Virginia Tax Form 760 - Individual Tax Filing Form Instructions

WHAT’S NEW

Biodiesel Fuels Tax Credit: House Bill 139 passed by the 2008 General Assembly created an individual and corporate income tax credit for producers of biodiesel fuels during the first three years of production. The credit is equal to $0.01 per gallon of biodiesel fuels produced; but the total credit for each taxpayer cannot exceed $5,000 annually and the credit cannot exceed the tax liability of the taxpayer. Any unused amounts may be carried forward for the next three taxable years; and taxpayers are also allowed to transfer unused but otherwise allowable credits for use by other taxpayers on Virginia income tax returns.

Livable Home Credit: 2007 House Bill 2498 and Senate Bill 791 expand the individual income tax credit for retrofitting residences with accessibility features. The bills also renamed the credit the “Livable Home Tax Credit.” The expanded credit is applicable to those purchases that are designed to improve accessibility or visitability and meet eligibility guidelines established by the Department of Housing and Community Development. The credit may be for newly constructed residences in addition to retrofitting existing residences. The amount of credits granted for any taxable year may not exceed $1 million with each taxpayer limited to a $500 credit for a taxable year. The Disabled Accessibility Features Tax Credit was previously offered to Virginians who retrofit an existing residence with certain accessibility features but was not available to Virginians who purchased a new residence with such features.

Advancement of Virginia’s Fixed Date Conformity with the Internal Revenue Service: At the time these instructions went to print, Virginia’s fixed date of conformity with the Internal Revenue Code was December 31, 2007. If you anticipate being required to make adjustments to your Virginia return as a result of changes made by the United States Congress to the Internal Revenue Code for the 2008 taxable year, you may wish to delay the filing of your Virginia tax return until action has been taken by the General Assembly to adjust the date of conformity.

Filing Threshold and Personal Exemption Amounts for Individual Income: 2007 House Bill 3022 and Senate Bill 778 increase the individual income tax filing thresholds for single individuals from $7,000 to $11,250 for 2008 and 2009, $11,650 for 2010 and 2011 and $11,950 for 2012 and beyond. The bills increase the filing threshold for married couples from $14,000 to $22,500 for 2008 and 2009, $23,300 for 2010 and 2011, and $23,900 for 2012 and beyond. The bills also increase the personal exemption amount from $900 to $930 effective for taxable year 2008.

Withholding for Household Employees: Effective for taxable years beginning on or after January 1, 2009, employers of household service employees may elect to file and pay the Virginia income tax withheld from their employees’ salaries on an annual basis at the same time they submit the employees’ Forms W-2 for the year. In order to qualify for the annual filing, an employer must have a total payroll in each calendar quarter that does not exceed $5,000, regardless of the number of persons providing the domestic service. The employment must consist exclusively of domestic service in the private home of the employer as defined in the Federal Employment Tax Regulations. The first annual return and payment under the new filing status will be due on February 28, 2010. Visit our website at www.tax.virginia.gov for additional information.

RREMINDER

Extension for Filing Income Tax Returns: Taxpayers are granted an automatic six-month extension for filing an income tax return. No application for extension is required; however, any tentative tax due must be paid with a special extension voucher, Form 760IP, by the original due date for filing the return. The penalty for underpayment of tentative tax is 2% per month.

Filing Options, Forms and Assistance

Where’s My Refund? Visit our website or call (804) 367-2486. With a touch-tone phone, you can accessrecorded tax information on a variety of topics 24 hours a day, and check the status of your refund.

Commercial Tax Preparation Software: Many commercial tax preparation software companies have web- sites that provide taxpayers with online options for completing and filing returns electronically. In addition, many software companies participate in the IRS’s Free File program by offering free tax preparation of your federal return and electronic filing services to taxpayers meeting certain criteria. To learn more about e-file and Free File programs, go to www.tax.virginia.gov and click on Individual e-File.

Individual iFile: You can prepare and file your Virginia return online at our website: www.tax.virginia.gov/ind. It’s fast, it’s easy and it’s secure. Plus it’s free.

Handprint Forms (Form 760, Schedule ADJ, Schedule OSC and Schedule CR) are designed with green boxes for you to enter information that scanners can read and interpret. This machine reading capability reduces the amount of manual handling of returns and increases processing efficiency. We ask that you carefully print information in the designated green areas on the forms using black ink.

Visit Our Website: www.tax.virginia.gov

  • Check your refund status
  • Use the online tax calculator
  • Publications and
  • File your Virginia Form 760
  • Calculate Spouse Tax Adjustment bulletins
  • File your Virginia extension
  • Calculate Age Deduction
  • Tax Policy Library
  • Make Virginia estimated
  • Download forms and
  • E-mail Customer Services payments instructions
  • Pay taxes online
  • Use expanded tax table
  • Filing information and FAQs

Customer Service Inquiries: Send a secure e-mail. Log on to our iFile Secure Message Center at www. tax.virginia.gov to make confidential inquiries and receive answers to your account questions without ever having to call or write us. While traditional or non-secure e-mail is still available, please do not send account specific information by this method.

Call or visit your local Commissioner of the Revenue, Director of Finance, or Director of Tax Administration for forms, information or return preparation assistance. Check the inside back cover for a list of localities and contact information. Contact the Virginia Department of Taxation at (804) 367-8031 or for TDD equipment (804) 367-8329.

Order forms at www.tax.virginia.gov or call (804) 440-2541. Normal business hours are 8:00 a.m. to 5:00 p.m. Monday through Friday.

You can get a copy of the Virginia Taxpayer Bill of Rights by calling Customer Service or by visiting www.tax.virginia.gov.

Tenemos servicios disponible en Español.

Requests for information may be mailed to:

Virginia Department of Taxation
P. O. Box 1115 Richmond,
Virginia 23218-1115

Do NOT mail your return to this address.

Do You Need to File a Virginia Income Tax Return?

Complete Form 760, Lines 1 through 9, to determine your Virginia adjusted gross income (VAGI). If the amount on Line 9 is less than the amount shown below for your filing status, your Virginia income tax is $0.00 and you are entitled to a refund of any withholding or estimated tax paid. You must file a return to receive a refund. To claim a refund in these cases skip to Line 17 and enter “0” as your tax, then complete Lines 18 through 31. You must file if you are:

Single and your VAGI is $11,250 or more
Married filing jointly and combined VAGI is $22,500 or more
Married filing separately and your VAGI is $11,250 or more

When to File Your Return

Filing online - When filing online using our iFile system, you must complete your 2008 return and receive the online acknowledgement by midnight on the due date in order for the filing to be considered timely.

Filing by mail - When filing by mail, the envelope must be postmarked by the due date. Put the correct postage on your envelope. If your return is sent back to you because of insufficient postage, you are liable for penalties and interest if the postmark on the remailed return is after the due date.

Calendar year filer - If your tax year is January 1, 2008 - December 31, 2008, your individual income tax return must be postmarked no later than May 1, 2009, to avoid late filing penalties and interest.

Fiscal year filer -If your tax year is any consecutive 12 month period other than January - December, your return must be postmarked by the 15th day of the fourth month following the end of your fiscal year. When filing, you should write “Fiscal Year Filer” across the top of Page 1 of Form 760 and attach a statement indicating the beginning and ending months of your 12-month fi scal year.

Outside U.S. -If you are living or traveling outside the United States and Puerto Rico (including serving in the military), the due date of your return is July 1, 2009. Fill in the overseas oval near the bottom of Page 2 of Virginia Form 760.

Weekends and holidays - If the due date falls on a Saturday, Sunday or legal holiday, your return must be postmarked by the next business day.

Extension Provisions: Virginia law provides an automatic six-month filing extension for income tax returns. No application for extension is required. The extension is for filing the return, not for payment of the tax; therefore, you must pay at least 90 percent of your tax by the due date, May 1 for calendar year filers. To make a payment of tentative tax, use Form 760IP.

Members of the Military - Members of the Armed Forces serving in a combat zone receive either the same individual income tax filing and payment extensions as those granted to them by the IRS, plus an additional fi fteen days, or a one-year extension, whichever date is later. All extensions also apply to spouses of military personnel. Service families may wish, however, to file their individual income tax returns before the extended deadlines to receive refunds. Service members who claim this extension should write “Combat Zone” on the top of tax returns, as well as any notice issued by the Virginia Department of Taxation to combat zone personnel regarding tax collection or examination, and on the outside of the return envelopes used to mail the return. More information can be obtained from Tax Bulletin 05-5 on the website at www.policylibrary. tax.virginia.gov/OTP/policy.nsf. Go to the Tax Bulletin section and select VTB 05-5 (PD 05-67) from the list of 2005 tax bulletins.

In addition, every member of the armed services deployed outside of the United States is allowed an extension of his or her due date. The extension will expire 90 days following the completion of deployment. Service members who claim this extension should write “Overseas Noncombat” on the top of their tax returns.

Amended Returns

If you file an amended federal return that changes your taxable income or any amount affecting the Virginia return, you must file an amended Virginia return within one year. In addition, if you file an amended return with any other state that affects your Virginia income tax, you must file an amended Virginia return within one year. The Department of Taxation may issue a refund only if the amended return is fi led within:

  • three years from the due date of the original return, including valid filing extensions;
  • one year from the final determination of the amended federal return or federal change, whichever is later, provided that the allowable refund is not more than the decrease in Virginia tax attributable to the federal change or correction;
  • one year from the final determination of the amended return of any other state or change or correction in the income tax of the taxpayer for any other state, provided that the taxpayer previously claimed a credit for such tax on his Virginia tax return and that the refund does not exceed the amount of the decrease in Virginia tax attributable to such change or correction;
  • two years from the filing of an amended Virginia return resulting in the payment of additional tax, provided that the current amended return raises issues relating solely to the prior amended return and that the refund does not exceed the amount of the tax payment made as a result of the prior amended return; or
  • two years from the payment of an assessment, provided the amended return raises issues relating only to the prior assessment and the refund does not exceed the amount of tax paid on the prior assessment.

Complete a new return using the corrected figures, as if it were the original return. Do not make any adjustments to the amended return to show that you received a refund or paid a balance due as the result of the original return. Use the worksheet for amended returns below to determine if you are due a refund or if any additional tax due should be paid with your amended return.

Fill in the oval on the front of Form 760, indicating that this is an amended return. Also, fill in the oval on the front of the return if the amended return is the result of a net operating loss (NOL) carryback. General instructions for computing the NOL can be obtained from the website at www.policylibrary.tax.virginia.gov/OTP/policy. nsf. Select 23VAC10-110-80 and 23VAC10-110-81 located in Chapter 110, Individual Income Tax, Virginia Tax Administrative Code. Attach a complete copy of your federal amended return, if applicable.

Worksheet for Amended Returns - If you are filing an amended return, use the worksheet below to determine if you will receive an additional refund or if you need to make an additional payment.

1. Amount paid with original return, plus additional tax paid after it was filed __________
2. Add Line 1 from above and Line 24 from Form 760 and enter here __________
3. Overpayment, if any, as shown on original return or as previously adjusted __________
4. Subtract Line 3 from Line 2 __________
5. If Line 4 above is less than Line 17, Form 760, subtract Line 4 above from Line 17, Form 760. This is the Tax You Owe __________
6. Refund. If Line 17, Form 760 is less than Line 4 above, subtract Line 17, Form 760 from Line 4 above. This is the Tax You Overpaid __________

Where to File

To file by mail, use the mailing address listed on the back cover of this book or go to www.tax.virginia.gov and look up the city or county where you live. Returns can be filed directly with the Virginia Department of Taxation. Local phone numbers are also provided. Returns can also be fi led electronically.

Residency Status and Choosing the Right Form to File

  • There are two types of Virginia residents: domiciliary and actual.
  • A domiciliary resident of another state may also be an actual resident of Virginia.
  • Virginia residency may be either full year or part-year.
  • A nonresident of Virginia may be required to file a Virginia return.

To determine which Virginia return you should file, first determine if you were a resident of Virginia at any time during the taxable year.

Step 1: Determine your residency status Domiciliary Resident

You are a domiciliary (legal) resident if your permanent home is Virginia. Your permanent home is where, whenever you are absent, you intend to return. Every person has one and only one domiciliary residence at a time. Most domiciliary residents actually live in Virginia; however actual presence in the state is not required. If you have established legal domicile in Virginia, you are a domiciliary resident until you establish legal domicile in another state.

  • Members of the armed forces who claim Virginia as their home of record are domiciliary residents, even if stationed outside of Virginia.
  • A domiciliary resident who accepts employment outside of Virginia but who does not abandon Virginia as his or her domiciliary residence, even if outside of Virginia for many years, remains a domiciliary resident of Virginia. This includes domiciliary residents who accept employment outside of the United States.

Actual Resident

You are an actual resident if: You maintained an abode in Virginia or were physically present in Virginia for more than 183 total days during the taxable year, even if you are a domiciliary resident of another state or country. If you are an actual resident of Virginia, you may be required to file as a resident in Virginia and in your domiciliary state. In this situation, you should claim a credit on the return filed in the state of your legal domicile for taxes paid to Virginia.

Students: The rules for determining the residency status of a student are the same as for anyone else.

Military Personnel and Members of the U.S. Congress: If you are a member of the armed forces or of the U.S. Congress who is a domiciliary (legal) resident of another state, you are not subject to taxation as an actual resident of Virginia even if you maintained an abode in Virginia for more than 183 days. However, if you have income from Virginia sources other than your active duty or congressional pay, you may be required to file a Form 763, Nonresident income tax return.

Spouses, Dependents and Congressional Staff Members: The exemption for members of the armed forces and the U.S. Congress does not apply to spouses, dependents or congressional staff members. If you are a spouse or dependent of a member of the armed forces or of the U.S. Congress or you are employed by a member of the U. S. Congress, you must determine your own residency status and filing obligations, even if you filed a joint federal return.

Residency Status and Choosing the Right Form to File

Step 2: Determine which income tax return you should file

Virginia Residents

File Form 760, Resident Return, if:

  • You were an actual or domiciliary resident for the entire year; or
  • You were an actual or domiciliary resident for a portion of the year, but all of your income for the entire year was from Virginia sources.

File Form 760PY, Part-Year Resident Return, if:

  • You moved into Virginia during the taxable year and became either an actual or domiciliary resident; or
  • You moved out of Virginia during the taxable year and became a domiciliary resident of another state, provided you did not move back to Virginia within six months. Note to Part-Year Residents: If you had Virginia source income during the taxable year while you were a nonresident, you may also be required to file Form 763, Nonresident return. See Nonresidents, below.

Married Taxpayers: If one spouse is a nonresident, you may not file a joint Virginia return, even if you filed a joint federal return. The resident spouse will file either Form 760 or Form 760PY, while the nonresident spouse will file Form 763, if applicable. However, if one spouse is a full-year resident and the other spouse is a part-year resident, you may file a joint return using Form 760PY. See the 760PY instructions for information.

Nonresidents

File Form 763, Nonresident Return, if:

You had income from Virginia sources, other than interest from personal savings accounts, interest or dividends from an individual stock market investment, or pension payments from a Virginia payor. Income from Virginia sources includes:

  1. Items of income gain, loss and deductions attributable to: a) The ownership of any interest in real or tangible personal property in Virginia; b) A business trade, profession, or occupation carried on in Virginia; and c) Prizes paid by the Virginia Lottery, and gambling winnings from wagers placed or paid at a location in Virginia.
  2. Income from intangible personal property, including annui ties, dividends, interest, royalties and gains from the dis position of intangible personal property employed by an individual in a business, trade, profession or occupation carried on in this state.

If you were a Virginia resident for part of the year and you also received Virginia source income during your period of residence outside Virginia, you must file Form 760PY and Form 763. The Virginia source income reported on Form 763 will be only the Virginia source income you received while a nonresident.

Exceptions for Certain Nonresidents

Kentucky and the District of Columbia: If you are a resident of Kentucky or the District of Columbia who commutes daily to work in Virginia, you are not required to file a Form 763 Nonresident return, provided that 1) you had no actual place of abode in Virginia at any time during the taxable year and 2) your only income from Virginia sources is salaries and wages and 3) your salary and wages are subject to income taxation by Kentucky or the District of Columbia.

Maryland, Pennsylvania and West Virginia: If you are a resident of Maryland, Pennsylvania or West Virginia and you earn salaries and wages in Virginia, you do not have to file a Form 763, Nonresident return, provided that 1) your only income from Virginia sources is salaries and wages and 2) you were present in Virginia for 183 days or less during the taxable year and 3) your salaries and wages are subject to taxation by Maryland, Pennsylvania, or West Virginia.

The exception for certain nonresidents of Kentucky, the District of Columbia, Maryland, Pennsylvania and West Virginia applies only to salaries and wages. For Virginia source income not specifically exempted, you must file the Form 763, Nonresident return.

Instructions for Form 760

Name and Address Enter your name and mailing address in the space provided. If you use Filing Status 3 (married filing separate returns), DO NOT enter your spouse’s name in the spouse name field. Instead enter your spouse’s name in the space below the Filing Status 3 line.

Deceased Taxpayers Use the following instructions to file properly and ensure the refund is addressed to the surviving spouse or personal representative.

Single filers: You must list the filer’s name and Social Security Number and fill in the oval on page 2 for Primary Taxpayer Deceased. Include a copy of the federal Form 1310 and/or the appropriate court appointment papers.

Joint filers: If one filer is deceased, the names and Social Security Numbers of both filers must be listed. Fill in the oval on page 2 to indicate the deceased filer. Use the Primary Taxpayer Deceased oval if the filer in the Your name and Social Security Number fields is deceased. Use the Spouse Deceased oval if the filer in the Spouse name and Social Security Number fields is deceased.

If completing a return for joint filers with both filers deceased, the names and Social Security Numbers of both filers must be listed. Fill in both deceased ovals on page 2. Include a copy of the federal Form 1310 and/or the appropriate court appointment papers.

Address Changes - If your address has changed since last filing, fill in the oval in the street address area.

Ovals - Fill in any ovals that apply to you.

  • Name or filing status has changed since last filing.
  • Virginia return was not filed last year.
  • Return adjusted for fixed date conformity -fill in the oval if the return has an addition, subtraction or an adjustment to itemized deductions due to fixed date conformity.
  • Dependent on another’s return - Be sure to see Page 11.
  • Amended return - Be sure to fill in both ovals if amending due to Net Operating Loss Deduction.
  • Pass-Through-Entity Withholding -Included on Line 18a or Line 18b [Attach folded Schedule(s) VK-1].

Social Security Number Enter your Social Security Number and the first four letters of your last name in the boxes. If using Filing Status 2, you must also enter the Social Security Number and first four letters of the last name of your spouse. For Filing Status 3, enter your spouse’s Social Security Number and record your spouse’s name on the line under the Filing Status 3 oval.

PRIVACY ACT In compliance with the Privacy Act of 1974, disclosure of your Social Security Number is mandatory under the authority of Section 58.1-209 of the Code of Virginia. Your Social Security Number is used both as a means of identifying your income tax return and also of verifying the identity of individuals for income tax refund purposes.

Locality Code: Look up the three-digit code on the inside back cover for the locality in which you lived on January 1, 2009. Enter the corresponding number in the boxes provided on the form. Local school funding is allocated based in part on this information.

Filing Status In most cases, your filing status will be the same as the one you selected on your federal return. Fill in the oval next to the appropriate filing status. Fill in the Head of Household oval if you checked the Head of Household box on your federal return.

If one spouse is a Virginia resident and the other is a nonresident, they may not file a joint Virginia return, even if they filed a joint federal return. The resident spouse files a separate return under Filing Status 3, using Form 760. A nonresident spouse who has Virginia source income to report will file a separate return on Form 763. The spouses must compute their itemized deductions and allocate exemptions for dependents as if they had filed separate federal returns. As a general rule, the spouse claiming an exemption for a dependent must be reporting at least half of the total federal adjusted gross income. In addition, the spouse must be able to support his/her claim of itemized deductions. If the underlying expenses for itemized deductions cannot be accounted separately, each spouse must claim a proportionate share of the deductions based on their respective shares of their joint federal adjusted gross income.

Exemptions Enter the number of exemptions allowed in the appropriate boxes. The first box has been completed for you.

Dependents: Generally, you may claim the same number of dependent exemptions allowed on your federal re turn. If using Filing Status 3, see the Filing Status instructions in the previous section for the rules on claiming dependents. You may never claim less than a whole exemption. The same dependent may not be claimed on separate returns.

Multiply the sum of exemptions claimed in the “You,” “Spouse” and “Dependents” boxes by $930. 65 or Over: To qualify for the additional personal ex emption for age 65 or over, you must have been age 65 or over on or before January 1, 2009.

Blind: To qualify for the additional personal exemption for the blind, you must have been consid ered blind for federal income tax purposes.

Multiply the sum of exemptions claimed for “65 or over” and “Blind” by $800.

Low Income Individuals: You cannot claim the 65 or over or Blind exemptions if you also claimed a Credit for Low Income Individuals on Line 21 of Form 760.

Exemption Amount: Add the dollar amount from Part A to the dollar amount from Part B. Enter this amount on Line 11.

Note for Filing Status 3 Each spouse must determine exemptions as if separate federal returns had been filed, using federal rules for separate reporting. If dependent exemptions can not be accounted for separately, they must be proportionately allocated between each spouse based on each spouse’s income. One spouse may never claim less than a whole personal exemption.

Line Instructions

To improve accuracy of return preparation and speed the processing of your return, all amount entries on your return must be rounded to the nearest dollar. Amounts less than 50 cents should be rounded down while all amounts of 50 cents - 99 cents should be rounded up.

Line 1

Federal Adjusted Gross Income Enter the federal adjusted gross income from your federal return. If married filing separately (Filing Status 3), enter only the amount of income attributable to you. Be sure to use the federal adjusted gross income amount, NOT federal taxable income.

Line 2

Additions If you reported any additions on Virginia Schedule ADJ, enter the total amount from Line 3 of Schedule ADJ.

Line 3

Add Lines 1 and 2 and enter the total.

Line 4

Age Deduction Are you eligible to claim an age deduction? If so, enter your birth date (and your spouse’s birth date, if applicable) in the boxes provided.

For 2008, taxpayers born on or before January 1, 1944, may qualify to claim an age deduction based on birth date, filing status and income. A taxpayer who claims an age deduction may NOT claim either of the following:

Disability Subtraction: If you claim an age deduction, you may not claim a disability subtraction. For married taxpayers, each spouse, if eligible, may claim either an age deduction or a disability subtraction. You should claim the deduction or subtraction that gives you the greatest tax benefit.

Credit for Low Income Individuals or Virginia Earned Income Credit: You may not claim both an age deduction and a credit for low income or Virginia Earned Income Credit. For married taxpayers filing separate returns, if one spouse claimed a credit for low income or Virginia Earned Income Credit, neither spouse can claim an age deduction.

If you, or your spouse if you are married, are not claiming a disability subtraction or a credit for low income and your birth date is on or before January 1, 1944, please read the information below to determine if you qualify for an age deduction and how to determine the amount of the age deduction you may claim for 2008.

Taxpayers Age 65 and Older If you, or your spouse, were born on or before January 1, 1944, you may qualify to claim an age deduction of up to $12,000 each for 2008. The age deduction you may claim will depend upon your birth date, filing status and income.

If your birth date is:

  • On or before January 1, 1939: You may claim an age deduction of $12,000. If you are married, each spouse born on or before January 1, 1939, may claim a $12,000 age deduction. For individuals born after January 1, 1939, the age deduction is based on the criteria below.
  • On or between January 2, 1939, and January 1, 1944: Your age deduction is based on your income. A taxpayer’s income, for purposes of determining an income-based age deduction is the taxpayer’s adjusted federal adjusted gross income or “AFAGI.” A taxpayer’s AFAGI is the taxpayer’s federal adjusted gross income, modified for any fixed date conformity adjustments, and reduced by any taxable Social Security and Tier 1 Railroad Benefits.
    • For Filing Status 1, Single Taxpayer, the maximum allowable age deduction of $12,000 is reduced $1 for every $1 the taxpayer’s AFAGI exceeds $50,000.
    • For All Married Taxpayers, whether filing jointly or separately, the maximum allowable age deduction of $12,000 each is reduced $1 for every $1 the married taxpayers’ joint AFAGI exceeds $75,000.

To compute your income-based age deduction, use the Age 65 and Older Age Deduction worksheet on the next page.

Notice to All Married Taxpayers: A married taxpayer’s income-based age deduction is alwaysdetermined using the married taxpayers’ joint AFAGI. Regardless of whether you are filing jointly or separately, if you are married, your income-based age deduction is determined using both your and your spouse’s income. In addition, if both spouses are claiming an income-based age deduction, regardless of whether filing jointly or separately, the married taxpayers must compute a joint age deduction first, then allocate half of the joint deduction to each spouse.

Note: You can calculate this deduction online using the Age Deduction Calculator at www.tax.virginia.gov

Line 5

Social Security Act and equivalent Tier 1 Railroad Retirement Act Benefits Enter the amount of taxable social security and/or railroad retirement act benefits that you included in your federal adjusted gross income.

Line 6

State Income Tax Refund or Overpayment Credit Enter the amount of any state income tax refund or overpayment credit that you reported as income on your federal return.

Line 7

Subtractions If you reported any other subtractions on Virginia Schedule ADJ, enter the total amount from Line 7 of Schedule ADJ.

Line 8

Add Lines 4, 5, 6 and 7, and enter the total.

Line 9

Virginia Adjusted Gross Income Subtract Line 8 from Line 3 and enter the total. Compare this number with the filing threshold for your filing status, as shown on Page 2 to see if you are required to file Form 760. If your income is below the threshold amount, but you had Virginia income tax withheld or made estimated tax payments, follow the instructions on Page 2 to complete your return and claim your refund.

Line 10

Standard or Itemized Deductions You must claim the same type of deductions (standard or itemized) on your Virginia return as you claimed on your federal return. Your state and local income taxes must be subtracted from your itemized deductions. Property and other taxes included as deductions on your federal return are also allowed on your Virginia return. If one spouse claims itemized deductions the other spouse must also claim itemized deductions. If a joint federal return was filed and you are filing separate returns in Virginia (Filing Status 3) itemized deductions that cannot be accounted for separately must be allocated proportionately between spouses based on each spouse’s share of the income (e.g., federal adjusted gross income).

STANDARD DEDUCTIONS

If you claimed the standard deduction on your federal return, you must also claim the standard deduction onyour Virginia return. Enter on Line 10 the amount listed below that corresponds with your filing status.

Single Filing Status 1 Enter $3,000 on Line 10 Do not complete Lines 10a or 10b when claiming a standard deduction.
Married joint return Filing Status 2 Enter $6,000 on Line 10
Married separate return Filing Status 3 Enter $3,000 on Line 10

Dependent on Another’s Return - If you can be claimed as a dependent on the federal return of anothertaxpayer, your allowable standard deduction is limited to the amount of your earned income. Enter the smaller of the amount of earned income or the standard deduction amount on Line 10.

ITEMIZED DEDUCTIONS

You must claim itemized deductions on your Virginia return if you claimed itemized deductions on your federal return. Before making an entry on Form 760, Lines 10a or 10b, answer the following questions:

Do you have an addition (Schedule ADJ, Line 2a) or subtraction (Schedule ADJ, Line 6a) for Fixed Date Conformity?

OR

YES -> Refer to Page 12 and follow the instructions on the FDC Worksheet and Itemized Deduction Worksheet to complete Form 760, Lines 10a and 10b.

 NO -> Are your itemized deductions on your federal return limited?

OR

YES -> Refer to Page 12 and follow the instructions on theItemized Deduction Worksheet to complete Form 760, Lines 10a and 10b.

 NO -> Enter the total from federal Schedule A on Form 760, Line 10a; and the state and local income tax from federal Schedule A on Form 760, Line 10b.

Line 11

Exemptions Enter the total dollar amount from Exemption Section A plus the total dollar amount from Exemption Section B.

Line 12

Deductions If you reported any deductions on Virginia Schedule ADJ, enter the total amount from Line 9 of Schedule ADJ. You must attach the Schedule ADJ to your return.

Line 13

Add Lines 10, 11 and 12 and enter the total.

Line 14

Virginia Taxable Income Subtract Line 13 from Line 9.

Line 15

Amount of Tax To compute your tax, you can use either the tax table or the tax rate schedule on Page 32 or use the Tax Calculator on our website.

Line 16

Spouse Tax Adjustment (STA) Couples filing jointly under Filing Status 2may reduce their tax by up to $259 with the STA if both have taxable income to report and their joint taxable income on Line 14 is more than $3,000. Using the STA, couples filing joint returns will not pay higher taxes than ifthey had filed separate returns. To complete the Spouse Tax Adjustment Worksheet:

  • Recompute your Federal Adjusted Gross Income (FAGI) as if you and your spouse filed separate federal returns. A worksheet is provided on the next page to help in computing separate FAGI.
  • Use the recomputed FAGI to compute the Virginia Adjusted Gross Income (VAGI) for each spouse.
  • Use the separate VAGI on Line 1 of the Spouse Tax AdjustmentWorksheet.

HOW IT WORKS: Virginia tax rates increase with income: 2% up to $3,000; 3% from $3,001 to $5,000; 5% from $5,001 to $17,000 and 5.75% for income over $17,000. The STA lets both incomes reported on jointly fi led returns benefit from the lower tax rates.

EXAMPLE: The Smiths have combined Virginia taxable income of $42,000. Mr. Smith’s income is $30,000 and Mrs. Smith’s income is $12,000. Without the STA, their Virginia tax is $2,157. With the STA, both incomes benefit from the lower tax rates. Using the STA Calculator at www.tax.virginia.gov, the Smiths compute an STA of $214, reducing their taxes to $1,943. If you cannot access the TAX website, use the following worksheet to calculate your STA. You will need your federal tax return and, if applicable, a completed Virginia Schedule ADJ.

Enter your STA amount on Line 16 of Form 760. You must also enter the VirginiaAdjusted Gross Income (VAGI) for each spouse on Lines 16a and 16b.

Line 17

Net Amount of Tax Subtract Line 16 from Line 15 and enter the difference on Line 17.

Line 18a

Virginia Tax Withheld During Tax Year 2008 Enter the amount of Virginia tax withheld from your W-2, 1099 and VK-1 form(s) in the box labeled “Your Virginia Withholding.”

Line 18b

If filing a joint return, enter the amount of Virginia tax withheld from your spouse’s W-2, 1099 and VK-1 form(s) in the box labeled “Spouse’s Virginia Withholding.”

Line 19

Estimated Payments for Tax Year 2008 Enter the total amount of your 2008 estimated payments. Remember to include any overpayment from your 2007 tax return that you applied to your 2008estimated taxes (calendar year filers due dates are May 1, 2008; June 15, 2008; September 15,2008; and January 15, 2009). If you did not have enough income tax withheld this year, you may need to increase the amount of tax withheld or pay estimated income tax for 2009. Generally, you are required to make payments of estimated income tax if your estimated Virginia tax liability exceeds your Virginia withholding and other tax credits by more than $150. To make estimated payments, file Form 760ES or visit our website at www.tax.virginia.gov/ind.

Line 20

 Extension Payments Enter the amount of tentative tax paid with your Form 760IP or the amount paid if you made an extension payment on our website.

Line 21

Tax Credit for Low Income Individuals or Virginia Earned Income Credit If you claimed a Creditfor Low Income Individuals or Virginia Earned Income Credit on Virginia Schedule ADJ, enter the total amount from Line 17 of Schedule ADJ. Refer to Page 23 of this Instruction booklet for additionalinformation. The amount of the credit claimed may not exceed your tax liability on Line 17 of Form 760. For example, if net tax on Line 17 is $141, and the allowable amount of your eligible credit is$300, then enter $141 on Line 21.

Line 22

Credit for Tax Paid to Another State Enter the amount of credit for tax paid to another state that you claimed on Schedule OSC, Line 41. Refer to Page 26 for additional information. You must attach Schedule OSC and a copy of each state return for which you are claiming credit. The other state’s return must show the computation of tax due.

Line 23

Other Credits If you claimed any credits on Virginia Schedule CR, enter the amount from Line 116 of Virginia Schedule CR. If you are only claiming a Political Contributions Credit, enter the amount of the credit and fi ll in the oval. You do not need to attach Schedule CR. The Political Contributions Credit is available to individuals who make contributions to candidates for state or local political office. The credit is 50 percent of the amount of the contribution, subject to a $25 limit for individuals and a $50 limit formarried taxpayers filing jointly and cannot exceed your tax liability. Note: The Credit for Low Income Individuals, the Credit for Taxes Paid to Another State and most credits from Schedule CR, including the Political Contribution Credit, are nonrefundable. The total of all nonrefundable credits cannot exceed your tax liability as shown on Line 17 of Form 760.

Line 24

Total Payments and Credits Add the amounts on Lines 18 through 23.

Line 25

If Line 24 is smaller than Line 17, subtract Line 24 from Line 17. This is the amount of tax you owe.

Line 26

If Line 17 is smaller than Line 24, subtract Line 17 from Line 24. This is the amount of tax you have overpaid.

Line 27

If you would like some or all of your overpayment from Line 26 credited to your estimated taxes fornext year, enter the amount in the box.

Line 28

Adjustments and Voluntary Contributions If you reported any adjustments or voluntarycontributions on Virginia Schedule ADJ, enter the total amount from Line 24 of Schedule ADJ.

Line 29

Add Line 27 and Line 28.

Line 30

If you owe tax on Line 25, and you reported any adjustments or voluntary contributions on Virginia Schedule ADJ, add Lines 25 and 29 and enter the total.

-OR-

If you overpaid your taxes on Line 26, but you credited all or part of the overpayment to next year’sestimated tax, and/or had adjustments or voluntary contributions that exceeded your overpayment, and Line 29 is greater than Line 26, subtract Line 26 from Line 29 and enter the difference.

PAYMENT OPTIONS

Notice: Virginia law requires the Department of Taxation to check for any outstanding debt with Virginia agencies, courts, localities, and the IRS. If any debt is found, all or part of your refund may be withheld to help satisfy the debt.

Web Payments: Use our website, www.tax.virginia.gov/ind, to make a paymentonline. Payments are electronically transferred from your savings or checking account. There is no fee charged by the Department.

Check: If you file your return locally, make your check payable to the Treasurer or Director of Finance of the city or county in which you reside; otherwise, make yourcheck payable to the Department of Taxation. See the inside back cover for a listing of localities. Make sure your Social Security Number is on your check and make anotation that it is your 2008 Virginia income tax payment.

If you file but do not pay with the return, you will be billed if your payment is notsubmitted by May 1st. To submit a payment separately from the return, but on or before May 1st, go to our web site and download the Form 760PMT.

Important: Never submit Form 760PMT with a copy of your return.

Credit Card: Call 1-800-2PAY-TAX, or to pay over the internet, visit www.officialpayments.com. The jurisdiction code for Virginia is 1080. You will need this number when you arrange for a credit card payment.

If you have already filed your return with your Commissioner of the Revenue and did not fill in the credit card oval, call your local Commissioner of the Revenue’s office for the correct jurisdiction code prior to initiating your credit card payment. Phonenumbers are listed on the inside back cover.

The company processing the transaction will assess an additional fee. Prior to payment, you will be informed of the fee and will have the option to cancel the transaction atthat time with no charge. After you complete the transaction be sure to fill in the oval on Line 30 indicating that you have arranged for a credit card payment

Line 31

If Line 26 is greater than Line 29, enter the difference in the box. This is your refund.

Direct Deposit -Get your refund faster! Have your refund deposited directlyinto your bank account. Fill in the oval to indicate whether the account numberis for a checking or savings account.

Bank Routing Number: Enter your bank’s nine-digit routing transit number printed on the bottom of your check. The first two digits of the routing numbermust be 01 through 12 or 21 through 32. Do not use a deposit slip to verifythe number. It may contain internal routing numbers that are not part of the actual routing number.

Bank Account number: Enter your bank account number up to 17 digits. Do not enter hyphens, spaces or special symbols. Enter the number from left to right and leave any unused boxes blank. Do not include the check number.

If you prefer to have your check mailed to you, simply leave the direct deposit information blank.

Fill in all ovals that apply

  • Qualifying farmer, fisherman or merchant seaman.
  • Federal Schedule C filed with your federal return.
  • Coalfield credit earned.
  • Overseas on due date. If you were overseas on May 1, 2009, fill in this oval and attach a statement explaining your situation. Your return is due by July 1, 2009.
  • Earned Income Credit claimed on your federal return. If you claimed an Earned Income Credit on yourfederal return, fill in the oval and enter the amount of the federal credit claimed.
  • Primary Taxpayer Deceased if filer in the Your name and Social Security Number fields is deceased.
  • Spouse Deceased if filer in the Spouse name and Social Security Number fields is deceased.

Signature(s)- Be sure to sign and date your return. If filing jointly, both spouses must sign the return. In so doing, you agree that filing jointly on this return makes you jointly and severally liable for the tax due and any refunds will be paid jointly. Include your daytime and evening phone numbers in the spaces provided.

  • I authorize the Dept. of Taxation to discuss my return with my preparer. Fill in the oval to authorize the Department of Taxation to discuss your return information with your tax preparer. This will allow the Department of Taxation to respond directly to inquiries from your preparer without contacting you separately for authorization.

Tax Preparer Information- Tax preparers who prepared 100 or more individual income tax returns for a taxable year are required to file all individual income tax returns using electronic means. Previously, large income tax preparers had the option of filing returns electronically or using 2D barcoded paper returns.

An “income tax return preparer” means a person who prepares, or employs one or more individuals to prepare, an income tax return for compensation. An income tax return preparer does not include volunteers who prepare tax returns for the elderly or poor as part of a nonprofit organization’s program.

Tax preparers may request a hardship waiver to these filing requirements by completing and submitting Form 8454P. In addition, taxpayers who use a tax preparer subject to these filing requirements may opt out of filing by electronic medium by completing Form 8454T. For additional information, visit our website at www.tax. virginia.gov.

For returns completed by a paid tax preparer, the tax preparer is required to complete the fields located at the bottom of Page 2, Form 760.

 

Virginia Tax Help Links