Tax Type
Individual Income Tax
Description
Deductions different on state and federal returns
Topic
Taxable Income
Date Issued
09-04-1985
September 4, 1985
Re: §58.1-1821 Application/Individual Income Tax
Dear ****
This will reply to your letter of July 1, 1985 requesting information on the correctness of an assessment issued by the department with reference to your 1982 individual income tax return.
Facts
It was determined that taxpayer claimed a dependent exemption on their Virginia return which was not claimed on their federal return. Taxpayers state that while their nineteen year old dependent son was an allowable exemption for federal income tax purposes, it was not to their advantage to claim him on their federal return. Taxpayers contend that they should be able to claim their son on their Virginia return since the exemption was "allowable" for federal purposes.
Determination
§58.1-322(D)(2) of the Virginia Code provides that "In computing Virginia taxable income there shall be deducted from Federal adjusted gross income...[a] deduction in the amount of $600 for each personal exemption allowable to the taxpayer for federal income tax purposes." However, this provision is interpreted by §63O-2-322(D)(4) of the Department's Individual Income Tax Regulations to mean that "There shall be deducted from federal adjusted gross income $600 for each personal exemption allowed to the taxpayer for federal income tax purposes." (Emphasis added)
The department has consistently maintained that since Virginia taxable income cannot be determined without reference to federal adjusted gross income, and any deductions or exemptions taken in computing federal income tax, that only such deductions or exemptions claimed for federal income tax purposes can be claimed for Virginia income tax purposes.
Therefore, I am unpersuaded by Taxpayers' argument in this case that they should be able to claim their son on their Virginia income tax return even if they did not so claim him on their federal return.
In accordance with all of the above, I find no basis for adjustment of the assessment in this case, the full amount of which is hereby due and payable.
Sincerely,
W. H. Forst
Tax Commissioner
Re: §58.1-1821 Application/Individual Income Tax
Dear ****
This will reply to your letter of July 1, 1985 requesting information on the correctness of an assessment issued by the department with reference to your 1982 individual income tax return.
Facts
It was determined that taxpayer claimed a dependent exemption on their Virginia return which was not claimed on their federal return. Taxpayers state that while their nineteen year old dependent son was an allowable exemption for federal income tax purposes, it was not to their advantage to claim him on their federal return. Taxpayers contend that they should be able to claim their son on their Virginia return since the exemption was "allowable" for federal purposes.
Determination
§58.1-322(D)(2) of the Virginia Code provides that "In computing Virginia taxable income there shall be deducted from Federal adjusted gross income...[a] deduction in the amount of $600 for each personal exemption allowable to the taxpayer for federal income tax purposes." However, this provision is interpreted by §63O-2-322(D)(4) of the Department's Individual Income Tax Regulations to mean that "There shall be deducted from federal adjusted gross income $600 for each personal exemption allowed to the taxpayer for federal income tax purposes." (Emphasis added)
The department has consistently maintained that since Virginia taxable income cannot be determined without reference to federal adjusted gross income, and any deductions or exemptions taken in computing federal income tax, that only such deductions or exemptions claimed for federal income tax purposes can be claimed for Virginia income tax purposes.
Therefore, I am unpersuaded by Taxpayers' argument in this case that they should be able to claim their son on their Virginia income tax return even if they did not so claim him on their federal return.
In accordance with all of the above, I find no basis for adjustment of the assessment in this case, the full amount of which is hereby due and payable.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner