State & Local Tax Impacts of COVID-19 for Virginia – 2020

Thoughtware Alert Published: Dec 11, 2020 | Updated: May 05, 2021

Information current as of December 31, 2020.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Virginia

  • Virginia is allowing sales and use tax dealers to request an extension of the February 2020 sales tax return due date from March 20 to April 20. The extension includes a waiver of any penalties, but interest will continue to accrue.
    • Virginia Tax Bulletin 20-3, March 19, 2020.
  • Virginia announced an income tax payment extension and waiver of late payment penalties for any income tax payments due from April 1 to June 1, which can be submitted to the Department of Taxation by June 1 without penalty. Interest will continue to accrue from the original due date. Taxes eligible for the payment extension and penalty waiver include individual, corporate, and fiduciary income taxes, as well as any estimated income tax payments that are required to be paid to the department during this period. The announcement doesn’t provide a filing extension.
    • Virginia Tax Bulletin 20-4, March 20, 2020.
  • Virginia issued continuing clarification on its tax relief provisions. Income tax payments originally due from April 1 to June 1, 2020, can now be submitted to the Department of Taxation without the accrual of interest that would normally be required for late payments. For a taxpayer filing on extension, at least 90 percent of the total tax liability must be paid by June 1, 2020, for the interest waiver to apply. The interest waiver applies to any payment required to be made with a tax year 2019 individual, corporate, or fiduciary income tax return, as well as any such payment required to be made with respect to an election to file on extension. In addition, the interest waiver applies to any individual, corporate, or fiduciary estimated income tax payments required to be paid during the period from April 1 to June 1, 2020. The waiver also applies to payments associated with composite returns. Further, dealers who were granted an extension of the due date for the February 2020 sales tax return and payment due in March under Tax Bulletin 20-3 will receive a waiver of the interest that would have otherwise accrued for the late payment. The interest waiver applies only to such payments submitted to the department no later than April 20, 2020. This relief doesn’t apply to nonresident withholding tax or employer withholding of income tax.
    • Virginia Tax Bulletin 20-5, April 27, 2020.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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