Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
6/27/2022

23VAC10-110-320. Individual refunds; crediting overpayment against estimated tax.

A. Refund of overpayments, generally. Any individual who overpays any tax, addition to the tax, interest or penalty imposed upon him shall be refunded the amount of such overpayment. A refund of overpayment shall be made for the following reasons: (i) excessive withholding; (ii) overestimating and overpaying estimated tax; (iii) taxpayer error; (iv) erroneous assessment of tax.

No refund for any overpayment of less than $1.00 shall be made except on written application of the taxpayer. The filing of a return does not constitute such a written application.

B. Credit of overpayment against past due income tax. Any individual who is entitled to a refund of individual income tax pursuant to this section, § 58.1-309 of the Code of Virginia, or an administrative appeal and who owes the state any amount of past due income tax may request that the amount of such refund be credited against such past due balance. (See also §§ 58.1-520 et seq. of the Code of Virginia, Setoff Debt Collection Act, and accompanying regulations regarding the setoff of a debtor's income tax refund against other outstanding liabilities.)

C. Credit against estimated tax liability.

1. Individuals. Any individual who files an income tax return indicating that his tax for the taxable year has been overpaid, either as a result of excessive withholding or overestimating and overpaying estimated tax, may designate that such overpayment be credited against his estimated tax liability for the next succeeding taxable year. Such designation must be made in the space provided on the return. Any overpayment so designated is subject to correction for error.

2. Husband and wife. Any overpayment by a husband or wife filing separate returns or separately on a combined return may be credited to the estimated tax liability for the next succeeding taxable year of either spouse at the election of the spouse to whom the overpayment is attributable. Similarly the spouse to whom such overpayment is attributable may elect to have the overpayment credited to the husband and wife's joint tax liability for the next succeeding taxable year.

D. Statute of limitations. No refund of any overpayment shall be made except upon discovery by the department or written application of the taxpayer within three years of the due date of the return for such taxable year or within sixty days from the final determination of any change or correction in the taxpayer's liability for federal income tax, whichever is later.

E. Refund not absolution of liability. The fact that an income tax refund for any taxable year is made to an individual does not relieve the individual of any liability which may exist for such taxable year. The department may make an assessment for any deficiency for a taxable year, within the applicable statutes of limitation, regardless of the fact that a refund may have been issued for such taxable year.

F. Interest on refunds. The payment of interest on refunds of overpayments shall be governed by the provisions of § 58.1-1833 of the Code of Virginia. Pursuant to § 58.1-1833 of the Code of Virginia, no interest shall accrue and be paid on the refund of a tax overpayment until sixty days after the payment of the tax or the due date of the return, whichever is later, and interest accrual shall end on a date determined by the department which will not precede the date of the refund check by more than 30 days. (See also 23VAC10-20-200 and 23VAC10-110-60.)

Statutory Authority

§§ 58.1-203 and 58.1-499 of the Code of Virginia.

Historical Notes

Derived from VR630-2-499; 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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