topic Virginia Rental Income in State tax filing

Virginia Rental Income

Longbow16 — Wed, 27 Nov 2019 11:20:35 GMT

I own a rental property in VA. The state site says that if you make less than 23,900 you are not required to file income tax. I am not a resident of VA, I am active duty military stationed in NC. My overall rent recieved is above that threshhold, before deducting property tax, interest, and depreciation. After deducting those, it is below that threshold. Am I still required to file in VA?

Re: Virginia Rental Income

DJS — Wed, 27 Nov 2019 13:52:15 GMT

You're considered a nonresident of Virginia. According to Virginia state form 763 "Nonresidents of Virginia with Virginia Adjusted Gross Income at or above the filing threshold must file if any of their income
is from Virginia sources. Elsewhere it's less clear whether the income filing threshold refers to only Virginia source income or to all income. Here it says that "nonresidents of Virginia with (all) income at or above the filing threshold must file if any of their income is from Virginia sources." In this case it suggests that income refers to all income, not just Virginia source income. Looking at the Form 763 , page two, it requests total income as well as Virginia source income, and then you calculate whether or not you own Virginia taxes. The clear implication is that you will need to File Virginia Form 763, although you may not owe any Virginia Tax.

A nonresident is a person who is not a domiciliary or actual resident of Virginia, but who received income from Virginia sources during the taxable year.

"Income from Virginia sources" means income derived from labor performed, business conducted, or property held in Virginia, as well as lottery prizes and certain gambling winnings. Nonresidents report their income in the same manner as residents, using Virginia Form 763. An allocation percentage, based on the ratio of Virginia source income to income from all sources, is then applied to arrive at the individual's net Virginia taxable income. You are not required to file if you don't owe any taxes and will not receive a refund.

Form 763 further says that "Filing requirements are based on your residency status and the
amount of your income.

• Nonresidents of Virginia with income at or above the filing threshold must file if any of their income is from Virginia sources.

Re: Virginia Rental Income

TomD8 — Wed, 27 Nov 2019 15:46:05 GMT

From the Virginia Form 763 instructions, page 4: VAGI is the Adjusted Gross Income on your federal return plus any Virginia additions from Line 2, minus any Virginia subtractions from Line 8. Information on Virginia additions and subtractions is included in the instructions later in this booklet.

https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2018-form-763-instructions.pdf

Re: Virginia Rental Income

Hal_Al — Fri, 29 Nov 2019 14:39:30 GMT

Simple answer: yes, you must file a VA return.

That said, some things about your post are not clear. You say you are active duty military, stationed in NC but you don't say what your SLR (state of legal residence) is.

The $23,900 refers to ALL your income, not just your VA source income. The $23,900 includes you military pay, net rental profit (not total rent) and any other income, including your spouse's income. Virginia first calculates your Virginia income (VAGI) "as if" you were a VA resident. Then it prorates the income based on your VA source income and calculates the tax on the prorated amount.

If you have a net profit, on the rental, of any amount, you usually must file a VA return.

Your SLR will also tax that rental income, but will give you a credit (or partial credit) for the tax you paid to VA.

Re: Virginia Rental Income 2019 to 2023

tdean3 — Mon, 13 Feb 2023 21:27:23 GMT

https://www.tax.virginia.gov/sites/default/files/vatax-pdf/2018-form-763-instructions.pdf

filing requirements and threshold

1. File Non resident state return first

2. Next File state return you live in for states that have a state return eg. North Carolina

YOU DO NOT HAVE TO FILE IF YOU ARE:
Single and your VAGI is less than ..................$11,950
Married filing a joint return (both must have Virginia Source Income) and your
combined VAGI is less than............................$23,900
Married, spouse has no income from any source and your VAGI is less than ..........$11,950
Married filing separately (on separateforms) and your VAGI is less than..................$11,950

Re: Virginia Rental Income 2019 to 2023

Jokar — Mon, 27 Mar 2023 17:26:20 GMT

@tdean3

Why do you recommend filing the Non-resident state return before filing the state of residence return?

Re: Virginia Rental Income

TeresaM — Mon, 27 Mar 2023 17:43:07 GMT

You will want to file the Non-Resident return first, so the Resident return can see it when it comes to credit for taxes paid for another state.

Re: Virginia Rental Income 2019 to 2023

Hal_Al — Mon, 27 Mar 2023 17:45:44 GMT

Q. Why do you prepare the Non-resident state return before preparing the state of residence return?

A. You need to first calculate the tax on the non-resident state income, so that TT can calculate the credit, for that tax, on the resident state return. Note: it does not matter which one actually gets filed first, only prepared first.