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

Thoughtware Alert Published: May 03, 2021 | Updated: May 05, 2021

Information current as of March 22, 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.

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

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