Form 760 Resident Individual Income Tax Returns

File Form 760 if any of the following apply:

The taxpayer:

1. Is a full year Virginia resident

2. Has Virginia income tax withheld form wages

3. Is a minor that has gross income in excess of the personal exemption plus the standard deduction       based on the filing status

4. Is a resident of Virginia employed out of state

5. Is a resident of Virginia employed in a foreign country on a temporary or transitory basis

6. Is a survivor or representative of a deceased taxpayer

Residency:

1. Resident:

   An individual who:

   - Who thinks of Virginia as his/her permanent home

   - Whose center of financial, social, and family life is Virginia

   - Who intends to come back to Virginia when away

2. Part-Year Resident:

   An individual who:

   - Moved into Virginia during the year to maintain residence from another state or country

   - Moved out of Virginia during the year to maintain residence in another state or country

3. Non-Resident:

   An individual:

   - Whose permanent home is outside of Virginia all year

Schedule ADJ Part 1

Use Schedule ADJ Part 1 to report Additions, Subtractions and Tax Credit for Low Income Individuals or VA Earned Income Credit.

Additions to Income:

1. Interest Income on obligations of other states
2. Fixed Date Conformity – additions to income because Virginia did not conform to the federal Internal Revenue Code.

Subtractions from Income:

1. Interest Income from obligations or securities of the U.S.
2. Disability income reported as wages
3. Fixed Date Conformity – subtractions from income because Virginia did not conform to the federal Internal Revenue Code.

Tax Credit for Low Income Individuals or VA Earned Income Credit:

Taxpayer may be eligible to claim a credit for low income if the taxpayers family Virginia adjusted gross income is equal to or less than the federal poverty guidelines and the taxpayer meets the eligibility requirements.  The taxpayer is eligible for the Virginia Earned Income Credit if the taxpayer claimed an earned income credit on the taxpayer federal return.  Claim the Credit that benefits the taxpayer the most but both credits can not be claimed.

Eligibility requirements: The credit for low income or Virginia Earned Income Credit may NOT be claimed if the taxpayer, spouse, or any dependents claimed on the taxpayers return or spouses return claim any of the following.

1. Age deduction
2. Exemption for taxpayers who are blind or age 65 or over
3. Virginia National Guard Subtraction
4. Federal & State Employee Subtraction
5. Taxpayer is claimed as a dependent on another taxpayer’s return.

Schedule ADJ Part 2

Use Schedule ADJ Part 2 to report Credit for Taxes Paid, Underpayment of Estimated Tax, Late Payment Penalty and Interest, Consumer’s Use Tax, Voluntary Contributions from overpaid Taxes, Other Voluntary Contributions, School Foundation Contributions, Amended Returns and Credit for Political Contributions From Part XXIII, of Schedule CR

Credit for Income taxes paid to Other States:

If you are a Virginia resident and you paid income tax to another state, you may be eligible for a credit on your Virginia return.

If the income is from Arizona, District of Columbia, California or Oregon, claim the credit on the nonresident income tax return of that state instead of on the Virginia return.

Underpayment of Estimated Tax Penalty:

If the taxpayer owes more than $150 of tax and taxpayer has not paid 100% of prior years tax a penalty of underpayment of estimated tax may be necessary.  Complete Form760C or 760F to see if penalties apply.

Late Payment Penalty and Interest:

If the taxpayer does not file the Virginia tax return by the due date of the return and no extension is filed.  The penalty is 6% of the tax due for each month or part of a month that the return is late, but not more than 30%.

If the taxpayer does not pay the tax due by the due date, the taxpayer will owe a late payment penalty.  The late payment penalty is 6% of tax due for each month or part of a month that the return is late, but not more than 30%.  The late filing penalty and late payment penalty cannot be more than 30% of the tax due.

If the taxpayer files the tax return by the extended due date, and the tax due is greater than 10% of the total tax liability, the taxpayer will owe an extension penalty. The penalty is 2% per month or part of a month from the original due date of the return until the return is filed.  The extension penalty cannot exceed 12% of the tax due.

If the taxpayer filed a tax due return after the filing date, een if you had an extension, the taxpayer is liable for interest on the tax due amount.

Consumer’s Use Tax:

The taxpayer will nee to pay consumer’s use tax if, during the year the taxpayer purchased:

1. Merchandise by telephone, Internet, or television and no sales tax was changed
2. Merchandise while outside of Virginia and paid no sales tax
3. More than $100 in merchandise by mail and no sales was charged.

The tax is 5% of the total price except for food purchased for home consumption. The tax rate on food purchased for home consumption is 2.5%.

Voluntary Contributions from overpayment of tax:

The taxpayer may voluntarily donate all or part of the tax refund to on or more qualifying organizations.

Other Voluntary Contributions:

The taxpayer may voluntarily donate to on or more qualifying organizations even if the taxpayer has a balance due.

Amended Return:

Use the amended section of Schedule ADJ Part 2 to correct any errors made on the originally filed Virginia individual income tax return. In general, if the taxpayer amended the Federal individual income tax return, the Virginia individual income tax return must also be amended.

NOTE:

An amended return can be filed within 3 years of the original

due date of the return, including extensions.

Credit for Political Contributions from Part XXIII, of Schedule CR:

If the Credit for political contributions is the ONLY credit claimed on the Schedule CR, enter the credit on Schedule ADJ Part 2 and do not file Schedule CR

Form 760PY Part-Year Resident Individual Income Tax Return

File Form 760PY if:

1. The taxpayer is not a resident of Virginia, and

2. The taxpayer received taxable income from Virginia sources, and

3. The taxpayer's gross income from Virginia sources exceeds the

   allowable prorated personal exemption amount

Residency:

1. A resident is an individual who

   - lives in Virginia

   - has their permanent home in Virginia

   - intends to return to Virginia when absent

2. A part-year resident is an individual who

   - moved into Virginia during the year from another state or

     country to maintain residence in Virginia, or

   - moved out of Virginia during the year to maintain residence

     in another state or country

3. A nonresident is an individual who

   - has their permanent home outside of Virginia the entire year

Form 763 Nonresident Individual Income Tax Return

File Form 763 if:

1. The taxpayer is not a resident of Virginia, and

2. The taxpayer received taxable income from Virginia sources, and

3. The taxpayer's gross income from Virginia sources exceeds the

   allowable prorated personal exemption amount

Residency:

1. A resident is an individual who

   - lives in Virginia

   - has their permanent home in Virginia

   - intends to return to Virginia when absent

2. A part-year resident is an individual who

   - moved into Virginia during the year from another state or

     country to maintain residence in Virginia, or

   - moved out of Virginia during the year to maintain residence

     in another state or country

3. A nonresident is an individual who

   - has their permanent home outside of Virginia the entire year

Schedule NPY

Use Schedule NPY for part-year or nonresidents to report Age Deduction, Tax Credit for Low Income Individuals or VA Earned Income Credit, Credit for Taxes Paid, Underpayment of Estimated Tax, Late Payment Penalty and Interest, Voluntary Contributions from overpaid Taxes, Other Voluntary Contributions, School Foundation Contributions and Consumer’s Use Tax.

Age Deduction:

If the taxpayer or spouse if married, were born on or before January 1, 1942, the taxpayer may qualify to claim an age deduction of up to $12,000 each for 2006.  The age deduction the taxpayer may claim depends on birth date, filing status and income.

Birth date on or before January 1, 1939: Taxpayer may claim $12,000.

Birth date on or before January 1, 1939: Spouse may claim $12,000.

Birth dates  between January 2, 1939, and January 1, 1942, causes the deduction to be reduced based on income.

Tax Credit for Low Income Individuals or VA Earned Income Credit:

Taxpayer may be eligible to claim a credit for low income if the taxpayers family Virginia adjusted gross income is equal to or less than the federal poverty guidelines and the taxpayer meets the eligibility requirements.  The taxpayer is eligible for the Virginia Earned Income Credit if the taxpayer claimed an earned income credit on the taxpayer federal return.  Claim the Credit that benefits the taxpayer the most but both credits can not be claimed.

Eligibility requirements: The credit for low income or Virginia Earned Income Credit may NOT be claimed if the taxpayer, spouse, or any dependents claimed on the taxpayers return or spouses return claim any of the following.

1. Virginia National Guard Subtraction.
2. Basic Military subtraction
3. State and federal employees subtraction for earnings of $15,000 or less
4. Exemption for blind taxpayers or taxpayers age 65 and over
5. the age deduction or
6. The taxpayer is claimed as a dependent on another taxpayer’s return.

Credit for Income taxes paid to Other States:

If you are a Virginia resident and you paid income tax to another state, you may be eligible for a credit on your Virginia return.

If the income is from Arizona, District of Columbia, California or Oregon, claim the credit on the nonresident income tax return of that state instead of on the Virginia return.

Underpayment of Estimated Tax Penalty:

If the taxpayer owes more than $150 of tax and taxpayer has not paid 100% of prior years tax a penalty of underpayment of estimated tax may be necessary.  Complete Form760C or 760F to see if penalties apply.

Late Payment Penalty and Interest:

If the taxpayer does not file the Virginia tax return by the due date of the return and no extension is filed.  The penalty is 6% of the tax due for each month or part of a month that the return is late, but not more than 30%.

If the taxpayer does not pay the tax due by the due date, the taxpayer will owe a late payment penalty.  The late payment penalty is 6% of tax due for each month or part of a month that the return is late, but not more than 30%.  The late filing penalty and late payment penalty cannot be more than 30% of the tax due.

If the taxpayer files the tax return by the extended due date, and the tax due is greater than 10% of the total tax liability, the taxpayer will owe an extension penalty. The penalty is 2% per month or part of a month from the original due date of the return until the return is filed.  The extension penalty cannot exceed 12% of the tax due.

If the taxpayer filed a tax due return after the filing date, een if you had an extension, the taxpayer is liable for interest on the tax due amount.

Voluntary Contributions from overpayment of tax:

The taxpayer may voluntarily donate all or part of the tax refund to on or more qualifying organizations.

Other Voluntary Contributions:

The taxpayer may voluntarily donate to on or more qualifying organizations even if the taxpayer has a balance due.

Consumer’s Use Tax:

The taxpayer will need to pay consumer’s use tax if, during the year the taxpayer purchased:

1.      Merchandise by telephone, Internet, or television and no sales tax was changed

2.      Merchandise while outside of Virginia and paid no sales tax

3.      More than $100 in merchandise by mail and no sales was charged.

The tax is 5% of the total price except for food purchased for home consumption. The tax rate on food purchased for home consumption is 2.5%.

Schedule CR

File Schedule CR to report miscellaneous  nonrefundable and refundable credits.

Schedule FED

Use Schedule FED to report federal Schedule C income,  Federal Schedule 2106 Expenses, and  Federal Schedule 4562 depreciation.

Schedule INC

Use Schedule INC to report Virginia W2 Income and withholding and 1099’s with withholding.

Form VA 760ES Estimated Tax Payments

File Form VA 760Dto pay Virginia income tax liability not prepaid through withholding.

File Form VA 760Dif all of the following apply:

The taxpayer:

1. Does not have at least 90% of his/her annual Virginia income tax liability prepaid through withholding

2. Has an annual tax liability that exceeds $150.

Form VA 760C or 760F Penalty on Underestimate of Individual Income Tax

File Form 760ES to pay Virginia income tax liability not prepaid through withholding.

File Form 760C or 760F if tax minus withholding is $150 or more.

Penalty:

Underestimating the required amount of tax or failure to file estimated tax returns and pay the tax within the time allowed will result in an assessment of interest. The interest rate is 8% per month of the underpayment of tax from the due date to the date of payment.

Form VA 760IP Application for Automatic Extension of Time

File Form VA 760IP to request a six month extension of time to file the Virginia individual income tax return.

If the taxpayer expects to owe additional tax, all of the state taxes due must be paid with Form VA 760IP by the return due date.

NOTE:  Form VA 760IP only extends the time to file the Virginia

       individual income tax return, it does not extend the

       time to pay any Virginia income taxes due.