Virginia Interest Rates Change for the Second Quarter

Virginia's interest rates will change for the second quarter of 2022. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the second quarter of 2022 are 4% for tax underpayments and 4% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the second quarter of 2022 will be 6% for tax underpayments (assessments) and 6% for tax overpayments (refunds).

Details about these interest rates can be found in Tax Bulletin 22-3 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.

The City of Falls Church has adopted the Virginia Disposable Plastic Bag Tax effective April 1, 2022.

Falls Church joins the following localities that currently impose a disposable plastic bag tax:

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

View the Tax Bulletin

For more information on the disposable plastic bag tax, see our website. If you have additional questions, contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.

Important Information Regarding 2021 Virginia Income Tax Returns: Virginia's Conformity to the Internal Revenue Code Advanced to Dec. 31, 2021

Under legislation enacted by the 2022 General Assembly, Virginia’s date of conformity to the Internal Revenue Code will advance from December 31, 2020 to December 31, 2021. This allows Virginia to generally conform to the American Rescue Plan Act of 2021 (ARPA) and provides additional benefits to recipients of certain COVID-19 business assistance programs during Tax Years 2021 and 2019. No changes have been made to the Virginia income tax treatment for recipients of COVID-19 business assistance for Tax Year 2020.

Tax Bulletin 22-1 provides more information and explains the conformity adjustments that may be necessary as a result of this legislation.

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.

Important 1099-G Update For Taxpayers in the Virginia Beach Area

We are addressing a reported issue affecting printed 1099-Gs for a number of taxpayers in the Virginia Beach area. We take protection of taxpayer information very seriously, and have thoroughly investigated this matter with the vendor and identified the specific taxpayers affected. Fortunately, any personal account information on the Form 1099-G is redacted, so the information of those taxpayers affected remains safe and secured.

We are contacting each affected taxpayer to explain the situation and confirm they will receive a corrected 1099-G.

In addition, taxpayers can always access correct Form 1099-G information online using our 1099-G Lookup Tool. 

We deeply regret this error and apologize for any inconvenience. For more information, please see the Virginia Tax website. 

Questions? 

As always, you can contact our call center at 804.367.8031 with any questions. Agents are available Monday – Friday 8:30am-5pm.

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.