State & Local Tax Impacts of COVID-19 for Virginia – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: Jun 08, 2021
SALT GOV COVID TW - 1

Information current as of April 30, 2021.

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 has ruled that loan proceeds paid out under the PPP aren’t gross receipts for purposes of the business, professional, and occupation license tax. This is true regardless of whether some or all of such loans are forgivable.
    • Virginia Department of Taxation, Ruling of Commissioner, P.D. 21-12; February 9, 2021.
  • Virginia legislation updates the state’s date of conformity with the Internal Revenue Code from December 31, 2019, to December 31, 2020, for individual income, trust income, and corporate income tax purposes. The legislation decouples from the CARES Act’s provisions on the net operating loss limitation and carryback, a loss limitation applicable to taxpayers other than corporations, the limitation on business interest, and certain loan forgiveness and other business financial assistance. In addition, the legislation provides a deduction of up to $100,000 for expenses paid with forgiven Rebuild Virginia grants and certain PPP loans for tax-year 2020.
    • Virginia S.B. 1146, effective March 15, 2021, and Virginia Tax Bulletin VTB 21-4, March 15, 2021.
  • Virginia announced the state’s individual income tax filing deadline has been extended to May 17, 2021. Individuals should file and pay by Monday, May 17. This extension doesn’t apply to estimated payments.
    • Virginia Department of Taxation, News Release; March 19, 2021.
  • Virginia provided additional guidance on the extended individual income tax deadlines. No penalties will apply as long as a return is filed and full payment is made by May 17, 2021. Also, under the authority to waive the accrual of interest during a declared state of emergency, no interest will apply as long as a return is filed and full payment is made by May 17, 2021. The new filing and payment deadline for certain 2020 returns applies to composite returns filed on behalf of nonresident owners. However, all other Virginia tax payment, withholding, and filing deadlines remain the same, including the requirement for calendar-year filers to make their first estimated payments for taxable year 2021 by May 3, 2021.
    • Virginia Department of Taxation, Tax Bulletin 21-5; April 9, 2021.

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