Administrative Code

Virginia Administrative Code
12/1/2022

Chapter 112. Declaration of Estimated Income Tax by Individuals

23VAC10-112-10. Definitions.

The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise:

"Commissioner" means the Tax Commissioner.

"Estimated tax" means the amount which an individual reasonably estimates to be the income tax due for the taxable year, less the amount estimated to be the sum of any credits allowable against the tax (including, but not limited to, amounts withheld under § 58.1-460 et seq. of the Code of Virginia).

"Taxable income" means an individual's federal adjusted gross income for the taxable year with the additions, subtractions, deductions and other modifications and adjustments set forth in § 58.1-322 of the Code of Virginia and regulations promulgated thereunder.

"Taxable year" means an individual's taxable year for federal income tax purposes.

"Virginia adjusted gross income" means federal adjusted gross income (FAGI) for the taxable year plus the additions set forth in subsection B of § 58.1-322 of the Code of Virginia, and less the subtractions set forth in subsection C of § 58.1-322 of the Code of Virginia and the additional deduction set forth under subdivision 2(b) of subsection D of § 58.1-322 of the Code of Virginia.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.1; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-20. Declarations of estimated tax; requirement of declaration.

A. Every resident and nonresident individual shall make a declaration of his estimated tax for every taxable year, if his estimated tax, as defined in 23VAC10-112-10, is greater than $150. This requirement of declaration is in effect throughout the entire taxable year.

B. A taxpayer is not required to file a declaration if:

1. His estimated tax is $150 or less; or

2. He is single and his expected Virginia adjusted gross income is less than $5,000; or

3. He is married and the combined expected Virginia adjusted gross income of the couple is less than $8,000; or

4. He is not required to file a Virginia income tax return pursuant to the provisions of § 58.1-342 of the Code of Virginia.

EXAMPLE 1: Taxpayer A is employed to render domestic service in the local chapter of a college fraternity. The wages he receives are not subject to withholding under subdivision 2 of § 58.1-460 of the Code of Virginia. His only other income consists of interest and dividend payments. His total Virginia adjusted gross income for the taxable year is expected to be less than $5,000. Because his estimated Virginia adjusted gross income will be less than the minimum amount specified under § 58.1-321 of the Code of Virginia subjecting him to taxation, he is not required to file a declaration.

EXAMPLE 2: Assume that Taxpayer A, in addition to his income above, also works in the local grocery store and taxes are withheld from his wages. His total Virginia adjusted gross income from both jobs exceeds $5,000 for the year. Therefore, he is subject to taxation and is required to file a return. If his estimated tax for the year exceeds his withholding and any other credits by more than $150, he must file a declaration of estimated tax.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 1; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-21. Declarations of estimated tax; contents of declaration.

In the declaration required under 23VAC10-112-20, the individual shall state:

1. The amount which he estimates as the amount of individual income tax for which he will be liable for the taxable year;

2. The amount, if any, which he estimates will be withheld from wages for the taxable year as required by § 58.1-460 et seq. of the Code of Virginia;

3. The excess of the amount estimated under subdivision 1 of this section over the amount estimated under subdivision 2 of this section shall be considered the estimated tax for the taxable year to be paid by the individual as hereinafter provided; and

4. Such other information as may be required by the Commissioner. Form 760ES is currently in use for this purpose.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 2; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-22. Declarations of estimated tax; joint declaration by husband and wife.

A husband and wife may file a joint declaration, in which case the liability with respect to the estimated tax shall be joint and several. A joint declaration may not be made: (i) if either the husband or the wife is a nonresident of Virginia unless both are required to file an individual income tax return, (ii) if they are separated under a decree of divorce or of separate maintenance, or (iii) if they have different taxable years. If a joint declaration is made but a joint return is not made for the taxable year, the estimated tax for such year may be treated as the estimated tax of either the husband or the wife, or may be divided between them as they mutually agree.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 3; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-23. Declarations of estimated tax; time for filing declaration.

A. A declaration of estimated tax of an individual other than a farmer or fisherman shall be filed on or before May 1 of the taxable year, except that if the requirements of 23VAC10-112-20 are met for the first time:

1. After April 15 and before June 2 of the taxable year, the declaration shall be filed on or before June 15, or

2. After June 1 and before September 2 of the taxable year, the declaration shall be filed on or before September 15, or

3. After September 1 of the taxable year, the declaration shall be filed on or before January 15 of the succeeding year.

B. If at least two-thirds of a self-employed individual's total estimated gross income for the taxable year is from farming (including oyster farming) or fishing, the declaration of estimated tax may be filed at any time on or before January 15 of the succeeding year, instead of the time otherwise prescribed. However, if the income tax return for the taxable year is filed on or before March 1 of the succeeding year and the total tax is paid at that time, the return will be considered a timely declaration and payment of the January 15 installment under the provisions of 23VAC10-112-25.

A person farming or fishing for a living whose services are legally subject to the will and control of an employer, whether paid by salary or commission, or in cash, fish or produce, is an employee and not a self-employed person. If there is no withholding the employee is subject to the requirements set forth in subsection A.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 §§ 4, 5; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-24. Declarations of estimated tax; amendments of declaration.

An individual may amend a declaration at any time throughout the year by increasing or decreasing the amount of installment payment noted on the payment-voucher form accompanying the payment.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 6; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-25. Declarations of estimated tax; return as declaration or payment.

If on or before March 1 of the succeeding taxable year an individual files his return for the taxable year for which the declaration is required, and pays the full amount of the tax shown to be due on the return:

1. Such return shall be considered as his declaration if no declaration was required to be filed during the taxable year, but is otherwise required to be filed on or before January 15.

2. Such return and payment shall be considered as the last installment of estimated tax which would otherwise have been payable on or before January 15.

Filing a return on or before March 1 of the succeeding taxable year or filing a declaration or payment of the last installment on January 15 will not relieve a taxpayer of liability for the addition to tax for the underpayment of any of the installments of estimated tax that were due on May 1, June 15 or September 15 of the taxable year.

EXAMPLE 1: Taxpayer A discovers on September 15, 1988, that his expected Virginia estimated tax for calendar year 1988 will exceed $150. Taxpayer is required to file his declaration by January 15, 1989, but by filing his 1988 income tax return on or before March 1, 1989, and paying in full his tax liability shown on the return, Taxpayer is deemed to have timely filed the declaration required by 23VAC10-112-23 A 3.

EXAMPLE 2: Taxpayer A makes the same discovery but on September 1, 1988. He must file his declaration on or before September 15, 1988. His second installment would be due January 15, 1989. (See 23VAC10-112-30 A 3). However, because he files his 1988 return on February 28, 1989, accompanied by payment in full of his 1988 liability, he is deemed to have timely made the filing/payment of his second installment.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 7; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-26. Declarations of estimated tax; fiscal year.

23VAC10-112-20 through 23VAC10-112-28 shall also apply to a taxable year other than a calendar year. In the case of a fiscal year: the 15th day of the fourth month shall be substituted for May 1; the 15th day of the sixth month shall be substituted for June 15; the 15th day of the ninth month shall be substituted for September 15 and the 15th day of the first month of the succeeding taxable year shall be substituted for January 15.

EXAMPLE: Taxpayer F is a fiscal year taxpayer whose taxable year ends on June 30. His income tax return is due on October 15 (15th day of the fourth month following the close of his taxable year). His estimated payments are due on October 15, December 15, March 15 and July 15 of the succeeding taxable year.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 8; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-27. Declarations of estimated tax; short taxable year; declaration requirement.

A separate declaration must be filed where a return is required for a period of less than 12 months, unless the short period is less than four months or the requirements to file are first met after the first day of the last month in the short taxable year. In the case of a decedent, no declaration need be filed after the date of death. The decedent's estate, however, may be liable to file a declaration of estimated tax.

For the purpose of determining whether a declaration must be filed for a short taxable period which results from a change in annual accounting period, the tax for the short period shall be placed on an annual basis by multiplying the amount thereof by 12 and dividing the result by the number of months in the short period.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 9; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-28. Declaration for individual under a disability.

The declaration of estimated tax for an individual who is unable to make a declaration by reason of any disability shall be made and filed by his guardian, committee, fiduciary or other person charged with the care of his person or property (other than a receiver in possession of only a part of his property), or by his duly authorized agent.

Statutory Authority

§§ 58.1-203 and 58.1-490 of the Code of Virginia.

Historical Notes

Derived from VR630-2-490.2 § 10; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989, but retroactive in effect for taxable years beginning on and after January 1, 1987.

23VAC10-112-30. Payments of estimated tax.

A. General. The estimated tax relating to the filed declaration shall be paid as follows:

1. If the declaration is filed on or before May 1 of the taxable year, the estimated tax shall be paid in four equal installments. The first installment shall be paid at the time the declaration is filed, and the second, third and fourth installments on the following June 15, September 15, and January 15, respectively.

2. If the declaration is filed after May 1 but on or before June 15 of the taxable year, and is not required to be filed on or before May 1 of the taxable year, the estimated tax shall be paid in three equal installments. The first installment shall be paid at the time the declaration is filed, and the second and third installments on the following September 15 and January 15, respectively.

3. If the declaration is filed after June 15 but on or before September 15 of the taxable year, and is not required to be filed on or before June 15 of the taxable year, the estimated tax shall be paid in two equal installments, the first at the time the declaration is filed, and the second on the following January 15.

4. If the declaration is filed after September 15 of the taxable year, and is not required to be filed on or before September 15 of the taxable year, the estimated tax shall be paid in full at the time the declaration is filed.

5. If the declaration is filed after the due date, including cases where an extension of time has been granted, subdivisions 2, 3 and 4 of this subsection shall not apply, and all installments of estimated tax which would have been due shall be paid at or before the time of filing, and the remaining installments shall be paid at the times at which, and in the amounts in which, they would have been payable if the declaration had been filed when due.

Example: Taxpayer B becomes obligated on April 1, 1983, to file a declaration of estimated tax, due on or before May 1, 1983, and is required to pay his estimated tax in four equal installments (by May 1, June 15, and September 15, 1983 and by January 15, 1984). In fact, he files the declaration on September 20, 1983, at which time he is delinquent in the payment of three installments of his estimated tax for taxable year 1983. Therefore, he must pay three-fourths of his estimated tax when he files his declaration September 20, 1983.

B. Farmers and fisherpersons. If a self-employed farmer or fisherperson referred to in 23VAC10-112-23 B makes a declaration of estimated tax after September 15 of the taxable year and on or before the following January 15, the estimated tax shall be paid in full at the time the declaration is filed.

C. Amendments of declaration. If any amendment of a declaration is filed, the remaining installments, if any, shall be ratably increased or decreased (as the case may be) to reflect any increase or decrease in the estimated tax by reason of such amendment. If any amendment is made after September 15 of the taxable year, any increase in the estimated tax by reason thereof shall be paid at the time of making such amendment.

Example: Taxpayer Z estimated his tax liability for taxable year 1982 to be $1,600, and timely filed his declaration and paid $400 on May 1, 1982. 0n June 1, 1982 he won a grocery store sweepstakes, which increased his 1982 estimated tax liability by $300 to $1,900. To absorb the estimated increase in tax liability, each of his three subsequent estimated tax installments on June 15 and September 15, 1982, and January 15, 1983, was increased to $500.

D. Application to short taxable year. In the case of a short taxable year of an individual for which a declaration is required to be filed the estimated tax shall be paid in equal installments, one at the time of filing the declaration, one on the 15th day of the sixth month of the taxable year and another on the 15th day of the ninth month of such year unless the short taxable year closed during or prior to such sixth or ninth month, and one on the 15th day of the first month of the succeeding taxable year. For example, if the short taxable year is the period of 10 months from January 1, 1982 to October 31, 1982, and the declaration is required to be filed on or before May 1, 1982, the estimated tax is payable in four equal installments, one on the date of filing the declaration, and one each on June 15, September 15, and November 15, 1982. If in such case the declaration is required to be filed after May 1 but on or before June 15, the tax will be payable in three equal installments, one on the date of filing the declaration, and one each on September 15, and November 15, 1982. The provisions of subdivision A 5 of this section, relating to payment of estimated tax in any case in which the declaration is filed after the due date, are equally applicable to the payment of the estimated tax for short taxable years.

In the case of a decedent, no payment of estimated tax need be filed after the date of death.

E. Fiscal year. This section shall apply to a taxable year other than a calendar year by substituting the corresponding fiscal year months. For example, for a fiscal year of July 1 through June 30, if the declaration is filed on or before November 1, the estimated tax shall be paid in four equal installments, the first when the declaration is filed and the second, third and fourth installments on the following December 15, March 15 and July 15, respectively.

F. Installments or entire estimated tax paid in advance. An individual may elect to pay any installment of his estimated tax before the date prescribed for its payment. An individual may also elect to file a declaration of estimated tax in the closing days of a calendar year for his taxable year about to begin, and may pay in full the amount of his estimated tax for such taxable year at the time he files the declaration.

G. Payment is on account of tax for taxable year. Payment of the estimated tax, or any installment thereof, shall be considered payment on account of the tax for the taxable year. For example, a payment made on May 1, 1984 will be applied to income tax for taxable year 1984 and may not subsequently be applied to any additional tax assessed for any taxable year other than 1984.

H. Credit against estimated tax liability. See § 58.1-499 of the Code of Virginia and regulations thereunder with respect to crediting income tax overpayment against estimated tax for the ensuing year.

Statutory Authority

§§ 58.1-203 and 58.1-491 of the Code of Virginia.

Historical Notes

Derived from VR630-2-491; adopted September 19, 1984, eff. January 1, 1985.

23VAC10-112-40. (Repealed.)

Historical Notes

Derived from VR630-2-492 § 1; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989; repealed, Virginia Register Volume 33, Issue 6, eff. February 1, 2017.

23VAC10-112-41. (Repealed.)

Historical Notes

Derived from VR630-2-492 § 2; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989; repealed, Virginia Register Volume 33, Issue 6, eff. February 1, 2017.

23VAC10-112-42. Failure by individual to pay estimated tax; period of underpayment.

The period of the underpayment shall run from the date the installment was required to be paid to the earlier of the following dates:

1. May 1, if a calendar year, or the 15th day of the fourth month following the close of the, taxable year, if a fiscal year; or

2. With respect to any portion of the underpayment, the date on which such portion is paid. For purposes of this subdivision, a payment of estimated tax on any installment date shall be considered a payment of any previous underpayment only to the extent such payment exceeds the amount of the installment determined under subdivision 1 of 23VAC10-112-41 for such installment date.

EXAMPLE 1: Taxpayer C filed her return for taxable year 1988 on May 1, 1989, showing a tax liability of $10,000. She had previously paid $1,500 of estimated tax on each of May 1, June 15 and September 15, 1988, and January 15, 1989, and made no other payments before the return was filed. Because each $1,500 payment was less than 90% of $2,500 (one-quarter of the tax shown as due on the return), the addition to the tax applies to each underpayment on each installment date, computed as follows (and assuming an annual interest rate of 12%):

Amount of each underpayment installment:

90% of $2,500 =

$2,250

less installment paid

$1,500

$750

1st installment-period: 5/1/88 to 5/1/89 (12% x 365/365 x $750)

$90

2nd installment-period: 6/15/88 to 5/1/89 (12% x 320/365 x $750)

$78.75

3rd installment-period: 9/15/88 to 5/1/89 (12% x 228/365 x $750)

$56.25

4th installment-period: 1/15/89 to 5/1/89 (12% x 106/365 x $750)

$26.25

Total addition to tax

$251.25

EXAMPLE 2: Taxpayer had a total tax liability of $5,000, 90% (or $4,500) of which would be due in quarterly installments of $1,125 each. He made payments as follows: $200 on May 1, $800 on June 15, $3,000 on September 15 and $0 on January 15. The $1,875 overpayment from September 15 would be applied to the other quarterly underpayments in the following order and amounts: $925 to May 1, $325 to June 15, and $625 to January 15.

Statutory Authority

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

Historical Notes

Derived from VR630-2-492 § 3; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989.

23VAC10-112-43. Failure by individual to pay estimated tax; exception.

A. Notwithstanding the provisions of 23VAC10-112-40, 23VAC10-112-41, and 23VAC10-112-42, the addition to the tax with respect to any underpayment of any installment shall not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of such installment equals or exceeds the amount which would be required to be paid on or before such date if the estimated tax were any of the following:

1. The tax shown on the return of the individual for the preceding taxable year, if a return showing a liability for tax was filed by the individual for the preceding taxable year and such preceding year was a taxable year of 12 months, or

2. An amount equal to the tax computed, at the rates applicable to the taxable year, on the basis of the taxpayer's status with respect to personal exemptions for the taxable year, but otherwise on the basis of the facts shown on his return for, and the law applicable to, the preceding taxable year, or

3. An amount equal to 90% (66-2/3% in the case of self-employed farmers or fishermen referred to in 23VAC10-112-23 B of the tax for the taxable year computed by placing on an annualized basis the taxable income for the months in the taxable year ending before the month in which the installment is required to be paid. For purposes of this subsection the taxable income shall be placed on an annualized basis by:

a. Multiplying by 12 (or, in the case of a taxable year of less than 12 months, the number of months in the taxable year) the taxable income (computed without deduction of personal exemptions) for the months in the taxable year ending before the month in which the installment is required to be paid,

b. Dividing the resulting amount by the number of months in the taxable year ending before the month in which such installment date falls, and

c. Deducting from such amount the deductions for personal exemptions allowable for the taxable year (such personal exemptions being determined as of the last date prescribed for payment of the installment); or

4. An amount equal to 90% of the tax computed, at the rates applicable to the taxable year, on the basis of the actual taxable income for the months in the taxable year ending before the month in which the installment is required to be paid.

The periods involved, for a calendar year taxpayer, are January 1 to April 30, January 1 to May 31, and January 1 to August 31. Virginia taxable income for the applicable period is computed as follows: there is subtracted from the federal adjusted gross income for the four, five or eight month period, as applicable, (i) the Virginia subtractions specified in § 58.1-322 of the Code of Virginia, (ii) the greater of itemized deductions or standard deduction, (iii) child and dependent care deduction, and (iv) the dollar amount of exemptions claimed on the return; and there is added to federal adjusted gross income the Virginia additions specified in § 58.1-322 of the Code of Virginia. Virginia income tax is calculated on the resulting Virginia taxable income. If the estimated tax installment relating to the period is at least 90% of such tax, no addition to tax is required.

B. Examples.

1. Taxpayer E filed a return for calendar year 1987 showing a tax liability of $4,750. For calendar year 1988 E made timely estimated tax payments which, together with withholding payments, totalled $4,750. E's return for calendar year 1988 revealed a total tax liability of $6,000, which was underpaid by $1,250 or more than 10%. Since the total amount of estimated tax paid by each installment date equalled the amount that would have been required to be paid on or before each of such dates if the estimated tax were the tax shown on the return for the preceding year, the exception in subdivision A 1 of this section applies and no addition to the tax will be imposed.

2. Assume the same facts as in Example 1 except that Taxpayer E adopted a daughter and son on January 1, 1988, and made estimated tax payments in calendar year 1988 totalling $4,700. The exception under subdivision A 1 of this section does not apply because the 1988 estimated tax payments are less than the tax shown on his 1987 return. However, subdivision A 2 of this section permits E to recalculate his 1987 tax liability using his two additional $700 exemptions. Assuming that E has reached the 5.75% tax bracket, the $1,400 would yield tax savings of $80.50 (5.75% of $1,400). The $80.50 tax savings would reduce his recomputed 1987 tax liability to $4,669.50. Because the total amount of estimated tax paid by each installment date exceeds the amount which would have had to be paid on or before each of such dates if the estimated tax were $4,669.50, no addition to the tax will be imposed.

3. Taxpayer F's 1987 return revealed a total tax liability of $311, but she qualified for an age credit in the amount of $311 so that no tax was due for 1987. She had one exemption for both 1987 and 1988, and $200 in withholding and estimated tax payments were made for calendar year 1988. Her 1988 tax liability was $1,000. The exception of subdivision A 1 of this section does not apply because the 1988 payments are less than the $311 tax liability shown on her 1987 return. However, subdivision A 2 of this section provides an exception because the 1988 payments of $200 at least equal the tax (figured using the applicable nonrefundable credits) which would have been due on her 1987 income, using 1988 rates and personal exemptions.

4. Taxpayer G, who claims one exemption and itemizes deductions, made four timely installment payments of estimated tax totalling $4,400 for calendar year 1988. His calendar year 1988 tax liability was $5,000 and his receipt of Virginia adjusted gross income accelerated as the year progressed, as the following worksheet illustrates:

1/1/88 to 4/30/88

1/1/88 to 5/31/88

1/1/88 to 8/31/88

Virginia adjusted gross income

$15,000

$27,000

$64,000

1. Annualized Va. adjusted gross income for period(s) shown

$46,500

$64,800

$96,000

2. Annualized itemized deductions for period(s) shown or Standard Deduction if not itemized

6,000

12,000

9,000

3. Total dollar amount of exemptions

800

800

800

4. Taxable income lines 2 and 3 from 1

39,700

52,000

86,200

5. Virginia tax on the amount shown on line 4

2,048

2,755

4,722

22.5% (or 90% of 25%) of line 5:

45% (or 90% of 50%) line 5:

67.5% (or 90% of 75%) of line 5:

Installments due through the applicable period

$460.80

$1,239.75

$3,187.35

Installments paid through the applicable period

$1,100

$2,200

$3,300

Because the total of estimated payments through each of the three periods is at least (and, in fact, exceeds) 90% of the tax on the annualized taxable income for the applicable period(s), no addition to tax applies because of the exception in subdivision A 3 of this section.

5. Taxpayer H who is single, claims one exemption and itemizes deductions, had $100,000 of federal adjusted gross income for calendar year 1989 and a tax liability of $5,000. H expected her income to be $70,000 and had paid estimated tax in four $975 installments. Her calendar year 1988 tax liability was $4,000. As the following worksheet illustrates, her estimated tax payment for each of the four, five and eight month periods is at least (and, in fact, exceeds) 90% of the tax liability for the applicable period and no addition to tax applies because of the exception in subdivision A 4 of this section.

1/1/89 to 4/30/89

1/1/89 to 5/31/89

1/1/89 to 8/31/89

1. Federal AGI for period(s) shown

$17,500

$29,000

$69,000

2. a. Add Virginia additions and/or
b. Subtract Virginia subtractions for period(s) shown

–2,000

–2,000

–3,000

3. Subtract

a. Itemized deductions for period(s) shown, or (if greater

b. Standard Deduction on the income shown

–2,000

–5,000

–6,000

4. Subtract Child and Dependent Care Deduction for the period(s) shown

- 0 -

- 0 -

- 0 -

5. Subtract dollar amount of exemptions

–800

–800

–800

6. Virginia taxable income for period(s) shown

12,700

21,200

59,200

7. Virginia tax on amounts shown on line 6

505

969

3,154

8. 90% of line 7

455

872

2,839

9. Installments paid through the applicable period

975

1,950

2,925

Statutory Authority

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

Historical Notes

Derived from VR630-2-492 § 4; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989.

23VAC10-112-44. Failure of individual to pay estimated tax; application of section in case of tax withheld on wages.

For purposes of applying this section:

1. The estimated tax shall be computed without any reduction for the amount which the individual estimates as his credit under § 58.1-480 of the Code of Virginia and its regulations (relating to tax withheld at source on wages), and

2. The amount of the credit allowed under § 58.1-480 of the Code of Virginia and its regulations (dealing with withheld amounts credited to individual taxpayer) for the taxable year shall be deemed a payment of estimated tax, and an equal part of such amount shall be deemed paid on each installment date (determined under § 58.1-491 of the Code of Virginia and its regulations) for such taxable year, unless the taxpayer establishes the dates on which all amounts were actually withheld, in case the amounts so withheld shall be deemed payments of estimated tax on the dates on which such amounts were actually withheld.

Statutory Authority

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

Historical Notes

Derived from VR630-2-492 § 5; adopted September 19, 1984, eff. January 1, 1985; amended, eff. February 1, 1989.

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.

23VAC10-112-50. (Repealed.)

Historical Notes

Derived from VR630-2-493, VR630-2-495, VR630-2-497 and VR630-2-498; adopted September 19, 1984, eff. January 1, 1985; repealed, Virginia Register Volume 23, Issue 6, eff. February 10, 2007.

FORMS (23VAC10-112).

Underpayment of Estimated Tax by Individuals, Estates and Trusts, Form 760 C.

Virginia Estimated Individual Income Tax Declaration and Forms for Individuals, Estates and Trusts, Form 760ES.

Underpayment of Estimated Tax by Farmers and Fishermen, Form 760F.

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