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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 112. Declaration of Estimated Income Tax by Individuals
11/23/2024

23VAC10-112-45. Failure of individual to pay estimated tax; short taxable year; underpayment of estimated tax.

A. In any case in which the taxable year for which an underpayment of estimated tax exists is a short taxable year due to a change in annual accounting periods, in determining the tax (i) shown on the return for the preceding taxable year (for purposes of subdivision 1(a) of subsection D of § 58.1-492 of the Code of Virginia), (ii) based on the personal exemptions and rates for the current taxable year but otherwise on the basis of the facts shown on the return for the preceding taxable year, and the law applicable to such year (for purposes of subdivision 1(b) of subsection D of § 58.1-492 of the Code of Virginia), the tax will be reduced by multiplying it by the number of months in the short taxable year and dividing the resulting amount by 12.

B. If the taxable year for which an underpayment of estimated tax exists is a short taxable year due to a change in annual accounting periods, in annualizing the income for the months in the taxable year preceding an installment date, for purposes of subdivision 1(c) of subsection D of § 58.1-492 of the Code of Virginia, the personal exemptions allowed as deductions shall be prorated by multiplying such deduction by the ratio of months in the short taxable year to 12 months.

C. If "the preceding taxable year" referred to in subdivision 1(b) of subsection D of § 58.1-492 of the Code of Virginia was a short taxable year, for purposes of determining the applicability of the exception described in subdivision 1(b) of subsection D of § 58.1-492 of the Code of Virginia, the tax, computed on the basis of the facts shown on the return for the preceding year, shall be the tax computed in the manner described in 23VAC10-110-230. If the tax rates or the taxpayer's status with respect to personal exemptions for the taxable year in which the underpayment occurs differs from such rates or status applicable to the preceding taxable year, the tax determined in accordance with this subsection shall be recomputed to reflect the rates and status applicable to the year in which the underpayment occurs.

Statutory Authority

§§ 58.1-203 and 58.1-492 of the Code of Virginia.

Historical Notes

Derived from VR630-2-492 § 6; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989.

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