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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
11/21/2024

23VAC10-110-85. Net operating losses; filing status.

A. Generally. Taxpayers shall use the same filing status for Virginia purposes as they do for federal purposes. In cases where the taxpayers use a different filing status for federal purposes in the loss year than in the carryback or carryforward year, the federal provisions of Treasury Reg. § 1.172-7 shall be applicable.

B. When taxpayers elect a different Virginia filing status. Taxpayers may elect a different Virginia filing status in the loss year than they elected in the carryback or carryforward year. Section 58.1-341 of the Code of Virginia allows Virginia taxpayers who file a joint federal income tax return to file either a joint Virginia income tax return, separate Virginia income tax returns or to file separately on a combined return. (See 23VAC10-110-240 C.)

1. When taxpayers elect on their Virginia return to file married, filing jointly in the loss year and to file separately or to file married filing separately on a combined return in the carryback or carryforward year, the loss and all Virginia loss year modifications shall first be claimed by the spouse who would have been entitled to claim the loss if separate returns or married filing separately on a combined return had been chosen in the loss year. If the amount of loss exceeds the income of that spouse, then the taxpayers may exercise their election of changing their filing status to married filing jointly in the carryback or carryforward year.

2. When taxpayers elect to file separate Virginia returns or elect to file separately on a combined return in the loss year and file married, filing jointly in the carryback or carryforward year, the loss and all Virginia loss year modifications attributable to both spouses for the loss year shall follow the loss to the carryback or carryforward year return.

Statutory Authority

§§ 58.1-203 and 58.1-311 of the Code of Virginia.

Historical Notes

Derived from VR630-2-311.1 § 6, eff. taxable years beginning on and after January 1, 1985.

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