Registration and Filing Requirements
How do I register for a withholding tax account?
Where can I get withholding tax returns?
Beginning July 2013, withholding tax returns and withholding tax payments must be filed and paid electronically using one of our three online systems:
- eForms - no sign-up, easy filing and some calculations performed
- Business iFile - file/pay one account and view up to 14 months of history
- Web Upload - suitable for submitting one or multiple returns in a single file
How do I know which return to use?
Virginia Tax assigns a filing status, based on registration information or your actual payment record. Quarterly, monthly, and seasonal filers use form VA-5; Semi-weekly filers use Forms VA-15 and VA-16.
I have been filing monthly returns, but my liability has dropped. Can I switch to filing on a quarterly basis?
No, you cannot change your filing status without authorization from Virginia Tax. Virginia Tax will monitor your account each year and make any necessary changes. You will receive a notice of any change that is made, as well as appropriate returns for your filing frequency, before the change becomes effective. In the meantime, you should continue to file monthly returns.
Is there a penalty for filing a withholding tax return late when there is no tax due?
Yes. Virginia law imposes a minimum late filing penalty of $10, even if there is no tax due with the return.
Am I required to file copies of federal Form 1099 with my annual summary?
Virginia Tax does not require the filing of Form 1099, unless the form reflects Virginia income tax withheld. Generally, the only form in the 1099 series that will reflect Virginia income tax withheld is Form 1099-R.
Liability for Withholding
My corporation is a nonprofit tax-exempt organization under federal law. Do we have to withhold Virginia income tax for our employees?
Yes. The IRS tax exemption pertains to corporation income tax only. As an employer, you are still required to withhold Virginia income tax from your employees' wages.
My company has sales representatives who work out of their homes in Virginia. Since the company doesn't have an office of its own in Virginia, do we have to withhold for these employees?
Yes. Since your company does business in Virginia, and your employees are actually performing services in the state, you meet the definition of a Virginia employer.
I have a construction business, and I subcontract most of the carpentry work to independent contractors. The IRS has determined that I am actually an employer under their rules. Does this apply to Virginia, too?
Yes. As long as you are considered to have an employer-employee relationship with your subcontractors under federal regulations, you are an employer for Virginia purposes.
I'm planning to open a beauty salon. Each operator will rent shop space from me and I will collect commissions from them. Will the operators be considered employees or independent contractors?
Virginia law conforms to the provisions of federal law with respect to whether an employer-employee relationship exists between parties. Therefore, you should contact the IRS for a determination. If the IRS classifies you as an employer, you will also be considered an employer for Virginia purposes.
My company is based in North Carolina, and we send North Carolina resident employees into Virginia to do work in connection with contracts we have with Virginia clients. We do not have an office in Virginia. Are we required to withhold Virginia income tax for these employees?
Yes. Because your company is paying wages to employees for services performed in Virginia, you must withhold Virginia income tax from those wages.
My company has its only office in Maryland, and conducts all of its business there. Several of our employees are Virginia residents who commute to work on a daily basis. Are we required to withhold Virginia income tax from their wages?
No. Because your company is not paying wages to employees for services performed in Virginia, you are not required to withhold Virginia tax. If you would like to withhold the tax as a courtesy to your employees, you may register for a Virginia withholding tax account online or by submitting a Form R-1 Registration Application.
I am required under federal law to report certain travel expense reimbursements as taxable wages paid to my employees. Should these amounts also be reported as taxable wages for Virginia? If so, should I withhold Virginia tax on these payments?
Yes. Any payments reportable for federal purposes are also reportable for Virginia purposes. Since these payments are subject to federal withholding, Virginia income tax must also be withheld.
Under federal law, I am allowed to exclude group life insurance premium payments from taxable wages. Does Virginia also allow these amounts to be excluded?
Yes. Since Virginia law conforms to the federal definition of taxable wages, any amounts excluded for federal purposes are also excluded for Virginia purposes.
If each of my employees has completed federal Form W-4, may I use that information, rather than having them complete a separate Virginia Form VA-4?
No. Virginia law differs from federal law with respect to the computation of exemptions for withholding tax. Therefore, each employee must complete Form VA-4.
I am allowed to claim 12 exemptions for federal purposes, based on my itemized deductions. Why can't I do the same for Virginia?
Virginia law currently makes no provision for claiming exemptions other than those provided on Form VA-4, unless you have received written authorization from Virginia Tax. If your Virginia income tax is being significantly overwithheld, you may request authorization to claim additional exemptions by writing to the Tax Commissioner at Post Office Box 2475, Richmond, VA 23218-2475.