Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department Of Taxation
Chapter 110. Individual Income Tax
12/2/2020

23VAC10-110-130. Exemptions and exclusions.

A. Generally. No tax is imposed upon any individual whose Virginia adjusted gross income, as defined in subsection B, for the taxable year is less than $3,000; nor is any tax imposed upon any individual and spouse whose combined Virginia adjusted gross income is less than $3,000. Persons who are not subject to the tax are not required to file a return; however, if any state income tax has been withheld, a return must be filed to obtain a refund.

B. Virginia adjusted gross income, defined.

1. Generally. As used in this regulation, "Virginia adjusted gross income" means FAGI for the taxable year plus the additions set forth in § 58.1-322(B) of the Code of Virginia, and less the subtractions set forth in § 58.1-322(C) of the Code of Virginia and the additional $400 deduction for taxpayers age 65 and over.

Example: A taxpayer, age 67, has FAGI for taxable year 1983 of $3,200 ($2,000 in wage income and $1,200 in interest and dividends). The taxpayer had an additional $150 in interest which is exempt from federal but not exempt from state tax. Since the taxpayer is over 65 years of age, he qualifies for the additional $400 deduction. Therefore, his Virginia adjusted gross income is $2,950 ($3,200 (FAGI) plus $150 (taxable interest) less $400 (additional deduction)). Virginia adjusted gross income includes both earned and unearned income. The itemized and standard deductions, child care deduction and personal exemption amounts, except as noted above, may not be subtracted from FAGI in computing Virginia adjusted gross income.

2. Part-year residents. The Virginia adjusted gross income of a part-year resident is computed only with respect to income derived during his period of residence in Virginia determined in the manner prescribed in 23VAC10-110-40 B.

3. Nonresidents. The Virginia adjusted gross income of a nonresident is computed as though such person had been a resident of Virginia during the full taxable year.

C. Military personnel.

1. Military pay. Armed forces personnel who are not domiciliary residents of Virginia and who maintain no place of abode within the State are not subject to Virginia income tax on compensation received from armed forces service. However, a member of the armed forces who is a domiciliary resident of Virginia is subject to tax on his income in the same manner as any other resident.

2. Other income. Pursuant to the Soldiers' and Sailors' Relief Act (50 USC 574), compensation for military or naval service of any person residing in Virginia solely by reason of compliance with military or naval orders is not subject to income taxation in Virginia, unless such person is a domiciliary resident of this state. Similarly, military personnel who are domiciliary residents of Virginia do not attain a domicile elsewhere solely by virtue of their presence without the state in compliance with military or naval orders. Therefore, a Virginia resident who enters military service is subject to Virginia income tax on all of his taxable income regardless of where the resident is stationed.

However, members of the armed forces who derive income from Virginia sources, excluding compensation for military or naval service, are subject to Virginia tax on such income in the same manner as any nonresident. For example, the compensation derived by an armed forces member from a part-time job is subject to Virginia income tax on such compensation. Similarly a member of the armed forces may subject himself to taxation in Virginia by acquiring a new legal domicile herein.

3. Spouse of armed forces member. The residency status of a spouse of a member of the armed forces, who is not a member of the armed forces, shall be determined without regard to this section.

(See 23VAC10-110-30 B 3 for Domicile Generally. See 23VAC10-110-190 B for allocation of deductions and exemptions between resident and nonresident spouses.)

Statutory Authority

§§ 58.1-203 and 58.1-321 of the Code of Virginia.

Historical Notes

Derived from VR630-2-321; adopted September 19, 1984; revised eff. January 1, 1985 with retroactive effect according to Va. Code § 58-48.6 (recodified as Section 58.1-203).

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