Virginia Form 763 Instructions

WHAT'S NEW

Virginia's Fixed Date Conformity with the Internal Revenue Code: Virginia's date of conformity with the federal enhanced Earned Income Tax Credit ("EITC") was extended to taxable years ending before January 1, 2018. Virginia will continue to allow taxpayers to claim either the Tax Credit for Low- Income Individuals or a credit equal to 20% of the federal EITC that was claimed for the taxable year. Low-Income taxpayers may also continue to claim the portion of the Virginia Low-Income Tax Credit that is based on the federal EITC without making complex adjustments on their Virginia income tax returns.

During the 2014 Session, the General Assembly did not advance Virginia's date of conformity with the Internal Revenue Code, and the date of conformity remains January 2, 2013. Virginia will continue to disallow federal income tax deductions for bonus depreciation allowed for certain assets under Internal Revenue Code ("IRC") §§ 168(k), 168(l), 168(m), 1400L and 1400N; the five-year carryback of federal net operating loss deductions generated in Taxable Year 2008 or 2009; and federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F).

At the time these 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 IRC for the 2014 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.

Virginia Income Tax Treatment of Same-Sex Marriage: Same-sex couples that are married under the law of any state are now recognized as married couples for Virginia income tax purposes. Virginia income tax guidance for same-sex married couples is available on the Department's website at www.tax.virginia.gov. See Virginia Tax Bulletin 14-7 (Public Document 14-174, 10/7/14).

First-Time Home Buyer Savings Accounts: Individuals may designate an account with a financial institution as a first-time home buyer savings account. Distributions from such accounts must be used solely for paying or reimbursing the down payment and allowable closing costs for the purchase of a single-family residence in Virginia. An individual may subtract any income attributable to such account that was taxed as interest, capital gains, or other income for federal income tax purposes, to the extent it was included in such individual's federal adjusted gross income. However, if funds are withdrawn from the account for purposes other than to pay eligible costs, any subtractions previously taken would be subject to recapture.

Education Improvement Scholarships Tax Credits: For taxable years beginning on or after January 1, 2014, an income tax credit may be claimed for monetary or marketable securities donations made to scholarship foundations included on an approved list published by the Virginia Department of Education. The credit is equal to 65 percent of the monetary or marketable securities donation made to the scholarship foundation. Tax credits will be awarded to taxpayers on a first-come, first-served basis in accordance with procedures established by the Virginia Department of Education. For information on how to qualify, contact the Department of Education at 804-225-3375.

Virginia College Savings PlanSM (Virginia529SM) Contributions: Beginning with the 2014 taxable year, individuals may contribute all or part of their income tax refunds to one or more Virginia529 accounts by completing Schedule VAC. Virginia529 is a 529 college savings plan that offers flexible, affordable, tax-advantaged savings for qualified higher education expenses through its four programs: Virginia529 prePAIDSM, Virginia529 inVESTSM, CollegeAmerica®, and CollegeWealth®. Nearly $53 billion in assets under management and 2.3 million accounts as of June 30, 2014 make Virginia529 the largest 529 plan in the country. For information on establishing accounts, visit Virginia529.com. See the instructions for Schedule VAC on Page 23 of this book for details on this contribution program.

GENERAL INFORMATION

WHERE TO GET FORMS AND ASSISTANCE

Where to Get Forms

Download returns and schedules from the Department's website www.tax.virginia.gov.
Order forms online through the Department's website or call (804) 440-2541.

Assistance

Call Customer Services at (804) 367-8031. TTY users dial 7-1-1 between 8:30 a.m. and 5:00 p.m.
Mail requests for information to Virginia Department of Taxation, P.O. Box 1115, Richmond, VA 23218-1115 (Do not mail your return to this address).
Contact the Department for assistance at www.tax.virginia.gov
Call or visit your Commissioner of the Revenue, Director of Finance or Director of Tax Administration. Check the list on the back cover for contact information.

ESTIMATED INCOME TAX FILING

If you did not have enough income tax withheld, you may need to pay estimated income tax. 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 tax payments, visit the Department's website: www.tax.virginia.gov or File Form 760ES.

If you owe a large amount of tax, you may need to increase the amount of tax withheld or make estimated tax payments during the year.

You may be penalized if you underpaid your estimated tax or did not have enough tax withheld.

CIVIL AND CRIMINAL PENALTIES

The civil penalty for filing a false or fraudulent return or for failing or refusing to file any return with intent to evade the tax, is an additional penalty of 100% of the correct tax.

Any individual who willfully fails or refuses to file a return, at the time or times required by law, shall be guilty of a Class 1 misdemeanor. In addition, an individual who makes any false statements on a return, with intent to defraud the Commonwealth, shall be guilty of a Class 6 felony.

AMENDED RETURN FILING

When to File

If you file an amended federal return reflecting a change in your taxable income or any other amount that would affect the Virginia return, you must file an amended Virginia tax return within 1 year. If the Internal Revenue Service (IRS) provided documentation that acknowledges acceptance of your federal amended return, attach a copy to the Virginia amended return. In addition, if you file an amended return with any other state that results in a change that would affect your Virginia income tax, you must file an amended Virginia tax return within 1 year.

If the change reduces the tax, by law the Department may issue a refund only if the amended return is filed within:

3 years from the due date of the original return, including valid filing extensions;
1 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;
1 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 refund does not exceed the amount of the decrease in Virginia tax attributable to such change or correction;
2 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
2 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.

Form 763

To amend Form 763, complete a new Form 763 (for the taxable year you are amending) using the corrected figures, as if it were the original return. Check the amended box located in the check applicable boxes section. Do not make any adjustments to the amended return to show that you received a refund or paid a balance due as a result of the original return.

Required Attachments

If you filed an amended federal return, attach a copy of your federal Form 1040X or other claim form and supporting material to your amended Virginia return to substantiate the amendment. In addition, a copy of the final determination made by the IRS should be included to verify acceptance of the amended federal return. If amending your Virginia return for other reasons, attach a statement to explain why you are amending your return. Show any computations necessary to verify the adjustments you are making. Submit your check or money order with your return if you owe a balance due. Also, include additional Forms W-2, 1099 or VK-1 with your return if claiming more income tax withheld than what was claimed on your original return.

Federal Adjustments

If your federal income tax return was adjusted by the IRS during the taxable year, an amended Virginia return must be filed with a copy of the federal adjustments attached within one year after the final determination of such federal change, correction or renegotiation. See "When to File" earlier in this section for additional information.

Net Operating Losses

Although there is no express statutory provision for a separate Virginia net operating loss available for carryback or carryover, the amount of federal net operating loss is the starting point in computing the amount of deduction to be allowed on the Virginia return. Check the amended return box located on the front of Form 763, indicating that this is an amended return. Also, check the box indicating the return is the result of a net operating loss (NOL) carryback. Be sure to attach a complete copy of your federal amended return, if applicable. General instructions for computing the NOL can be obtained from the Laws, Rules & Decisions section on the Department's website at www.tax.virginia.gov. Select the link for Virginia Tax Administrative Code (Regulations) and find 23VAC10-110-80 and 23VAC10-110-81, located under Chapter 110, Individual Income Tax.

DECEASED TAXPAYERS

Surviving Spouse filing Joint Return: As the surviving spouse, you are considered the primary taxpayer. To complete your return:

List your name, Social Security Number and Date of Birth first on the return
Include your spouse's name, Social Security Number and Date of Birth in the fields labeled for "Spouse"
Fill-in the Deceased oval next to the field for your spouse's Date of Birth
Any refund issued will be made payable to the surviving spouse. The refund may be direct deposited
No additional documentation or forms are required

Single Filers: If you are the court-appointed or certified Personal Representative (also referred to as Executor or Administrator) of the decedent's estate, include a copy of the court certificate showing your appointment with the return.

Any refund issued will be made payable to the estate of the decedent
The check may be cashed or deposited with the endorsement of the court-appointed Personal Representative

Joint Filers, both Taxpayers Deceased: Follow the instructions for Single Filers.

Important: If a refund is due, the refund will be issued in the name of the surviving spouse or the estate of the decedent(s) unless a properly completed copy of federal Form 1310 is provided. When filing electronically, the Form 1310 must be included with the federal filing.

RECORD KEEPING

Keep your tax records for at least 3 years from the due date of the return or the date the return was filed, whichever is later. If the IRS requires you to keep your federal records for a longer period of time, keep your state records for the same period of time.

FILING REQUIREMENTS

Filing Threshold

Filing requirements are based on your residency status and the amount of your income. Dependents and students are subject to the same filing requirements as anyone else.

Nonresidents of Virginia with income at or above the filing threshold must file if any of their income is from Virginia sources.
Residents of Virginia with income at or above the minimum filing threshold must file.

For information on Virginia residency requirements, please read the next section, "Residency Status."

If your Virginia Adjusted Gross Income (VAGI) is at or above the threshold amount shown in the following table, you are required to file. VAGI is the Adjusted Gross Income on your federal return plus any Virginia additions from Line 2, minus any Virginia subtractions from Line 8. Information on Virginia additions and subtractions is included in the instructions later in this booklet.

If your income is only from wages, salaries and interest from a savings or checking account, your VAGI is usually the same as the Federal Adjusted Gross Income shown on your federal return. Once you have computed your VAGI, check the chart below to see if you need to file a Virginia income tax return.

YOU DO NOT HAVE TO FILE IF YOU ARE:

Single and your VAGI is less than...	$11,950
Married filing a joint return (both must have Virginia Source Income) and your combined VAGI is less than...	$23,900
Married, spouse has no income from any source and your VAGI is less than...	$11,950
Married filing separately (on separate forms) and your VAGI is less than.	$11,950

If you are not required to file, but you had Virginia income tax withheld or you made estimated payments, you are entitled to a refund of the amount withheld, or paid. You must file a return to get a refund.

We periodically review and update the Department's records to make sure that we have correct return information. Sometimes, we have to contact taxpayers to confirm that they did not need to file for a given year. As a result, even if you do not need to file a return for 2014, you may receive an inquiry at a later date to verify your VAGI.

RESIDENCY STATUS

Residents

Every Virginia resident whose Virginia Adjusted Gross Income is at or above the minimum filing threshold must file. Any "federal area" such as a military or naval reservation, federal agency or federal administration that is inside the geographical boundaries of Virginia is considered a location in Virginia and non active duty residents of those areas are subject to Virginia income tax just like residents of any other location in the state.

You may be required to file as a resident in two states if you are an actual resident of one state and a domiciliary resident of another state (see definitions below). If you are in this situation, you may be able to take a credit on the return filed in the state of your legal domicile. Refer to the instructions for Schedule OSC on Page 29 of these instructions for more information on the credit for tax paid to another state.

Domiciliary Residents

Anyone who maintains a legal domicile (residence) in Virginia, whether living in or out of Virginia, is a domiciliary resident. This includes members of the U.S. armed forces who have Virginia as their home of record. Domiciliary residents have their permanent place of residence in Virginia. Any person who has not abandoned his or her legal domicile in Virginia and established legal domicile in another state remains a domiciliary resident of Virginia, even if residing in another jurisdiction for a number of years. In determining domicile, the Department considers many factors. Some of the more common indicators of domicile are: voter registration; motor vehicle and personal property registration; business pursuits; expressed intent; conduct; leaseholds and situs of real property owned.

Actual Residents

Anyone, other than a member of the U.S. armed forces or the U.S. Congress, who maintains a place of abode (i.e., home) in Virginia for a total of more than 183 days of the taxable year while having legal domicile (residence) in another state or country is an actual resident of Virginia. This category often includes students who are domiciliary residents of another state while attending college in Virginia or the spouses* and dependents of members of the U.S. armed forces stationed in Virginia. Although this residency classification does not apply to members of the U.S. Congress, it does apply to members of their families and staffs.

*The spouse of a military service member may be exempt from Virginia individual income tax on income from services performed in Virginia if (i) the service member is present in Virginia in compliance with military orders; (ii) the spouse is in Virginia solely to be with the service member; and (iii) they both maintain domicile in another state that is the same for both spouses. For more information, see Tax Bulletin 09-10 and Tax Bulletin 10-1 which are available on the Department's website at www.tax.virginia.gov.

Nonresidents

Nonresidents of Virginia with Virginia Adjusted Gross Income at or above the filing threshold must file if any of their income is from Virginia sources. Income from Virginia sources is income received from labor performed, business done, or property located in Virginia, including gains from sales, exchanges or other dispositions of real estate and intangible personal property having a situs in Virginia. Virginia source income includes income passed through from a partnership, S corporation or limited liability company that does business in Virginia. It also includes business income and proceeds from real estate transactions passed through by a Virginia trust. It generally does not include personal savings account interest or dividends from an individual's stock market investments.

Those who maintain legal domicile in another state and live in Virginia less than 183 days of the taxable year (or do not live in Virginia at all) are nonresidents. Also, members of the U.S. armed forces who have another state as their home of record (legal domicile) are generally classified as nonresidents of Virginia, even though they may be stationed in Virginia for years.

Exceptions for Certain Nonresidents

If you are a nonresident of Virginia who commutes daily to work in Virginia from Kentucky or the District of Columbia, you do not have to file if:

You have no actual place of abode in Virginia at any time during the year;
Salaries and wages are your only Virginia source income; and
Your salaries and wages are subject to income taxation by Kentucky or the District of Columbia.

If you are a nonresident of Virginia who is a resident of Maryland, Pennsylvania or West Virginia and you earn salaries and wages in Virginia, you are exempt from filing a Virginia income tax return and paying Virginia income tax if:

Your only income from sources in Virginia is from salaries and wages; and
Your salaries and wages are subject to income taxation by Maryland, Pennsylvania or West Virginia.

If you are a domiciliary resident of Kentucky, Maryland, Pennsylvania, West Virginia or the District of Columbia and have income from Virginia sources other than wages and salaries, (such as business income or gain from the sale of a residence), you must file a Virginia Nonresident Individual Income Tax Return, Form 763, and pay tax on income not specifically exempted above.

Spouses of Military Personnel: Under the Servicemember Civil Relief Act, as amended by the Military Spouses Residency Relief Act, a spouse of a military servicemember may be exempt from Virginia income tax on wages if (i) the servicemember is present in Virginia in compliance with military orders; (ii) the spouse is present in Virginia solely to be with the servicemember; and (iii) they both maintain the same non-Virginia domicile state. More information is available in Tax Bulletin 09-10 and Tax Bulletin 10-1 available on the website at www.tax.virginia.gov.

Tax Withheld in Error by Employer: If Virginia tax was withheld from your income in error you should file Form 763S to obtain a refund.

If you meet any of the exceptions above and had Virginia withholding, you may need to file Form 763S, Virginia Special Nonresident Claim For Individual Income Tax Withheld to claim your refund.

Part-Year Residents

You may be a part-year resident if your residency in Virginia began or ended during the taxable year. Residents who move into or out of Virginia during the taxable year and do not fall into either category below are generally considered full-year residents.

Virginia residents who move out of Virginia during the taxable year and become domiciliary residents of another state are part- year residents, provided they do not move back to Virginia for at least six months.
Those who move into Virginia during the taxable year and become either domiciliary or actual residents of Virginia are also considered part-year residents.

The distinction between full-year and part-year residents is important in deciding which form to file and what income is taxable in Virginia. To compute Virginia Adjusted Gross Income (VAGI) and determine if VAGI meets the minimum filing threshold, part- year residents who file Form 760PY are allowed a subtraction from federal adjusted gross income equal to the amount of income attributable to residence outside Virginia.

If you are a part-year resident and you do not file the correct form, you will not compute the correct amount of tax. See the next section, "WHICH FORM TO FILE".

WHICH FORM TO FILE

Residents File Form 760

File Form 760 if you are a part-year resident and all of your income came from Virginia sources or was received while you were a Virginia resident. This will allow you to claim the full exemption and standard or itemized deduction instead of computing partial amounts as required for part-year residents filing Form 760PY.

Part-Year Residents File Form 760PY

As a general rule, part-year residents file Form 760PY. If one spouse is a full-year resident and the other is a part-year resident, the couple may file together on Form 760PY. The part-year resident spouse will compute a prorated exemption amount. The full-year resident spouse will claim the full exemption amount.

If you are a part-year resident who received Virginia source income, as well as other income, during the portion of the year you lived in another state, you need to file two Virginia returns for the taxable year. File Form 760PY to report the income attributable to your period of Virginia residency. File Form 763, the nonresident return, to report the Virginia source income received as a nonresident.

Nonresidents File Form 763

Generally, nonresidents with income from Virginia sources must file a Virginia return if their income is at or above the filing threshold. Nonresidents who earn salaries and wages in Virginia and pay tax on those salaries and wages to the District of Columbia, Kentucky, Maryland, Pennsylvania or West Virginia are not required to file if they meet the criteria described in the previous section under "Exceptions for Certain Nonresidents." Residents of states other than those in "Exceptions for Certain Nonresidents" do not qualify for a filing exception.

Usually, when one spouse is a resident and the other spouse is a nonresident, each spouse whose income is at or above the filing threshold, must file separately. The resident spouse must file on Form 760. The nonresident spouse must file Form 763. There are only three circumstances in which such a couple can file jointly on the same return. If both spouses have income and all of the nonresident's income is Virginia source income, a joint resident return (Form 760 ) may be filed. If both spouses elect to determine their joint Virginia taxable income as if they were both Virginia residents, a joint resident return may be filed. Also, if the nonresident spouse has no income at all, a joint resident return may be filed.

Members of the Armed Forces

Active duty pay for members of the armed forces is taxable only in the state of legal domicile, regardless of where stationed. You must file as a nonresident if you are in the military, domiciled in another state and have any other income that is from Virginia sources.

The spouse of a military service member may be exempt from Virginia individual income tax on income from services performed in Virginia if (i) the service member is present in Virginia in compliance with military orders; (ii) the spouse is in Virginia solely to be with the service member; and (iii) they both maintain the same non-Virginia domicile state. For more information, see Tax Bulletin 09-10 and Tax Bulletin 10-1 available on the Department's website at www.tax.virginia.gov.

Use Form 763 if you are in the military, domiciled in another state and have any other income that is from Virginia sources. Examples follow.

If a married couple lives in Virginia for the entire year, but is domiciled in Alabama, and has nonmilitary income from Virginia sources that is attributable to both spouses, the spouse on active duty must file Form 763, using Filing Status 4. Generally, the state of domicile will allow credit for tax paid to Virginia on the earned income that is taxed in both states.

If the nonmilitary spouse's domicile changed to Virginia during the year, Form 760PY must be filed, using Filing Status 3, to pay tax on income earned after becoming a Virginia resident.

Unified Nonresident Filers File Form 765

Partnerships, S Corporations and limited liability companies may file, on behalf of their nonresident partners, shareholders, or members, a unified return (Form 765) thereby relieving these persons of the responsibility of filing a Virginia nonresident individual return. An owner of a pass-through entity may also need to file a nonresident return (Form 763) to report Virginia source income that was not included on a Form 765. Income reported on a unified return would be subtracted on the Form 763 using Code 50 (Pass-Through Entity Income) on Lines 6b - 6d of the Schedule 763 ADJ.

Other Frequently Used Virginia Forms

Schedule 763 ADJ - Required for:

Additions to Federal Adjusted Gross Income
Subtractions from Federal Adjusted Gross Income
Deductions from Virginia Adjusted Gross Income
Credit for low-income individuals
Addition to tax, penalty and interest

Schedule VAC

Required for contributions to Virginia College Savings Plan Accounts and Other Voluntary Contributions

Schedule CR

Required to claim most tax credits. For some Schedule CR credits, other forms are required.

Form 760C

Required to compute the addition to tax for individuals, estates and trusts

Form 760F

Required to compute the addition to tax for farmers, fishermen and merchant seamen

Form760IP

Used to make an extension payment

Form CU-7

Consumer's Use Tax Return

Form 760ES

Used to make estimated tax payments

Form 763S

Used by nonresidents to claim a refund of Virginia tax withheld if not required to file

Schedule OSC

Required to claim credit for taxes paid to another State

WHEN TO FILE

Calendar Year Filers - May 1, 2015

If your taxable year is January 1, 2014 - December 31, 2014, your individual income tax return must be postmarked no later than May 1, 2015, to avoid late filing penalties and interest.

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 the penalties and interest if the postmark on the remailed return is after the due date. Tax returns or payments of taxes remitted by a commercial delivery service will be considered timely filed if received in an envelope or sealed container bearing a confirmation of shipment on or before midnight of the day the return or payment is due.

If the due date falls on a Saturday, Sunday or legal holiday, you may file your return on the next day that is not a Saturday, Sunday or legal holiday.

Fiscal Year Filers

If your taxable year is not January 1 through December 31, your return must be postmarked by the 15th day of the 4th month following the close of your fiscal year.

When filing by paper, you should write "FISCAL YEAR FILER" across the top of Page 1 of Form 763 and attach a statement indicating the beginning and ending months of your 12-month fiscal year. If you file after the due date or do not pay the full amount due by the due date, you may have to pay penalties and interest.

Overseas Rule

If you are living or traveling outside the United States or Puerto Rico (including persons in the military or naval service on duty outside the United States and Puerto Rico), you must file your return by July 1, 2015. Be sure to check the appropriate box to the left of the name and address section.

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 15 days, or a 1-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 claiming this extension should write"Combat Zone"across the top of their tax returns and on the envelopes used to mail their returns. Such combat zone personnel should similarly write"Combat Zone"across the top of their correspondence, and on the envelope used to mail the correspondence, when responding to any notices is sued by the Department regarding tax collection or examination. More information can be obtained from Tax Bulletin 05-5, available in the Laws,Rules,and Decisions Section of the Department's website at www.taxpolicy.virginia.gov.

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.

Extension Requests

Extension Provisions: Virginia law provides an automatic 6-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% of your tax by the due date, May 1 for calendar year filers. To make a payment of tentative tax, use Form 760IP.

If you file your return within 6 months after the due date but do not meet the 90% payment requirement, an extension penalty of 2% per month will apply to the balance of tax due with your return from the due date through the date your return is filed, to a maximum of 12% of the tax due. Interest will also accrue on any balance of tax due with a return filed within the extension period, regardless of whether the 90% payment requirement is met.

If you file your return within 6 months after the due date but do not pay the tax due at the time of filing, the unpaid balance will be subject to a late payment penalty of 6 percent per month from the date of filing through the date of payment, to a maximum of 30%. The late payment penalty will be assessed in addition to any extension penalty that may apply. The automatic extension provisions apply only to returns that are filed within 6 months from the due date. If you file your return more than 6 months after the due date, a late filing penalty of 30% will apply to the balance of tax due with your return.

Refund Returns - You do not need to file an extension if you cannot file by the due date and you are certain that your return will result in a refund. This is because the late filing penalty is not assessed on refund returns. To receive a refund, however, you must file within 3 years of the due date.

Foreign Income Exclusion - If you qualify for the federal foreign income exclusion and have requested an extension of time for filing your federal return, you may apply for an extension of time to file your state return. You will be granted an extension for 30 days after the date you expect to qualify for the exclusion. You must apply by letter on or before the 1st day of the 7th month following the close of your taxable year and attach a copy of the approved federal extension to your return when you file.

WHERE TO FILE

To file by mail, use the mailing address listed on the back cover of this booklet for the city or county in which all or the principal part of income from Virginia sources was derived. Returns can be filed directly with the Virginia Department of Taxation. Most nonresident returns can also be filed electronically.

BALANCE DUE RETURNS

You can pay by check, credit card or online. Make your check payable to the Treasurer of the city or county in which you reside. Make sure your social security number is on your check and make a notation that it is your 2014 income tax payment.

To pay by credit card, call 1-800-272-9829 (1 800 2 PAY TAX), or visit www.officialpayments.com. The jurisdiction code for Virginia is 1080. If you choose this option, fill in the check box on Line 37 of Form 763, indicating this type of payment. You will be assessed a fee by the company processing the transaction.

Make an online payment from your checking or savings account for balance due returns using Web Payments at www.tax.virginia.gov.

If you have already filed your return with your Local Commissioner of the Revenue and did not indicate you were paying by credit card, call your Local Commissioner of the Revenue's office for the correct jurisdiction code prior to initiating your credit card payment. Phone numbers are listed on the inside back cover of this booklet.

DEBT COLLECTION ACT

Before issuing any refunds, Virginia law requires the Department to check for any outstanding debt with agencies of the Commonwealth of Virginia, Virginia local governments and the Virginia court system. If any such debt is found, regardless of the type of tax return filed, all or part of your refund may be withheld to help satisfy the debt and the processing of your return will be delayed.

AVOID COMMON MISTAKES

Sign your return.
Make sure your name, address and social security number(s) are correct.
Be sure to complete all applicable check boxes.
Verify all entries and check all math.
If you itemized deductions, make sure you complete Line 10 through Line 12 on Form 763.
Be sure to include the front and back of all documents.
Put the correct postage on your envelope. If your return is sent back to you because of insufficient postage, you are liable for the penalties and interest if the postmark on the remailed return is after the due date.
File your original return. Do not file a photocopy.

HOW TO ASSEMBLE YOUR RETURN

If you completed any of the forms or schedules listed below, you must attach them to your Virginia return. Place these forms behind your Virginia return in the following order.

If filing both Form 760PY and Form 763, attach Form 763 behind Form 760PY so that the title of Form 763 can be seen over the top of the title of Form 760PY. Attach a statement over the Form W-2 on Form 760PY stating that "Form 763 is attached behind Form 760PY."
Virginia Forms
- Schedule 760PY ADJ - Schedule OSC
- Schedule CR - Schedule of Income
- Schedule VAC - Form 760C or Form 760F
- Forms 301, 304, 306 or 307
- Any additional documentation as required.
Federal Forms
- Complete copy of your federal income tax return.
If claiming credit for income tax paid to another state on Schedule OSC, attach a complete copy of the state tax return filed with the other state.

Withholding Forms

Be sure to include Forms W-2, W-2G, 1099 and VK-1 that indicate the same amount of Virginia income tax withheld as the amount you claim on your return. Staple these to the center of the left margin on the front of your return. When attaching Form VK-1, fold in half and attach to front of return.

Payments

Submit check with your return. If paying by credit card, please check the box on Line 37 of Form 763.

FORM 763 LINE INSTRUCTIONS

NAME, ADDRESS AND SOCIAL SECURITY NUMBER (SSN)

Name - Enter your complete name (including middle initial) and mailing address in the boxes provided. If filing a joint return, Filing Status 2, enter the complete name of your spouse. If you are married filing separate returns (Filing Status 3 or 4), DO NOT enter your spouse's name in the spouse name box. Instead enter your spouse's name on the Filing Status 3 or 4 line below the address box.

Address - Enter your home street address. Do not enter a P.O. Box unless mail is not delivered to your street address.

Social Security Number (SSN) - Be sure your social security number is entered correctly. The social security number entered in the "Your social security number" box, must be the number of the person whose name is shown first.

Deceased Taxpayers - Single filers: You must list the filer's name and Social Security Number and fill in the box for Primary Taxpayer Deceased. Include a copy of 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 box to indicate the deceased filer. Use the Primary Taxpayer Deceased box if the filer in the Your name and Social Security Number fields is deceased. Use the Spouse Deceased box 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 boxes. Include a copy of federal Form 1310 and/or the appropriate court appointment papers.

Privacy Act - The Privacy Act of 1974 requires any federal, state or local government agency that requests individuals to disclose their social security numbers to inform those individuals whether the disclosure is mandatory or voluntary, by what statutory or other authority the number is requested and how it will be used. The following information is provided to comply with these requirements.

Disclosure of the social security number is mandatory pursuant to these instructions, as set forth under Va. Code § 58.1-209. The social security number is used as a means of identification for the filing and retrieval of income tax returns and is also used to verify the identity of individuals for income tax refund purposes.

Date of Birth - Please be sure to provide this information. It is used to assist in the verification of taxpayer identity. If you are filing a joint return, enter your date of birth and your spouse's date of birth in the same order as your names and social security numbers.

City or County - Enter the name of the city or county where the principal place of business, employment or income source in Virginia is located. Check the appropriate city or county box, and enter, in the next box to the right, the 3-digit locality code from the back cover of this booklet for the city or county you entered.

CHECK BOXES

Below the name and address section, there are several check boxes. Please check all boxes that apply.

Amended Return - Check this box if this is an amended return. For more information, please refer to the "Amended Return" section of these instructions.
- Check if Result of NOL - Also, check this box if the reason for amending your return is the result of a net operating loss (NOL). For more information, please refer to the "Net Operating Loss" section of these instructions.
Dependent on Another's Return - Check the box if you can be claimed as a dependent on someone else's return. If you check this box, see the instruction for Line 12.
Name(s) and Address Different Than Shown on 2013 Virginia Return - Check this box if your or your spouse's name and/or address is different than the one shown on your 2013 Virginia Return.
Qualifying Farmer, Fisherman or Merchant Seaman - Check this box if you are a self-employed farmer, fishermen or merchant seaman and at least two-thirds of your gross income is from those employments. This information is used to identify farmers, fishermen and merchant seamen subject to special rules for paying estimated tax. See "Addition To Tax For Underpayment Of Tax" section in these instructions for details.
Overseas on Due Date - Check this box if you were living or traveling outside the United States and Puerto Rico (including serving in the military or naval service), on May 1, 2015. You must file your return by July 1, 2015.
Earned Income Tax Credit Claimed on Federal Return - If you claimed an Earned Income Tax Credit on your 2014 federal return, enter the amount claimed.

FILING STATUS

Enter the correct number in the box to identify your filing status.

In most cases, your filing status will be the same as the one you selected on your federal return.

If claiming Filing Status 3 or Filing Status 4, enter your spouse's name on the line provided in the Filing Status section and your spouse's Social Security Number in the name and address section of the return.

Same-sex couples that are married under the law of any state are now recognized as married couples for Virginia income tax purposes. For more information, see Virginia Tax Bulletin 14-7 (Public Document 14-174, 10/7/14).

Single (Filing Status 1) - Use this filing status if you claimed one of the following federal filing statuses on your federal return: Single, Head of Household, or Qualifying Widow(er). If you claimed the Head of Household filing status on your federal return, check the "Single" filing status box and the "Head of Household" box.

Married, Filing Joint Return (Filing Status 2) - BOTH spouses must have Virginia source income.

You and your spouse may choose to file a joint return if both have Virginia Source Income and

you computed your federal income tax liabilities together on a joint federal return; or
neither of you was required to file a federal return.

When using Filing Status 2 or 3 on Form 763, your spouse's exemption is included in the "Spouse" column. Do not claim your spouse as a dependent.

Married, Spouse Has No Income from Any Source (Filing Status 3) - Both spouses must file under this status if:

federal income tax liabilities are determined on a joint federal return; or
neither files a federal return; or
one spouse files a separate return and the other spouse has no gross income and was not a dependent of another taxpayer. Note that in this case, the standard deduction is limited to $3,000.

Married, Filing Separate Returns (Filing Status 4) - A separate return must be filed if one of the following applies:

both spouses are nonresidents and both have income from Virginia sources, but do not elect to file jointly;
both spouses are nonresidents and both have income, but only one has income from Virginia sources; or
one is a resident and the other is a nonresident with income from Virginia sources and they do not elect to file a joint resident return.

A spouse may claim only those personal exemptions, itemized deductions and other deductions that could have been claimed had a separate federal return been completed.

Where deductions and personal exemptions cannot be accounted for separately, they must be proportionately allocated between each spouse based on the income attributable to each. For example, if you file a joint federal return, one of you is a nonresident and you are unable to account separately for the child and dependent care deduction, that deduction must be proportionately allocated between each spouse based on the income attributable to each. One spouse may never claim less than a whole personal exemption. Even in the case where a husband and wife have equal income and one child, only one spouse may claim that child.

EXEMPTIONS

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

Section 1 - Dependents

Generally, you may claim the same number of dependent exemptions allowed on your federal return. If you are using Filing Status 3 or 4, 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 the exemptions claimed in the "You" and "Dependents" boxes by $930.

Section 2

65 or Over - To qualify for the additional personal exemption, you must have been age 65 or older on or before January 1, 2015.

Blind - To qualify for the additional personal exemption for the blind, you must have been considered blind for federal income tax purposes. Multiply the sum of exemptions claimed for "65 or over" and "Blind" by $800.

Exemption Amount - Add the dollar amount from "Total Section 1" box to the dollar amount from "Total Section 2" box. Enter this amount on Line 13.

HOW TO ENTER NUMBERS

Round to Whole Dollars: To improve return preparation accuracy 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 are to be rounded down while all amount 50 cents - 99 cents are to be rounded up.

Negative Numbers: Enter negative numbers (less than 0) in brackets. For example, if your federal adjusted gross income was negative 12,000 enter this as [12,000].

Line 1 - Adjusted Gross Income

Enter the total amount of your federal adjusted gross income from your federal income tax return. Do not enter your federal taxable income.

Where spouses have filed a joint return for federal income tax purposes and have not elected to file a joint Virginia income tax return, such items allowable for Virginia income tax purposes must be allocated and adjusted as follows:

Each spouse must claim his or her income. Income must be allocated to the spouse who earned the income and with respect to whose property the income is attributable.
Allowable adjustments to federal gross income with respect to trade, business, production of income or employment must be allocated to the spouse to whom they relate.

Line 2 - Additions from Schedule 763 ADJ

Complete Schedule 763 ADJ, Lines 1 through 3 and enter the amount from Line 3.

Line 3 - Total

Add Lines 1 and 2 and enter the total.

Line 4 - Age Deduction

Are you eligible to claim an age deduction?

If claiming an Age Deduction, see the Age Deduction instructions and complete the Age Deduction Worksheet on Page 9 in order to calculate the Qualifying Age Deduction.

For 2014, taxpayers born on or before January 1, 1950, may qualify to claim an age deduction based on birth date, filing status and income. A taxpayer who qualifies to claim an age deduction may NOT also claim a disability income subtraction, credit for low- income individuals, or Virginia earned income credit.

For married taxpayers, each eligible spouse may take either an age deduction or a disability income subtraction. Neither spouse may claim an age deduction if one spouse claimed a credit for low-Income Individuals or Virginia earned income credit, even if filing separate returns. Claim the deduction or subtraction that gives you the greatest tax benefit.

If you or your spouse are not claiming a disability subtraction or a credit for low-income and your birth date is on or before January 1, 1950, 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 2014.

Enter Birth Date

Enter your birth date in the name and address section on Page 1.

For Filing Status 1, enter your birth date.
For Filing Status 2, 3 and 4, enter your birth date and your spouse's birth date. Both birth dates are required even if only one qualifies for an age deduction.

Notice to ALL Married Taxpayers

A married taxpayer's income based age deduction is always determined using the married taxpayers' joint adjusted federal adjusted gross income or "AFAGI." Regardless of whether you are filing jointly or separately, if you are married, your income based age deduction is determined using both 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 and then the joint age deduction is allocated to each taxpayer.

Taxpayers Age 65 and Older

If you, or your spouse if you are married, were born on or before January 1, 1950, you may qualify to claim an age deduction of up to $12,000 each for 2014.

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 - Your age deduction is not income based. 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 a spouse born after January 1, 1939, the age deduction for that spouse is based on the criteria below.
On or between January 2, 1939, and January 1, 1950 - 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, minus taxable Social Security and Tier 1 Railroad benefits.

Line 5 - Social Security and Equivalent Tier 1 Railroad Retirement Act Benefits

Enter the amount of Title II Social Security Act Benefits and Equivalent Tier 1 Railroad Retirement Act Benefits included in adjusted gross income on your federal income tax return due to IRC § 86. This is the amount reported as taxable social security benefits on your federal return.

Do not include Tier 2 Railroad Retirement Benefits and Other Railroad Retirement and Railroad Unemployment Benefits. See instructions for Schedule 763 ADJ to determine if these benefits can be included as other subtractions.

Line 6 - State Income Tax Refund or Overpayment Credit

Enter the State Income Tax refund that you reported as income on your federal Return. State, local or foreign income taxes withheld from your salary, estimated tax payments or payments made on tax for a prior year to such taxing authority may be deducted on your federal return for the year withheld or paid. The federal deduction is for the amount paid rather than the tax liability, so a refund or credit is generally treated as taxable income (a recovery of an excessive deduction) on the federal return. Since Virginia does not allow the state and local income tax deduction, a federally taxable refund or overpayment credit is to be subtracted from federal adjusted gross income on the Virginia return.

Line 7 - Subtractions from Schedule 763 ADJ

Complete Schedule 763 ADJ, Lines 4 through 7, and enter the amount from Line 7.

Line 8 - Subtotal

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

Line 9 - Virginia Adjusted Gross Income

Subtract Line 8 from Line 3 and enter the result.

You are not required to file an individual income tax return if:

you are single (Filing Status 1) and Line 9 is less than $11,950;
you are married, filing a joint return (Filing Status 2) and Line 9 is less than $23,900; or
you are married and your spouse has no income from any source (Filing Status 3) or you are married filing a separate return from your spouse (Filing Status 4) and Line 9 is less than $11,950.

The filing threshold amount for a dependent (regardless of age) is the same as for any other individual (even if the dependent's standard deduction would be limited on Line 12).

If you are not required to file a return, but had income tax withheld or made estimated income tax payments, take the following steps to claim your full refund:

complete Lines 10 through 18 and enter enter "0" as your tax on Line 19.
complete Lines 20a through Line 38. You are entitled to a full refund because your income is below the filing threshold.

If you are required to file a return, continue to Line 10.

Line 10 - Itemized Deductions

You must claim itemized deductions on your Virginia return if you claimed itemized deductions on your federal return. Before completing Line 10, answer the following questions:

Do you have an addition or subtraction from Schedule 763 ADJ for Fixed Date Conformity (FDC)?

YES Complete the following FDC Worksheet and Itemized Deduction Worksheet.

NO Are your itemized deductions on your federal return limited?

YES Complete the following Itemized Deduction Worksheet.

NO Enter the total claimed on federal Schedule A on Line 10.

Proceed to the instruction for Line 11.

Line 11 - State and Local Income Tax

If claiming itemized deductions, enter the amount of state and local income tax allowed on your federal Schedule A.

Line 12 - Virginia Deductions

If claiming itemized deductions, subtract Line 11 from Line 10. The copy of your federal income tax return attached to Form 763 must include federal Schedule A.

If you did not claim itemized deductions on your federal income tax return, you must claim the standard deduction on your Virginia income tax return.

Enter the applicable standard deduction amount shown below on Form 763, Line 12.

Filing Status ..................................................... Standard Deduction

1. Single...................................................................$3,000

2. Married, filing joint return......................................$6,000

3. Married, spouse has no income from any source....$3,000

4. Married, filing separate return................................$3,000

Dependent's Limited Standard Deduction

If you could be claimed as a dependent on the federal income tax return of another taxpayer, your allowable standard deduction may not exceed the amount of your earned income. This rule applies to dependents of all ages, including children under age 19 and full- time students under 24 years old who are eligible to be claimed as a dependent on their parent's return.

Remember to check the box on the front of Form 763 if you can be claimed as a dependent on another's return.

Your maximum standard deduction for Line 10 is the lesser of EARNED INCOME; or

$3,000 if you are single (Filing Status 1)
$6,000 if you are married filing a joint return (Filing Status 2)
$3,000 if you are filing a separate return from your spouse (Filing Status 3 or 4).

Example: A person claimed as a dependent on another taxpayer's return has $4,200 interest from a bank account (unearned income) and $1,200 from a summer job (earned income). The standard deduction is $1,200 (the lesser of earned income or $3,000). If this dependent had earned income of $3,200 from the summer job, the full standard deduction of $3,000 would be allowed. All dependents are subject to the limitation. This includes children under age 19 and full-time students under the age of 24 who are eligible to be claimed as dependents on their parents' returns. Remember to check the box on Page 1 of the Form 763 if you can be claimed as a dependent on someone else's return and had unearned income. NOTE: The return of a taxpayer claiming a child (or other person) as a dependent is not affected if the child is required to claim a limited standard deduction.

Line 13 - Exemption Amount

Add the dollar amount from Exemption Section 1 to the dollar amount from Exemption Section 2.

Line 14 - Deductions from Schedule 763 ADJ

If you reported any deductions on Schedule 763 ADJ, enter the total amount from Line 9.

Line 15 - Subtotal

Add Lines 12, 13 and 14 and enter the total.

Line 16 - Taxable Income Computed as a Resident

Subtract Line 15 from Line 9 and enter the result.

Line 17 - Percentage from Nonresident Allocation Percentage Table

Complete the Nonresident Allocation Percentage Table on Page 2 of Form 763, Lines 1 through 15 and enter the percentage from Line 15 on Line 17 of the Form 763. Enter 100% if all of your income is from Virginia sources.

NOTE: Compute the percentage amount to one decimal place (example: 5.4%) not to exceed 100% or an amount less than 0. If the percentage amount is not entered as one decimal place, the processing of your return may be delayed.

Line 18 - Nonresident Taxable Income

Multiply the amount shown on Line 16 by the percentage shown on Line 17 and enter the result.

Line 19 - Income Tax

Enter the tax from the Tax Table included in these instructions. If Line 18 exceeds the maximum amount listed in the Tax Table, compute the tax using the Tax Rate Schedule.

Line 20a - Your Virginia Income Tax Withheld

Enter the amount shown as Virginia income tax withheld on Forms W-2, W-2G, 1099 or VK-1. Each form must show Virginia as the state where the income tax was withheld. Staple the forms to your return in the location indicated in the left margin.

Line 20b - Spouse's Virginia Income Tax Withheld

Withholding Forms: To receive credit for withholding, you must attach withholding statements (Forms W-2, W-2G, 1099 and VK-1) to your return. Make sure these withholding forms are easy to read and indicate the same amount(s) of withholding as you claim. Also, these statements must show the correct social security numbers and that the withholding was paid to Virginia. Staple these forms to the middle of the left margin on front of your Form 763. If you need a corrected Form W-2, W-2G, 1099 or VK-1, you must contact the issuer of that form.

Line 21 - 2014 Estimated Income Tax Payments

Enter the amount of 2014 Virginia estimated income tax payments.

Line 22 - Income Tax Carryover from Prior Year

Enter any estimated income tax carryover from your 2013 individual income tax return.

Line 23 - Extension Payments

Enter the total tentative tax payment made with Form 760IP.

Line 24 - Tax Credit for Low-Income Individuals or Virginia Earned Income Credit

If your total family income does not exceed the federal poverty guidelines or you claimed the federal Earned Income Credit, you may be eligible to claim the credit for low-income individuals or the Virginia Earned Income Credit. Individuals who are dependents on another taxpayer's return are not eligible for either credit.

These credits may not be claimed if you, your spouse, or any dependent claims any of the following:

Virginia National Guard subtraction
Military pay subtraction (first $15,000)
Subtraction for first $15,000 for state and federal employees whose annual salary is $15,000 or less
Exemption for taxpayers who are blind or age 65 and over
Age deduction

If you are eligible, calculate these credits by completing Schedule 763 ADJ, Lines 10 through 17. Enter the credit amount from Line 17 of Schedule 763 ADJ on Line 24 of Form 763. See instructions for Schedule 763 ADJ starting on Page 15.

Line 25 - Credit for Tax Paid to Another State

Generally, Virginia will not allow taxpayers filing nonresident individual income tax returns to claim credit for income tax paid to another state. The only exception to the above rule involves income taxes paid to the following states:

Arizona
District of Columbia
California
Oregon

If you are a resident of one of the above states and have Virginia source income as a "nonresident" and the income is taxed by both Virginia and the other state, you are eligible for this credit.

After you have completed Schedule OSC, enter the credit amount from Schedule OSC on Line 25. See instructions for Schedule OSC on Page 29.

Line 26 - Credit for Political Contributions

If you are claiming a Political Contributions Credit, enter the amount of the credit. The Political Contributions Credit is available to individuals who make contributions to candidates for state or local political office. The credit is 50% of the amount of the contribution, subject to a $25 limit for individuals and a $50 limit for married taxpayers filing jointly and cannot exceed your tax liability.

Line 27 - Credits from Schedule CR

Complete Schedule CR and attach it to your return to claim the following tax credits. For some credits, other Virginia forms are also required. To obtain Schedule CR, Schedule CR Instructions and these other credit forms, see Page 2, Where to Get Forms.

For details on these credits and information on carryover and pass- through provisions, refer to Schedule CR, Schedule CR instructions and the organizations or forms specified.

The following table lists all the credits that can be claimed against individual income tax. For more information, visit www.tax. virginia.gov.

Trust Beneficiary Accumulation Distribution Tax Credit
Enterprise Zone Act Tax Credit
Neighborhood Assistance Act Tax Credit
Recyclable Materials Processing Equipment Tax Credit
Conservation Tillage Equipment Tax Credit
Precision Fertilizer and Pesticide Application Equipment Tax Credit
Rent Reduction Program Tax Credit
Vehicle Emissions Testing Equipment and Clean-Fuel Vehicle Tax Credit
Major Business Facility Tax Credit
Foreign Source Retirement Income Tax Credit
Historic Rehabilitation Tax Credit
Day-Care Facility Investment Tax Credit
Low-Income Housing Tax Credit
Qualified Equity and Subordinated Debt Investments Tax Credit
Worker Retraining Tax Credit
Waste Motor Oil Burning Equipment Tax Credit
Purchase of Long-Term Care Insurance Tax Credit
Biodiesel and Green Diesel Fuels Tax Credit
Livable Home Tax Credit (formerly Home Accessibility Features for the Disabled)
Riparian Waterway Buffer Tax Credit
Land Preservation Tax Credit
Community of Opportunity Tax Credit
Green Jobs Creation Tax Credit
Farm Wineries and Vineyards Tax Credit
International Trade Facility Tax Credit
Port Volume Increase Tax Credit
Barge and Rail Usage Tax Credit
Research and Development Tax Credit
Telework Expenses Tax Credit
Education Improvement Scholarships Tax Credit
Coalfield Employment Enhancement Tax Credit
Virginia Coal Employment and Production Incentive Tax Credit
Motion Picture Production Tax Credit
Agricultural Best Management Practices Tax Credit

Line 28 - Total Payments and Credits

Add Lines 20a through 27 and enter the amount.

Line 29 - Income Tax You Owe

If Line 19 is larger than Line 28, enter the difference and skip to Line 34.

Line 30 - Overpayment Amount

If Line 28 is larger than Line 19, enter the difference.

Line 31 - Credit to 2015 Estimated Income Tax

Enter the amount of the net overpayment amount from Line 30 to be credited to 2015 estimated tax.

Line 32 - Virginia College Savings PlanSM Contributions

If you would like to contribute some or all of your refund to one or more Virginia College Savings PlanSM accounts, enter the amount from Schedule VAC, Part I, Section B, Line 6.

Line 33 - Other Contributions from Schedule VAC

If you contributed to one or more other voluntary contribution organizations listed in the income tax instructions, enter the amount from Schedule VAC, Part II, Section D, Line 14.

Line 34 - Addition to Tax, Penalty and Interest

Enter the total adjustments from Schedule 760PY ADJ, Line 21.

If you leave Line 34 blank, the Department will compute the addition to tax, penalty and interest for you and then send you a bill, if applicable. If your income varied during the year, however, you may be entitled to a lower addition to tax than what the Department would automatically compute. In such cases, you should complete Form 760C to show when the income was received and what the addition to tax should be.

Attach Form 760C or Form 760F (for Farmers, Fishermen or Merchant Seamen) if you computed the addition to tax and/ or if you are claiming one of the exceptions that voids the addition to tax.

Line 35 - Consumer's Use Tax

You are required to pay consumer's use tax on purchases, leases, and rentals of tangible personal property acquired in or outside Virginia for storage, use or consumption in Virginia if retail sales and use tax was not collected on the transaction. Examples include untaxed purchases made (1) over the Internet, (2) through out-of-state mail order catalogs, or (3) while traveling out-of-state.

If the amount of purchases from out-of-state mail order catalogs totaled $100 or less for the entire year, you do not have to pay consumer's use tax on these purchases. If the purchases were from out-of-state mail order catalogs and exceed $100, or the purchases were of any amount from sources other than mail order catalogs, then you must pay consumer's use tax on the total amount of untaxed purchases made during the calendar year from all sources. The tax is based on the "cost price" of the goods and does not include separately stated shipping or delivery charges but it does include any "shipping and handling" charges if listed as a combined item on the sales invoice.

Nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings are exempt from the consumer's use tax.

Tax Rates:

The general tax rate is 6% in the following cities and counties in the Hampton Roads and Northern Virginia regions:

Chesapeake City
Alexandria City
Franklin City
Fairfax City
Hampton City
Falls Church City
Newport News City
Manassas City
Norfolk City
Manassas Park City
Poquoson City
Arlington County
Portsmouth City
Fairfax County
Suffolk City
Loudoun County
Virginia Beach City
Prince William County
Williamsburg City
Isle of Wight County
James City County
Southampton County
York County

The general tax rate is 5.3% in all other areas of Virginia.

Statewide, the tax rate on food purchased for home consumption is 2.5%.

Visit www.tax.virginia.gov for more information. Enter the amount of Consumer Use Tax you owe on Form 763, or file Form CU-7.

Line 36 - Subtotal

Add Lines 31 through 35 and enter the amount.

Line 37 - Amount You Owe

IF YOU OWE TAX on Line 29, add Lines 29 and 36.

- OR -

If Line 30 is an OVERPAYMENT and Line 36 is LARGER THAN Line 30, enter the difference. This is the amount you owe.

PAYMENT OPTIONS

If your bank does not honor your payment to the Department, the Department may impose a penalty of $35, as authorized by Va. Code § 2.2-614.1. This penalty will be assessed in addition to any other penalties, such as the penalty for late payment of tax.

Check - Make your check payable to the Treasurer or Director of Finance of the city or county in which all or the principal part of income from Virginia sources was derived. See the inside back cover of this booklet for a listing of localities. Make sure your social security number is on your check and make a notation that it is your 2014 Virginia income tax payment. Submit your check with your return.

Credit Card - Call 1-800-272-9829 or visit www.officialpayments.com to pay by credit card. If you choose this option, check the box on Line 37 indicating this type of payment.

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 at that time with no charge.

Online - Make an online payment from your checking or savings account for balance due returns using Web Payments at www.tax.virginia.gov.

Line 38 - Amount to Be Refunded to You

If Line 30 is larger than Line 36, subtract Line 36 from Line 30 and enter the refund amount. If you are due a refund and do not complete Line 38, your refund may be delayed.

You no longer have the option of requesting a paper refund check. If you do not complete the Direct Deposit section, you authorize the Department to issue you a Refund Debit Card.

REFUND OPTIONS

Direct Deposit - Get your refund faster!

Have your refund deposited directly into your bank account. If the ultimate destination of your refund is to a financial institution within the territorial jurisdiction of the United States, you can use direct deposit to receive your refund fast! Have your refund deposited directly into your bank account. If the ultimate destination of your refund is to a financial institution within the territorial jurisdiction of the United States, you can use the direct bank deposit option to receive your refund fast. Please note, however, that the Department will not support the direct bank deposit to refunds when the ultimate destination is a financial institution outside the territorial jurisdiction of the United States. Attempting to use the Direct Bank Deposit option to transfer funds electronically to such foreign financial institutions will significantly delay the issuance of your refund.

Check the box to indicate whether the account number is for a checking or savings account.

Bank Routing Number: Enter your bank's 9-digit routing transit number printed on the bottom of your check. The first 2 digits of the routing number must be 01 through 12 or 21 through 32. Do not use a deposit slip to verify the 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. Do not include the check number.

Debit Card - The Commonwealth of Virginia no longer issues paper refund checks. If you do not complete the Direct Bank Deposit section on Form 763, you authorize the Department to issue you a Refund Debit Card.

If you prefer to have your refund mailed to you, or if the destination of the funds is outside the territorial jurisdiction of the United States, do not complete the Direct Bank Deposit information.

Nonresident Allocation Percentage Table

Complete this table to determine the percentage of your income derived from Virginia sources. Each type of income listed is from TOTAL INCOME shown on the federal individual income tax return with the exception of Lines 12 and 13. Do not include any income that was already included on a unified return.

Lines 1 through 13, Column A:

Lines 1 Through 11

For each type of income listed, enter in Column A the amount reported as income on your federal individual income tax return. NOTE: Do not reduce this income by any adjustments to income shown on your federal individual income tax return.

Line 12 - Interest on Obligations of Other States

Enter the amount from Schedule 763 ADJ, Line 1.

Line 13 - Lump-Sum Distributions/Accumulation Distributions

Enter the total lump-sum and accumulation distributions included on Line 3 of Schedule 763 ADJ.

Lines 1 Through 13, Column B:

For each type of income listed in Column A, enter in Column B the portion of the income that is from Virginia sources. Income from Virginia sources includes:

Items of income gain, loss and deductions attributable to:
1. The ownership of any interest in real or tangible personal property in Virginia;
2. A business trade, profession, or occupation carried on in Virginia; and
3. Prizes paid by the Virginia Lottery Department and gambling winnings from wagers placed or paid at a location in Virginia.
Income from intangible personal property, including annuities, dividends, interest, royalties and gains from the disposition of intangible personal property employed by an individual in a business, trade, profession or occupation carried on in this state (for example: dividend income from a Virginia S corporation).
Exception for Certain Nonresidents: Residents of Kentucky, Maryland, Pennsylvania, West Virginia and the District of Columbia who meet the "Exceptions for Certain Nonresidents" in these instructions are not required to file a Virginia return if their only income from Virginia sources was from salaries and wages. If these individuals have business income from Virginia sources, other than from salaries and wages, only that other business income should be entered in Column B. For most nonresidents, the income shown on Lines 2, 3 and 12, Column A, is not considered income from Virginia sources. For example, if a nonresident earned interest from a bank account or dividends from a corporation located in Virginia, that income is intangible income and therefore would generally not be entered in Column B. Virginia does not tax nonresident individuals on intangible income except as noted in number 2 above.

Line 14 - Total

Total Lines 1 through 13, Column A and Column B.

Line 15 - Nonresident Allocation Percentage

Divide Line 14, Column B, by Line 14, Column A, and report the result as a percentage amount to one decimal place, showing no more than 100% or less than 0%. Example: 0.3163 becomes 31.6%. Enter the percentage here and on Line 17, Form 763, Page 1.

Authorization to Discuss with Preparer

I (we) authorize the Department of Taxation to discuss this return with my (our) preparer.

Check this box if you would like to give the Department authorization to discuss your return information with your tax preparer.

Electronic Form 1099-G - At the bottom of the return above the signature area, a check box is provided for you to indicate that you agree to obtain your statement of refund (Form 1099-G) electronically instead of receiving a copy by mail. Form 1099-G/1099-INT is an informational statement issued by the Department in January of each year to report payments made or credited to taxpayers during the previous calendar year. The statement is also provided to those who receive interest payments of $10 or more during the year. These statements must be used in preparing federal returns by taxpayers who itemize deductions. Form 1099-G/1099-INT may be downloaded securely and printed from the Department's website, www.tax.virginia.gov.

Sign Your Return

The signature block on Form 763 is on the bottom of Page 2. 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.

Telephone Numbers - Include your daytime and evening phone numbers in the spaces provided. Phone numbers are requested so the Department can contact you if there is a question about your return.

Tax Preparer Information - If you paid someone to prepare your return, the preparer should provide contact information in the spaces provided.

Phone Numbers - Enter phone numbers in the space provided.

Tax Preparer Information - If you paid someone to prepare your return, the preparer should provide contact information in the spaces provided.

Preparer's PTIN, Vendor Code and Filing Election Code

For returns completed by a paid preparer, the tax preparer should complete these fields. Use one of the codes below to complete the Filing Election Code field.

Code 2 - Taxpayer opted out of electronic filing.

Code 3 - Preparer prepares less than 50 returns annually.

Code 4 - Preparer capable of electronic filing, but return cannot be accepted electronically.

Code 5 - Preparer has a hardship waiver.

Code 6 - Preparer capable of electronic filing, but not yet approved as electronic return originator by IRS.

LINE INSTRUCTIONS FOR VIRGINIA SCHEDULE 763 ADJ

FIXED DATE CONFORMITY UPDATE FOR 2014

Virginia's Fixed Date Conformity with the Internal Revenue Code: Virginia's date of conformity with the federal enhanced Earned Income Tax Credit ("EITC") was extended to taxable years ending before January 1, 2018. Virginia will continue to allow taxpayers to claim either the Tax Credit for Low-Income Individuals or a credit equal to 20% of the Federal EITC that was claimed for the taxable year. Low-Income taxpayers may also continue to claim the portion of the Virginia Low-Income Tax Credit that is based on the federal EITC without making complex adjustments on their Virginia income tax returns.

ADDITIONS TO FEDERAL ADJUSTED GROSS INCOME

MUTUAL FUNDS

If you received federally tax exempt interest dividends from a regulated investment company (mutual fund) that invested in obligations both taxable and exempt for Virginia purposes, the entire dividend income must be entered as an addition unless you attach a statement provided by the fund that:

details the amount of dividends you earned; and
summarizes the prorations between exempt and taxable dividends (monthly breakdown is preferred).

A typical situation would involve a mutual fund that invests in bonds of several states, including Virginia. The interest on the bonds issued by the other states is taxable for Virginia purposes, even though exempt for federal purposes. Unless the taxpayer is able to substantiate the amount attributable to the Virginia bonds, the total amount of dividends exempt from federal taxation will be an addition on the Virginia return.

Line 1 - Interest on Obligations of Other States

Enter the interest not included in federal adjusted gross income, less related expenses to the extent not deducted in determining federal taxable income, on obligations of any state other than Virginia, or of a political subdivision of any such state unless created by compact or agreement to which this state is a party.

Line 2 - Other Additions

Enter on Line 2a any addition due to Fixed Date Conformity.

A. Bonus Depreciation - For an explanation, please see the section titled, Fixed Date Conformity Update. Enter the amount that should be added to Federal Adjusted Gross Income based upon the recomputation of allowable depreciation..............______

B. Other Fixed Date Conformity Additions from Supplemental Instructions - If you are required to make any Other Fixed Date Conformity additions, enter the total amount of such additions on this line. Also, please attach a schedule and explanation of such additions. ...................______

C. Total of Lines A and B - Enter the total of Lines A and B here and on Schedule 763 ADJ Line 2a...................______

Lines 2b - 2c - Other Additions

On Lines 2b - 2c, enter the 2-digit code listed below, followed by the amount, for any additions to federal adjusted gross income. If you have more than 2 additions on Lines 2b - 2c of Schedule 763 ADJ, enter code "00" and the total addition amount on Line 2b and attach an explanation of each addition to your return.

CODE

Interest on Federally Tax-Exempt US Obligations - Enter the interest or dividends, less related expenses to the extent not deducted in determining federal taxable income, on obligations or securities of any authority, commission or instrumentality of the United States, which the laws of the United States exempt from federal income tax but not from state tax.

Accumulation Distribution Income - Enter the taxable income used to compute the partial tax on an accumulation distribution as reported on federal Form 4970.

Lump-Sum Distribution Income - If you received a lump-sum distribution from a qualified retirement plan and elected to use the 20% capital gain election, the 10-year averaging option, or both on federal Form 4972, complete the worksheet below to determine what portion, if any, must be included as an addition on the Virginia return.

1. Enter the total amount of the distribution subject to federal tax (ordinary income and capital gain)..	______
2. Enter the total federal minimum distribution allowance, federal death benefit exclusion and federal estate tax exclusion...	______
3. Deduct Line 2 from Line 1. Enter code, and amount on Schedule 763 ADJ..	______

Income from Dealer Disposition of Property - Enter the amount that would be reported under the installment method from certain dispositions of property. If, in a prior year, the taxpayer was allowed a deduction for certain income from dealer dispositions of property made on or after January 1, 2009, in the years following the year of disposition, the taxpayer is required to add back the amount that would have been reported under the installment method. Each disposition must be tracked separately for purposes of this adjustment.

Telework Expenses - Individuals who claim the Virginia Telework Expenses Tax Credit are not allowed to exclude those expenses from Virginia taxable income. To the extent excluded from federal adjusted gross income, any expenses incurred by a taxpayer in connection with the Telework Expenses Tax Credit must be included as an addition on the Virginia return.

First-Time Home Buyer Savings Accounts - To the extent excluded from federal adjusted gross income, an account holder must add any loss attributable to his or her first-time home buyer savings account that was deducted as a capital loss for federal income tax purposes. For more information, see the First-Time Home Buyer Savings Account Guidelines, available in the Laws, Rules & Decisions section of the Department's website at www.tax.virginia.gov.

Other

Attach an explanation for other additions.

Line 3 - Total Additions

Add Lines 2a, 2b and 2c and enter on Line 3 and on Form 763, Line 2.

SUBTRACTIONS FROM FEDERAL ADJUSTED GROSS INCOME

To the extent included in federal adjusted gross income, the following subtractions are allowed on the Virginia return. No amount previously excluded from FAGI can be claimed as a subtraction in computing Virginia taxable income. The same income may not be included in more than one subtraction.

Special instructions for members of the military Virginia law provides three subtractions for military servicemembers.

military pay and allowances earned while serving in a combat zone or qualified hazardous duty area (Va. Code § 58.1-322 C 21);
military basic pay for personnel on extended active duty for periods in excess of 90 consecutive days (Va. Code § 58.1-322 C 23); and
wages or salaries received for active and inactive service in the National Guard of the Commonwealth (Va. Code § 58.1-322 C 11).

Servicemembers may be eligible for more than one subtraction, but the same income may not be included in more than one subtraction. For example, a servicemember may not deduct the same income for both the military basic pay subtraction and the National Guard subtraction.

MUTUAL FUNDS

If you received income from a regulated investment company (mutual fund) that invested in obligations both taxable and exempt for Virginia purposes, the entire income must be considered taxable by Virginia unless you attach a statement provided by the fund that:

details the amount of income you earned; and
summarizes the prorations between exempt and taxable income (monthly breakdown is preferred).

If you provide this information, enter the exempt portion of income on Line 4 or Line 6 as appropriate.

Line 4 - Income from U.S. Obligations

Enter the amount of income (interest, dividends and gain) derived from obligations or the sale or exchange of obligations of the United States and on obligations or securities of any authority, commission or instrumentality of the United States to the extent included in federal adjusted gross income, but exempt from state income taxes under the laws of the United States. This includes, but is not limited to, stocks, bonds, treasury bills and treasury notes. It does not include interest on refunds of federal taxes, equipment purchase contracts or normal business transactions.

The following is a partial list of taxable and exempt income. This list is based on the Department's analysis of federal and state law as applicable to selected organizations. For organizations not listed below, additional information must be attached showing that the income is exempt from Virginia income tax.

Issuing Organization	VA Tax Status
Export-Import Bank of the United States (Export-Import Bank of Washington)	Exempt
Farm Credit Bank	Exempt
Federal Deposit Insurance Corporation	Exempt
Federal Home Loan Bank	Exempt
Federal Intermediate Credit Bank	Exempt
Federal Land Bank	Exempt
Federal Reserve Stock	Exempt
Governments of Guam, Puerto Rico and Virgin Islands	Exempt
Resolution Trust Corporation	Exempt
Student Loan Marketing Association (Sallie Mae)	Exempt
Tennessee Valley Authority	Exempt
US Postal Service	Exempt
US Treasury bills, notes, bonds & savings bonds (such as Series E, EE, H, HH, etc.)	Exempt
Federal Home Loan Mortgage Corporation (Freddie Mac)	Taxable
Federal National Mortgage Association (Fannie Mae)	Taxable
Government National Mortgage Association (Ginnie Mae)	Taxable
Inter-American Development Bank	Taxable
International Bank for Reconstruction and Development	Taxable

Line 5 - Disability Income

Enter the amount of disability income reported as wages (or payments in lieu of wages) on your federal return for permanent and total disability. On joint returns, each spouse can qualify for the deduction. Individuals can deduct up to $20,000 of disability income as defined under IRC § 22(c)(2)(b)(iii).

You - Enter YOUR subtraction on Line 5a.

Spouse, Filing Status 2 - Enter SPOUSE'S subtraction on Line 5b.

NOTE: Eligible taxpayers may claim EITHER this disability income subtraction OR the age deduction on Line 4, Form 763. If you are married filing a joint return, each spouse may claim, if eligible, either an age deduction or disability subtraction. Use the one that benefits you the most.

Line 6 - Other Subtractions

Line 6a Enter the amount if you have any subtraction due to Fixed Date Conformity.

A. Bonus Depreciation - For an explanation, please see the section titled, Fixed Date Conformity Update. Enter the amount that should be subtracted from Federal Adjusted Gross Income based upon the recomputation of allowable depreciation..._____

B.Other Fixed Date Conformity Subtractions - If you are required to make any Other Fixed Date Conformity subtractions, enter the total amount of such subtractions on this line. Also, attach a schedule and explanation of such subtractions. Enter total Supplemental Fixed Date Conformity subtractions here..______

C. Total of Lines A and B - Enter the total of Lines A and B here and on Schedule 763 ADJ, Line 6a....................______

Lines 6b - 6d - Other Subtractions

Enter the code and subtraction amount on Lines 6b - 6d. If you have more than 3 subtractions, enter Code "00" and the total amount of Other Subtractions you are claiming on Line 6b and attach to your return a list showing each subtraction along with its subtraction code and amount.

CODE
20	Income from Virginia Obligations - Enter the amount of income from Virginia obligations that you included in your federal adjusted gross income.
21	Federal Work Opportunity Tax Credit Wages - Enter the amount of wages or salaries eligible for the federal work opportunity tax credit that you included in your federal adjusted gross income. Do not enter the federal credit amount.
22	Tier 2 and Other Railroad Retirement and Railroad Unemployment Benefits - Enter the amount of Tier 2 vested dual benefits and other Railroad Retirement Act Benefits and Railroad Unemployment Insurance Act Benefits included in federal adjusted gross income and reported on your federal return as a taxable pension or annuity. If any part of your Tier 1 Railroad Retirement Act benefits paid by the Railroad Retirement Board is properly treated as a fully taxable pension on your federal income tax return, deduct the amount received while a resident of Virginia on this line. Do not include any amount of Tier 1 Railroad Retirement Board retirement benefits that were included in your gross income as the taxable portion of your social security and railroad retirement benefits on your federal return because that portion should be deducted on Line 5 of the Form 763. This subtraction does not apply to supplemental annuities received by retired employees of railroads under a company pension plan set up by a particular railroad, whether the plan was contributory or non contributory.
24	Virginia Lottery Prizes - Enter the sum of all prizes under $600 awarded to you by the Virginia Lottery Department to the extent that you included them in your federal adjusted gross income.
28	Virginia National Guard Income - Enter the amount of wages or salaries for active and inactive service in the National Guard of the Commonwealth of Virginia for persons of rank O3 and below included in federal adjusted gross income. This amount may not exceed the amount of income received for 39 days or $3,000, whichever is less. Reminder: This subtraction does not apply to members of the active or reserve units of the Army, Navy, Air Force or Marines, or the National Guard of other states or the District of Columbia. If you claim this subtraction, you cannot claim a credit for Low-Income Individuals or Virginia Earned Income Credit.
30	Military Pay and Allowances Attributable to Active Duty Service in a Combat Zone or a Qualified Hazardous Duty Area - Enter any military pay and allowances earned while serving by the order of the President of the United States with the consent of Congress in a combat zone or qualified hazardous duty area treated as a combat zone for federal tax purposes pursuant to IRC § 112 that has not been otherwise subtracted, deducted or exempted from federal adjusted gross income.
31	Retirement Plan Income Previously Taxed by Another State - Enter the amount of retirement income received during the taxable year on which the contributions were taxed in another state, but were deductible from federal adjusted gross income during the same period. The total amount of this subtraction cannot exceed the amount of the contributions previously taxed by another state, usually in a previous year.
34	Virginia College Savings Plan Income Distribution or Refund - Enter the amount of any income included in federal adjusted gross income that is attributable to a distribution of benefits or a refund from the Virginia College Savings Plan (previously called the Virginia Higher Education Tuition Trust Fund), in the event of a beneficiary's death, disability or receipt of scholarship.
37	Unemployment Benefits - Enter the amount of unemployment compensation benefits received during the taxable year reported as income on your federal income tax return.
38	Military Basic Pay - Military service personnel may subtract up to $15,000 of military basic pay received during the taxable year, provided they are on extended active duty for a period in excess of 90 consecutive days. Military personnel stationed inside or outside Virginia are eligible. This subtraction is allowed for military basic pay that is included in federal adjusted gross income and is not included in another subtraction, such as the Virginia National Guard Income Subtraction. If the military basic pay does not exceed $15,000, then the entire amount may be subtracted. If the basic military pay is over $15,000, then the subtraction is reduced by the amount exceeding $15,000. For every $1 of income over $15,000, the maximum subtraction is reduced by $1. If your basic military pay is $30,000 or more, you are not entitled to a subtraction. On joint returns, each spouse can qualify for the subtraction. If you claim this subtraction, you cannot claim a Credit for Low-Income Individuals or Virginia Earned Income Credit.
39	Federal and State Employees - Any individual who qualifies as a federal or state employee earning $15,000 or less in annual salary from all employment can subtract up to $15,000 of the salary from that state or federal job. If both spouses on a joint return qualify, each spouse may claim the subtraction. The subtraction cannot exceed the actual salary received. If you claim this subtraction, you cannot claim a Credit for Low-Income Individuals or Virginia Earned Income Credit.
40	Income Received by Holocaust Victims - To the extent included in your federal adjusted gross income, subtract any income resulting from the return or replacement of assets stolen during the Holocaust and throughout the time period leading up to, during, and directly after World War II as a result of: Nazi persecution, an individual being forced into labor against his or her will, transactions with or actions of the Nazi regime, treatment of refugees fleeing Nazi persecution, or holding of such assets by entities or persons in the Swiss Confederation.
41	Tobacco Settlement Fund Income - Enter the amount of payments received under the Tobacco Master Settlement Agreement and the National Tobacco Grower Settlement Trust provided they have not been deducted for federal tax purposes.
42	Gain on The Sale of Land for Open-Space Use - Enter the amount of any gain on the sale or exchange of real property or easement to real property which results in the property or easement being devoted to open-space use as defined in the Va. Code § 58.1-3230 for a period not less than 30 years.
44	Medal of Honor Recipients - Enter the amount of military retirement income you received as an individual awarded the Medal of Honor.
46	Military Death Gratuity Payments - Retroactive to taxable year 2001, survivors of military personnel killed in the line of duty may claim a subtraction for military death gratuity payments made after September 11, 2001, to the extent that the payments were included in federal adjusted gross income.
49	Certain Death Benefit Payments - Allows a beneficiary taxpayer to subtract the death benefit payments received while a Virginia resident from an annuity contract that are subject to federal income taxation, for taxable years beginning on or after January 1, 2007. In order to qualify for this subtraction, a death benefit payment is required to meet the following criteria: 1) the death benefit payment is made pursuant to an annuity contract with an insurance company; 2) the payment must be awarded to the beneficiary in a lump sum; and 3) the payment must be subject to taxation at the federal level.
50	Pass-Through Entity Income - Enter the amount of Pass-Through Entity (PTE) income that was included on a unified return. Do not include the PTE income in the nonresident allocation percentage schedule.
51	Gains from Land Preservation - This is a subtraction for federal gain or federal income recognized by a taxpayer on the application of a Land Preservation Tax Credit. The transfer of the credit and its application against a tax liability shall not create gain or loss for the transferor or the transferee of such credit.
52	Long-Term Capital Gain - Income taxed as a long-term capital gain, or any income taxed as investment services partnership income for federal tax purposes is allowed as a subtraction provided the income is attributable to an investment in a "qualified business" as defined in Va. Code § 58.1-339.4 or in any other technology business approved by the Secretary of Technology. The business must have its principal facility in Virginia and less than $3 million in annual revenues for the fiscal year preceding the investment. The investment must be made between the dates of April 1, 2010, and June 30, 2015. Taxpayers claiming the Qualified Equity and Subordinated Debt Credit cannot claim this subtraction relating to investments in the same business. In addition, no investment is "qualified" for this deduction if the business performs research in Virginia on human embryonic stem cells.
53	Historic Rehabilitation - To the extent included in federal adjusted gross income, any amount of gain or income recognized by a taxpayer in connection with the Historic Rehabilitation Tax Credit is allowed as a subtraction on the Virginia return.
54	First-Time Home Buyer Savings Accounts - To the extent included in federal adjusted gross income, an individual may subtract any income attributable to a first-time home buyer savings account that was taxed as interest, capital gains, or other income for federal income tax purposes. Distributions from a first-time home buyer savings account may only be used for the purpose of paying or reimbursing the down payment and allowable closing costs for the purchase of a single-family residence in Virginia by a qualified beneficiary. The subtractions claimed by an account holder in all prior taxable years are subject to recapture in the taxable year in which account funds are withdrawn for any other purpose. To claim the subtraction, an individual must designate an account as a first-time home buyer savings account. An individual may designate an account by submitting an attachment with their Virginia income tax return for the first taxable year in which such individual claims the subtraction. An individual must submit a separate attachment for each account that he or she is designating. The attachment must include the following information: The name and address of the financial institution that maintains the account; The names of any other individuals with an ownership interest in the account; The account number or other account identifier; The type of principal (cash or marketable securities) contributed to the account as of the last day of the taxable year; The amount of any withdrawals from the account during the taxable year; and The account beneficiary or beneficiaries. After designating an account as a first-time home buyer savings account, the account holder is required to include an attachment with updated information for the account for all future taxable years in which he or she is required to file a Virginia income tax return. If an account holder has designated more than one existing first-time home buyer savings account, the account holder is required to submit a separate attachment with updated information for each account. More information is available in the First- Time Home Buyer Savings Account Guidelines, which are available in the Laws, Rules & Decisions section of the Department's website at www.tax.virginia.gov.
99	Other - Attach a schedule of explanation for other subtractions.

Line 7 - Total Subtractions

Add Lines 4, 5a, 5b and 6a-6d and enter the amount on Line 7 and on Form 763, Line 7.

DEDUCTIONS FROM VIRGINIA ADJUSTED GROSS INCOME

Lines 8a - 8c Deductions

On Lines 8a-8c, enter the 3-digit code, listed in the following table, in the boxes on Schedule 763 ADJ, followed by the amount, for any deductions from Virginia adjusted gross income in the categories listed below.

Other Deductions for Lines 8a - 8c If you have more than 3 deductions on Lines 8a-8c of Schedule 763 ADJ , enter the code "000" and the amount of total deductions in the first box and attach an explanation of each deduction to your return.

CODE

101

Child and Dependent Care Expenses - Enter the amount on which the federal credit for child and dependent care expenses is based. This is the amount on federal Form 2441 or Schedule 2 of Form 1040A that is multiplied by the decimal amount. Do not enter the federal credit amount.

You may claim the deduction for child and dependent care expenses on your Virginia return only if you were eligible to claim a credit for child and dependent care expenses on your federal return. If you filed a joint federal return and you file a separate Virginia return, you may allocate this amount as mutually agreed.

The amount of employment-related expenses that may be deducted is limited to the amount actually used in computing the federal credit for child and dependent care expenses. As a general rule, you are limited to a maximum of $3,000 for one child and $6,000 if you are claiming the expenses for two or more dependents, or the earned income of the spouse having the lowest income, whichever is less.

102

Foster Care Deduction - Foster parents may claim a deduction of $1,000 for each child residing in their home under permanent foster care, as defined in the Code of Virginia, provided that they claim the foster child as a dependent on their federal and Virginia income tax returns.

103

Bone Marrow Screening Fee - Enter the amount of the fee paid for an initial screening to become a possible bone marrow donor, if you were not reimbursed for the fee or did not claim a deduction for the fee on your federal return.

104

Virginia College Savings Plan Prepaid Tuition - Contract Payments and Savings Account Contributions - If you are under age 70 on or before December 31 of the taxable year, enter the lesser of $4,000 or the amount contributed during the taxable year to each Virginia529 account (Virginia 529 prePAID, Virginia 529 inVEST, College America, or CollegeWealth). If you contributed more than $4,000 per account during the taxable year, you may carry forward any undeducted amounts until the contribution has been fully deducted. If you are age 70 or older on or before December 31 of the taxable year, you may deduct the entire amount contributed to the Virginia529 accounts during the taxable year. Only the owner of record for an account may claim a deduction for contributions made.

105

Continuing Teacher Education - A licensed primary or secondary school teacher may enter a deduction equal to 20% of unreimbursed tuition costs incurred to attend continuing teacher education courses that are required as a condition of employment, provided that these expenses were not deducted from federal adjusted gross income.

106

Long-Term Health Care Premiums - Enter the amount of premiums paid for long-term health care insurance, provided that they were not actually included as a deduction on Schedule A of your federal income tax return.

107

Virginia Public School Construction Grants Program and Fund - Enter the amount of total contributions to the Virginia Public School Construction Grants Program and Fund, provided you have not claimed a deduction for this amount on your federal income tax return.

108

Tobacco Quota Buyout Allows a deduction from taxable income for payments received in the preceding year in accordance with the Tobacco Quota Buyout Program of the American Jobs Creation Act of 2004 to the extent included in federal adjusted gross income and received while a Virginia resident. For example, on your 2014 Virginia return you may deduct the portion of such payments received in 2013 that is included in your 2013 federal adjusted gross income; while payments received in 2014 may generate a deduction on your 2015 Virginia return. Individuals cannot claim a deduction for a payment that has been, or will be, subtracted by a corporation unless the subtraction is shown on a Schedule VK-1 you received from an S Corporation. If you chose to accept payment in installments, the gain from the installment received in the preceding year may be deducted. If, however, you opted to receive a single payment, 10% of the gain recognized for federal purposes in the year that the payment was received may be deducted in the following year and in each of the nine succeeding taxable years

109

Sales Tax Paid on Certain Energy Efficient Equipment or Appliances - Allows an income tax deduction for 20% of the sales tax paid on certain energy efficient equipment or appliances, up to $500 per year. If filing a joint return you may deduct up to $1,000.

110

Organ and Tissue Donor Expenses - Allows a deduction for unreimbursed expenses that are paid by an living organ and tissue donor, that have not been taken as a medical deduction on the taxpayer's federal income tax return. The amount of the deduction is the lesser of $5,000 or the actual amount paid by the taxpayer.

111

Charitable Mileage - Enter the difference between 18 cents per mile and the charitable mileage deduction per mile allowed on federal Schedule A. If you used actual expenses for the charitable mileage deduction, and those expenses were less than 18 cents per mile, then you may use the difference between actual expenses and 18 cents per mile.

112

Bank Franchise Subchapter S Corporation - Certain shareholders of small businesses corporations subject to bank franchise tax may be able to deduct the gain or add the loss of the S Corporation. Complete the worksheet below to determine the amount of your adjustment.

a. If your allocable share of the income or gain of the S Corporation was included in federal adjusted gross income, enter the amount here	$______
b. If your allocable share of the losses or deductions of the S Corporation was included in federal adjusted gross income, enter the amount here	$______
c. Enter the value of any distributions paid or distributed to you by the S Corporation to the extent that such distributions were excluded from federal adjusted gross income..	$______
d. Add Line b and Line c..	$______
e. Subtract Line d from Line a. This is your net deduction amount. If this amount is negative, you must enter the amount on Schedule 763 ADJ, Line 8a and use brackets to indicate a loss...	$______

113

Income from Dealer Disposition of Property - Allows an adjustment for certain income from dealer dispositions of property made on or after January 1, 2009. In the year of disposition the adjustment will be a deduction for gain attributable to installment payments to be made in future taxable years provided that (i) the gain arises from an installment sale for which federal law does not permit the dealer to elect installment reporting of income, and (ii) the dealer elects installment treatment of the income for Virginia purposes on or before the due date prescribed by law for filing the taxpayer's income tax return. In subsequent taxable years the adjustment will be an addition for gain attributable to any payments made during the taxable year with respect to the disposition. Each disposition must be tracked separately for purposes of this adjustment.

114

Prepaid Funeral, Medical, and Dental Insurance Premiums - You may be allowed a deduction of payments for (i) a prepaid funeral insurance policy that covers you or (ii) medical or dental insurance premiums for any person for whom you may claim a deduction for such premiums under federal income tax laws. To qualify for this deduction, you must be age 66 or older with earned income of at least $20,000 for the taxable year and federal adjusted gross income not in excess of $30,000 for the taxable year. The deduction is not allowed for any portion of premiums for which you have been reimbursed, have claimed a deduction for federal income tax purposes, have claimed another Virginia income tax deduction or subtraction, or have claimed a federal income tax credit or any Virginia income tax credit.

199

Other - Attach an explanation for other deductions.

Line 9 - Total Deductions

Add Lines 8a through 8c and enter on Line 9 and on Form 763, Line 14.

COMPUTATION FOR TAX CREDIT FOR LOW- INCOME INDIVIDUALS OR VIRGINIA EARNED INCOME TAX CREDIT

You may be eligible to claim a Tax Credit for Low-Income Individuals if your family Virginia adjusted gross income (VAGI) is equal to or less than the federal poverty guidelines and you meet the Eligibility Requirements. You are eligible for the Virginia Earned Income Tax Credit if you claimed an Earned Income Tax Credit on your federal return. Claim the credit that benefits you the most. However, you cannot claim both credits. Please complete the entire section.

The tax credit for low-income or Virginia Earned Income Credit may NOT be claimed if you, your spouse, or any dependent claims any of the following:

Virginia National Guard subtraction (Subtraction Code 28);
Basic military pay subtraction (Subtraction Code 38);
Federal and state employees subtraction for earnings of $15,000 or less (Subtraction Code 39);
Exemption for blind taxpayers or taxpayers age 65 and over;
the Age Deduction; or
You are claimed as a dependent on another taxpayer's return.

To compute total annual family income you must compute the "Guideline Income" for each family member and add those amounts together.

Guideline Income is defined as federal adjusted gross income modified by the Virginia additions and qualifying Virginia subtractions that apply to full-year residents.

After the worksheet has been filled in for each person on your tax return, complete Schedule 763 ADJ, Lines 10-17.

If you and your spouse file separate returns, only one spouse may claim the Credit for Low-Income Individuals, but both may claim their proportionate share of the Virginia Earned Income Tax Credit.

Guideline Income Worksheet

The income, additions and subtractions entered on the worksheet must be shown for the entire taxable year.

11. Add Lines 5 through 10.

1. FAGI from the federal return..	$ _____
2. Interest earned on obligations of other states exempt from federal tax..	$ _____
3. Other additions to FAGI...	$ _____
4. Subtotal. Add Lines 1, 2 and 3..	$ _____
5. State income tax refund or overpayment credit reported on your federal return..	$ _____
6. Income (interest, dividends or gains) on U.S. obligations or securities exempt from state income tax, but not from federal tax...	$ _____
7. Social Security or equivalent Tier 1 Railroad Retirement Act benefits reported as taxable income on your federal return..	$ _____
8. Disability income reported as wages (or payments in lieu of wages) on your federal return...	$ _____
9. Unemployment benefits included in FAGI...	$ _____
10. Other subtractions from FAGI..	$ _____
11. Add Lines 5 through 10...	$ _____
12. Guideline Income. Subtract Line 11 from Line 4..	$ _____

Line 10 - Compute Your Total Guideline Income

If more room is needed, attach a schedule with the name, SSN and Guideline Income for each additional dependent.

Your Information

Enter your name, social security number and Guideline Income. Filing Statuses 2, 3 and 4 must also complete spouse information.

Your Spouse's Information

Enter your spouse's name, social security number and Guideline Income.

All married taxpayers, regardless of filing jointly or separately, must complete this line.

Dependent(s) Information

Enter the name and social security number for each dependent claimed as an exemption on your return and, if any of your dependents had income, enter the Guideline Income for each dependent.

For Filing Status 3 (Married Filing Separately), also enter the name and social security number of your dependents not claimed as an exemption on your return and, if any of the dependents had income, enter the Guideline Income for each dependent.

Enter Total Family Guideline Income

Total the Guideline Income Worksheet for each family member (each exemption reported and from any additional schedule attached).

Line 11 - Enter Total Number of Exemptions Listed on Line 10 and on any Attached Schedule.

Enter the total number of exemptions listed on Line 10 and on any attached schedule.

Determine Eligibility for Credit for Low-Income Individuals - Using the number on Line 11 as Eligible Exemptions, compare the dollar amount on Line 10 to the Poverty Guideline below. If Line 10 amount is greater than the Poverty Guideline amount, you do not qualify for the Credit for Low-Income Individuals, Continue to Line 14.

Line 12 - Exemptions

If you are eligible based on the table above, enter the number of personal and dependent exemptions from Form 763. Do not include exemptions for age 65 or older and blind.

Line 13 - Multiply

Multiply the number of exemptions reported on Line 12 by $300. If you do not qualify for the Tax Credit for Low-Income Individuals but claimed an Earned Income Tax Credit on your federal return, enter $0 on Line 13 and proceed to Line 14.

Line 14 - Earned Income Tax Credit claimed on your federal return

Enter the amount of Earned Income Tax Credit claimed on your federal return. If you did not claim an Earned Income Tax Credit on your federal return, enter $0.

When a taxpayer using the married filing separately status computes the Virginia Earned Income Tax Credit, the taxpayer must first determine his proportion of the earned income that was used to qualify for the federal Earned Income Tax Credit. That proportion must then be multiplied by the total Virginia Earned Income Tax Credit, which is 20% of the federal Earned Income Tax Credit. The spouse may then claim his proportional share of the credit on his separate return.

Line 15

Multiply Line 14 by 20% (.20).

Line 16

Enter the greater of Line 13 or Line 15.

Line 17 - Credit

Compare the amount of tax on Form 763, Line 19, to the amount on Schedule 763 ADJ, Line 16. Enter the lower amount on Line 17. This is your Tax Credit for Low-Income Individuals. Also, enter this amount on Form 763, Line 24.

The Credit for Low-Income Individuals is a nonrefundable credit. A nonrefundable credit cannot exceed your tax liability. If you claim any credits on Form 763, Line 25 or Line 26, in addition to the Credit for Low-Income Individuals, the sum of all nonrefundable credit claimed cannot exceed your tax liability on Line 19 of Form 763.

Many low-income individuals who work and have earned income under $52,427 may also qualify for up to $6,143 in federal Earned Income Credit when filing their federal tax return! See your federal instructions or call 1-800-829-3676 to order Pub 596.

ADDITION TO TAX, PENALTY AND INTEREST

Addition to Tax for Underpayment of Tax

Even if your return results in a refund, you may owe an "addition to tax" for underpaying your withholding or estimated tax. Virginia law requires that you pay your income tax in timely installments throughout the year by having income tax withheld or making payments of estimated tax. If you do not pay at least 90% of your tax in this manner, you may be charged an addition to tax.

There are 4 (quarterly) installment periods for determining whether you underpaid your tax for the year. If your taxable year is from January 1 through December 31, your quarterly payments are due May 1, June 15, September 15, and January 15 (of the following year). Underpayments are determined as of each installment due date, so an overpayment in one quarter cannot cancel out an underpayment for a previous quarter. The addition to tax does not apply if each payment is made on time and:

the total tax paid through withholding and timely estimated tax payments is at least 90% (66 2/3% for farmers, fishermen or merchant seamen) of the current year's tax liability (after nonrefundable credits) or 100% of last year's tax liability (after nonrefundable credits);
the sum of the quarterly underpayments for the year is $150 or less; or
you meet one of the exceptions computed on Form 760C or Form 760F. Attach Form 760C or 760F showing the computation.

Line 18 - Addition To Tax

Enter the amount of the addition to tax computed on Form 760C (for individuals, estates and trusts) or Form 760F (for farmers, fishermen or merchant seamen). If you underpaid your estimated income tax or had insufficient income tax withheld for the taxable year, you may owe the "addition to tax" computed on Form 760C or Form 760F.

Line 19 - Penalty

If you file your return after May 1, 2015, you may owe either a late filing penalty or an extension penalty.

Late Filing Penalty - If you file your return more than 6 months after the due date, no extension provisions apply, and you must compute a late filing penalty of 30% of the tax due with your return.

Extension Penalty - If you file your return by the extended due date and the tax due is greater than ten percent of your total tax liability, you will owe an extension penalty. The penalty is 2% per month or part of a month from the original due date of the return until the date of filing. The extension penalty cannot exceed 12% of the tax due.

Late Payment Penalty - If you file your return before the due date or within 6 months after the due date, but do not pay the tax due at the time of filing, the unpaid balance will be subject to a late payment penalty of 6% per month from the date of filing through the date of payment, up to a maximum of 30%. The late payment penalty will be assessed in addition to any extension penalty that may apply. The automatic extension provisions apply only to returns that are filed within six months from the due date. If you file your return more than six months after the due date, a late filing penalty of 30% will apply to the balance of tax due with your return.

NOTE: If you file your return after the extended due date, your extension will be void and you will owe the late filing penalty. If you file your return by the extended due date, but do not pay the tax in full, a late payment penalty will accrue on the balance of tax due. Interest accrues on any balance of tax owed with a return filed on extension, regardless of whether the balance exceeds 10% of the tax.

Line 20 - Interest

If you filed a tax due return after the filing date, even if you had an extension, you are liable for interest on the tax due amount on Form 763, Line 29, from the due date to the date filed or postmarked. To obtain the daily interest factor, please call 804-367-8031 or contact your locality.

Line 21 - Addition to Tax, Penalty and Interest

Add Lines 18 through 20. Enter here and on Form 763, Line 34.

Instructions for Schedule VAC

Section I - Virginia College Savings PlanSM (Virginia529SM) Contributions

You may contribute all or part of your income tax refund to one or more existing Virginia529 accounts by completing Schedule VAC. Any contribution(s) made will be deemed a contribution to your account(s) for the 2015 taxable year. Virginia529 is a 529 college savings plan that offers flexible, affordable, tax- advantaged savings for qualified higher education expenses through its four programs: Virginia529 prePAID, Virginia529 inVEST, CollegeAmerica, and CollegeWealth. For information on establishing accounts, visit Virginia529.com. You are not required to be the owner of record for an account in order to direct a contribution of all or part of your income tax refund.

When you specify a Virginia529 contribution amount on Schedule VAC, you authorize the Department to transfer payment and related information to Virginia529 to facilitate crediting contributions to the specified account(s) pursuant to their operating procedures. The information that will be exchanged is identified below:

The contribution amounts and the program information contained on Schedule VAC.
The taxpayer's name, Social Security number or tax identification number, address, and telephone number. Note: Information for both spouses will be provided if a joint return is filed.

For purposes of determining interest on an overpayment or refund, no interest will accrue after the Department transfers the payment to Virginia529. If Virginia529 is unable to match a contribution to an existing Virginia529 account, they shall contact the taxpayer and attempt to resolve the contribution and, if all efforts fail, Virginia529 will return the refund contribution to the taxpayer at the address on the return.

Section I, Part A

Enter the overpayment amount computed on your return less the amount credited to estimated tax for next year.

Section I, Part B

For each contribution, provide the Program Type Code (see codes below), beneficiary's last name, and account number. In addition, provide the routing number if you are making a contribution to a CollegeAmerica account. Contact your financial advisor to obtain the proper account number and routing number for a CollegeAmerica account. For contributions to Virginia529 prePAID, Virginia529 inVEST, and CollegeWealth..accounts, use your Virginia529 account number for each.

Program Type Codes:

1 = Virginia529 inVEST

2 = Virginia529 prePAID

3 = CollegeWealth

4 = CollegeAmerica

If contributing to more than 5 accounts, use the supplemental schedule, Schedule VACS, to provide the information for additional accounts.

Section II - Other Voluntary Contributions

Complete this section to contribute to one or more other voluntary contribution organizations listed in the income tax instructions.

For information on these organizations, see Page 26.

Part A

Line 1 Enter the overpayment amount computed on your return less the amount credited to estimated tax for next year and the amount of Virginia529 contributions from Part I.

Part B - Voluntary Contributions from your refund

Lines 2 - 4 You may voluntarily donate all or part of your tax refund to one or more qualifying organizations. Enter the contribution code(s) and amount(s) you are donating in the boxes. If you want to donate to more than 3 organizations, enter "00" and the total amount donated to the organizations on Line 2. Attach a schedule showing the organization code, name and amount donated to each.

60	Virginia Nongame & Endangered Wildlife Program
61	Democratic Political Party
62	Republican Political Party
63	U.S. Olympic Committee
64	Virginia Housing Program
65	Department for Aging and Rehabilitative Services (Elderly & Disabled Transportation Fund)
66	Community Policing Fund
67	Virginia Arts Foundation
68	Open Space Recreation & Conservation Fund
76	Historic Resources Fund
78	Children of America Finding Hope, Inc.
82	Virginia War Memorial Educational Foundation & National D-Day Memorial Foundation
84	Virginia Federation of Humane Societies
85	Virginia Tuition Assistance Grant Fund
86	Spay and Neuter Fund
88	Virginia Cancer Centers
90	Martin Luther King, Jr. Living History andPublic Policy Center
93	Celebrating Special Children, Inc.

Lines 5 - 7 Use this section if you wish to contribute to one or more Library Foundations. If you want to donate to more than 3 organizations, enter code "999999" and the total amount donated to the organizations on Line 5. Attach a schedule showing the organization code, name and amount donated to each.

Part C Voluntary Contributions to be made from your refund OR tax payment

Lines 8 - 10 You may make a payment to the following organizations even if you owe a tax balance or if you wish to donate more than your expected refund.

If you want to donate to more than 3 organizations, enter code "00" and the total amount donated to the organizations on Line 8. Attach a schedule showing the organization code, name and amount donated to each.

71	Chesapeake Bay Restoration Fund
72	Family & Children's Trust Fund (FACT)
73	Virginia's State Forests Fund
74	Virginia's Uninsured Medical Catastrophe Fund
81	Home Energy Assistance Fund
92	Virginia Military Family Relief Fund (MFRF)

Lines 11 - 13 You may contribute to Public School Foundations even if you owe a tax balance or if you wish to donate more than your expected refund. If you want to donate to more than 3 organizations, enter code "999999" and the total amount donated to the organizations on Line 11. Attach a schedule showing the organization code, name and amount donated to each.

Part D, Line 14 Total Voluntary Contributions

Enter the total of Lines 2 - 13. Enter this amount on Line 33 of Form 760.

Donate to the General Fund by writing a check to the State Treasurer and designating it as a donation to the Commonwealth's General Fund. You must attach your payment to Form GFD. Visit www.tax.virginia.gov or call (804) 367-8031 to obtain this form.

You can make a contribution directly to any of the organizations listed above. For more information about these groups, including how you can make a contribution.

LINE INSTRUCTIONS FOR SCHEDULE OSC

CREDIT FOR TAX PAID TO ANOTHER STATE

Arizona
District of Columbia
California
Oregon

If you are a resident of one of the above states and have Virginia Source income as a "nonresident" and the income is taxed by both Virginia and the other state, you are eligible for this credit.

Attach a complete copy of the state tax return filed in the state for which you claim the credit. Copies of Forms W-2, W-2G, 1099 or VK-1 are not sufficient to verify payment of the tax to the other state.

Line 1 - Filing Status. Enter the number listed below to identify the filing status claimed on the other state's tax return.

Single
Married Filing Jointly
Married Filing Separately
Other

Line 2 - Claiming Credit. Enter the number listed below to identify the person claiming the credit.

Single
Married Filing Jointly
Married Filing Separately
Unified (Composite Nonresident)
Other

Line 3 - Qualifying Taxable Income. To be qualified, the income on this line must be included as taxable income on both the Virginia return and the other state's return. Enter the total taxable income from all of the following that apply to you to the extent that this income was taxed by the other state:

Earned or business income derived from sources within Virginia, which is subject to tax by Virginia as well a another state; and
Any gain, provided such gain is included in federal adjusted gross income, on the sale of a capital asset located in Virginia, which is subject to tax by Virginia as well as another state.

In some states, the tax is computed on total taxable income (from all sources) and then reduced by an allocation percentage. In these cases, you must multiply the total taxable income shown on the other state's return by the allocation percentage to determine the amount of income to enter on this line.

Line 4 - Virginia Taxable Income. Enter the amount of Virginia nonresident taxable income from Line 18 of Virginia Form 763. If you filed separately in the other state, but are filing jointly in Virginia, enter only the Virginia taxable income attributable to the filer whose income was taxed by the other state.

Line 5 - Qualifying Tax Liability. Enter the amount of tax liability reflected on the return you filed with the other state.

Line 6 - Identify the State. Enter the 2 character postal abbreviation for the other state.

Line 7 - Virginia Income Tax. Enter the amount of Virginia income tax from Line 19 of Virginia Form 763. If you filed jointly in the other state, but are filing separately in Virginia, enter the Virginia income tax due on the amount of Virginia Taxable Income reported on Line 19. Use the tax tables or the tax rate schedule to determine the amount of tax.

Line 8 - Income Percentage. Divide Line 4, Virginia Taxable Income by Line 3, Qualifying Taxable Income. Compute the percentage to one decimal place. The income percentage cannot exceed 100%.

Line 9 - Virginia Ratio. Multiply Line 5 the amount of Qualifying Tax Liability by Line 8 the Income Percentage.

Line 10 - Credit. Enter the lesser of Line 7 or Line 9 on Line 10. Enter the total credit claimed on Line 25 of Form 763.

If claiming more than one credit, continue to Line 11 of Schedule OSC and enter the total of all credits for taxes paid to other states on Line 21 and on Form 763, Line 25.

Note: The sum of all nonrefundable credits claimed cannot exceed your tax liability as shown on Line 19 of Form 763. Nonrefundable credits include the Tax Credit for Low-Income and Credit for Tax Paid to Another State.