March 17, 2017
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of the individual income tax assessment issued to ***** (the “Taxpayers”) for the taxable year ended December 31, 2015.
FACTS
The Taxpayers, a husband and wife, were both federal employees during the 2015 taxable year. The husband's total salary was more than $15,000 and the wife's total salary was less than $15,000 during 2015. The Taxpayers claimed a subtraction for the amount of the wife's salary income pursuant to Virginia Code § 58.1-322 C 24.
The Department disallowed the subtraction because the Taxpayers' combined salaries were more than $15,000. The Taxpayers appeal, contending the wife's salary met the requirements for the subtraction.
DETERMINATION
Virginia Code § 58.1-322 C 24 allows a subtraction for “. . . the first $15,000 of salary for each federal and state employee whose total annual salary from all employment for the taxable year is $15,000 or less.” [Emphasis added.]
Virginia follows the federal classification of employees for purposes of the subtraction allowed by Va. Code § 58.1-322 C 24. See Public Document (P.D.) 09-17 (2/4/2009). According to the statutory language of the subtraction, each individual federal or state employee whose entire annual salary is less than $15,000 is entitled to claim the subtraction. Married individuals who are federal and/or state employees are not required to combine their salaries for purposes of Va. Code § 58.1-322 C 24.
The wife was a federal employee under Title 5 U.S.C. § 2105(a). Because she earned less than $15,000 per year, the Taxpayers were entitled to claim a subtraction for her salary. Accordingly, the assessment for the 2015 taxable year will be abated.
The Code of Virginia section and public document cited are available on-line at www.tax.virginia.gov 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 *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1006.B