Understanding Virginia Non-Resident Tax for Expats

Filing a state income tax return is no doubt a taxing affair. And if you are a non-resident of Virginia, you might be required to file state returns besides Federal expatriate tax returns. There are two scenarios wherein one might be needed to file a state return. The first scenario is when Virginia still considers you its citizen, and you are required to file a Federal ex-pat tax return. The second scenario is when you are a non-resident of Virginia, and you receive income from the state or Virginia Sources. If you fall into any of these categories, hire tax attorney Virginia Beach.

Virginia residents should file tax returns on all sources of income. There is no provision for tax credits for income earned outside the state or the country in Virginia. Thus, one must be aware of how their residency can affect tax obligations in Virginia.

So, how to determine if one needs to File Virginia State and Federal Expat Tax Returns?

Virginia is one of the states where the laws for terminating state residency are complicated. If you think that since you have moved out from the state and don’t live there anymore, you are no longer a Virginia resident, you are wrong. In the commonwealth of Virginia, your legal domicile is also considered besides your residency when determining your tax obligations.

The Virginia Department of Taxation states that a person who has left the state will remain a domiciliary resident of Virginia if he/she has not abandoned the legal domicile of the state and acquired the legal domicile of another state. Even if the person is residing in another jurisdiction for years, he will still be considered a domiciliary resident of the Commonwealth of Virginia. Suppose a Virginia resident has accepted employment in another country. Unless he has not legally abandoned his Virginian domiciliary and established a legal domicile in the place of work, he will be considered an expat resident of Virginia.

Before moving abroad, if you were a Virginia resident, it’s essential that you take appropriate steps to abandon your state residency and establish permanent residence outside Virginia. You will have to prove to the state that you have left the state domiciliary besides actually abandoning the state. You should also be able to prove to the state that you intend to live away from the state indefinitely.

The best tax attorney near me can help you prove you are no longer a Virginia resident using any of these factors. You can use your voter registration, driver’s license, location of savings accounts, vehicle registration and licensing, employment, etc.

How to determine Non-Residency?

Even if you are a non-resident of Virginia, you will be required to file Virginia non-resident state returns if you have acquired income from state sources. Here are the state sources incomes for which you will have to file returns.

•             Income for services performed in the state.

•             Income from the sale of real estate in Virginia.

•             Income like interest from partnership or business operated in Virginia.

•             Gambling winnings and prizes paid by Virginia Lottery.

Like most other states, if a non-resident of Virginia receives income like interest from a pension account or annuity payments, they must not file state tax returns.