Document Number
Tax Type
Individual Income Tax
Nonfiler, Domiciliary Resident,
Out of State Tax Credits
Date Issued

October 17, 2017

Re:     § 58.1-1821 Application:  Individual Income Tax

Dear *****:

This will respond to your letter in which you seek correction of the individual income tax assessment issued to your client, ***** (the “Taxpayer”) for the taxable year ended December 31, 2013.


The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia individual income tax return for the 2013 taxable year.  A review of the Department's records showed that the Taxpayer had not filed a return.  The Department requested additional information from the Taxpayer in order to determine if her income was taxable in Virginia.  When a response was not received, the Department issued an assessment.  The Taxpayer appeals, contending that even if she was a Virginia resident in 2013, she should be permitted to claim a credit for income tax paid to New York.


Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Code § 58.1-302.  The domiciliary residence of a person means the permanent place of residence of a taxpayer and the place to which he intends to return even though he may reside elsewhere.  For a person to change domiciliary residency to another state or country, that person must intend to abandon his Virginia domicile with no intention of returning to Virginia.  Concurrently, that person must acquire a new domicile where that person is physically present with the intention to remain there permanently or indefinitely.  An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia.  A Virginia domiciliary resident, therefore, working in other parts of the country or in another country who has not abandoned his Virginia residency continues to be subject to Virginia taxation.  Additionally, a person who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days is also subject to Virginia taxation.

Virginia Code § 58.1-332 A allows Virginia residents a credit on their Virginia return for income taxes paid to another state provided the income is either earned or business income. Virginia law does not necessarily allow a taxpayer to claim a credit for the total amount of tax paid to another state.  Rather, the credit is limited to the lesser of the amount of tax actually paid to the other state or the amount of Virginia income tax actually imposed on the taxpayer on the income earned or derived in the other state.  See Public Document (P.D.) 97-301 (7/7/1997).

Similar to Virginia, New York defines a resident to include an individual who maintains a place of abode within its jurisdiction for an aggregate of 183 days or more during a taxable year.  See N.Y. Tax Law § 605(b)(1)(B).  The Taxpayer represents that she was an actual resident of New York during 2013 and had wage income sourced to New York.  Without conceding that she was a domiciliary resident of Virginia, the Taxpayer contends that even if she was a domiciliary resident of Virginia, the Department should allow a credit for income tax she paid to New York on such income.

When a taxpayer is a domiciliary resident of Virginia and an actual resident of another state, Va. Code § 58.1-332 does not prohibit taxpayers from claiming a credit for income tax paid to the other state on the Virginia return.  See also P.D. 16-41 (3/31/2016).  The credit, however, is subject to certain limitations described in Va. Code § 58.1-332, including that the income upon which the credit may be claimed must be “derived from sources outside the Commonwealth” and otherwise subject to Virginia income tax.

The New York return provided indicates that the Taxpayer paid income tax to New York on her wage income.  The Taxpayer, therefore, would have been allowed to claim the credit if she had filed a Virginia income tax return as a domiciliary resident of Virginia.

Accordingly, the credit for income tax paid to New York will be allowed in accordance with Virginia statutes.  The assessment at issue was made based on the best information available to the Department pursuant to Va. Code § 58.1-111. The Taxpayer, however, may have information that better represents her Virginia income tax liability for the taxable year at issue.  Therefore, she should file a 2013 Virginia income tax return and claim credit for income tax paid to New York.  The return should be submitted within 30 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *****.  The return will be reviewed and processed, and the assessment will be adjusted as warranted. If the return is not received within the allotted time, the assessment will be adjusted based on the best information available.

The Code of Virginia sections and public documents cited are available on-line at in the Laws, Rules & Decisions section of the Department's web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.



Craig M. Burns
Tax Commissioner





Last Updated 10/27/2017 13:11