Tax Year 2021 and beyond electronically. Use Form W-2C to update or change wage or withholding data. For Tax Year 2020 and prior years, payroll providers and employers will need to submit written copies of updated W-2s.

Questions? 

For more information on filing options and requirements, see the Withholding Tax page on our website. If you have additional questions, contact Virginia Tax Business Customer Service at 804.367.8037.

Important 1099 Forms Update

IRS change impacts formatting of Forms 1099R, 1099 MISC, 1099 NEC, and 1099K 

The IRS has added 2 new payment fields (fields 17 and 18) to the 1099 form. As a result, the position of several existing fields will change on the following forms: 

• 1099R
• 1099 MISC
• 1099 NEC
• 1099K

We're following the IRS format, so please make sure to send us your files using the updated federal specifications (which you can find in our W2/1099 Guide for Web Upload). This change is retroactive, so if you are sending prior-year 1099s, you must use the new federal format.

Questions? 

For more information on filing options and requirements, see the Withholding Tax page on our website. If you have additional questions, contact us at 804.367.8037.

Virginia Interest Rates Stay the Same

Virginia's interest rates will stay the same for the first quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the first quarter of 2022 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the first quarter of 2022 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 21-10 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 January 1, 2022

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.

The tax will be administered by Virginia Tax, which issued Guidelines for the Disposable Plastic Bag Tax on September 1, 2021. As explained in the guidelines, Virginia Tax will be responsible for administering the tax, including auditing and collecting the tax.

The following localities have adopted the Virginia Disposable Plastic Bag Tax effective January 1, 2022:

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

More information can be found in Tax Bulletin 21-9 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.

Guidelines for the Classification of Workers: Independent Contractor vs. Employee During the 2020 Session, the Virginia General Assembly enacted House Bill 1407 (2020 Acts of Assembly, Chapter 681) and Senate Bill 744 (2020 Acts of Assembly, Chapter 682), which sets forth the Virginia standard for classifying workers performing services for remuneration as employees or independent contractors. In addition, this legislation imposes civil penalties on employers that fail to properly classify an individual as an employee. The Guidelines are available in the Guidance Documents section of the Virginia Tax website. For additional information or questions, email us at misclassificationofworkers@tax.virginia.gov. View the Tax Guidelines

Virginia Interest Rates Stay the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the fourth quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the fourth quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the fourth quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 21-8 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.

Guidelines for the Virginia Disposable Plastic Bag Tax

Legislation enacted during the Regular Session of 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. The tax will be administered by Virginia Tax. A locality must provide a certified copy of the ordinance to the Tax Commissioner at least 3 months prior to the date the tax is to become effective.

Any county or city may impose the Virginia Disposable Plastic Bag Tax in the amount of 5 cents on each disposable plastic bag provided to purchasers by any grocery store, convenience store, or drugstore in the locality. The tax is due regardless of whether the retailer sells the bag to the customer or it is provided free of charge.

The Guidelines are available in the Guidance Documents section of the Virginia Tax website. For additional information or questions, contact the Virginia Tax Business Customer Service line at 804.367.8037.

View the Tax Guidelines 

Guidelines for the Application of the Retail Sales and Use Tax to Sales of Accommodations Facilitated by Accommodations Intermediaries Effective September 1, 2021, Senate Bill 1398 (2021 Acts of Assembly, Special Session I, Chapter 383) changes the application of the Retail Sales and Use Tax to sales of accommodations facilitated by accommodations intermediaries. The legislation makes similar changes to the local transient occupancy tax. Additionally, these changes will apply to the state imposed transient occupancy taxes that fund transportation purposes in certain localities under Va. Code § 58.1-1743 and Va. Code § 58.1-1744 because these taxes are administered by local governments in the same manner as their local transient occupancy taxes. Virginia Tax has issued guidelines to provide processes and procedures for implementing the provisions of Va. Code §§ 58.1-602, 58.1-603, and 58.1-612.2, relating to the Retail Sales and Use Taxation of accommodations, as required by Senate Bill 1398.  The Guidelines are available in the Guidance Documents section of the Virginia Tax website. For additional information or questions, contact the Virginia Tax Business Customer Service hotline at 804.367.8037. View the Tax Guidelines

2021 Legislative Summary Published

The 2021 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 2021 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.

Virginia Interest Rates Stay the Same

Virginia Tax announces that Virginia's interest rates will stay the same for the third quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the third quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the third quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 21-7 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.