A recent change in Virginia law may impact many individual taxpayers. Effective for taxable years beginning on or after January 1, 2022, individual taxpayers who make estimated income tax payments must submit all payments electronically if:

• Any estimated tax payment exceeds $1,500; or
• Any extension payment exceeds $1,500; or
• The total anticipated income tax liability in any taxable year exceeds $6,000.

These requirements apply to all payments, including any payments for estimated taxes, extension payments, and any other amounts related to an individual return, made on or after July 1, 2022. The Virginia Department of Taxation’s Electronic Payment Guide outlines various options to make electronic payments, including ACH debt or credit transactions, direct payment from a taxpayer’s bank account, and through the Department’s online payment portal. Additionally, payments may still be made at the time of filing using the electronic return filer or Department approved filing software.

Taxpayers may request a temporary waiver from the requirement by demonstrating that it creates an unreasonable burden. The request must be submitted in writing using a Form 770 Waiver Request. It should be noted that all waivers are temporary and must be renewed annually.

The Virginia Department of Taxation has stated that it will begin sending notifications to taxpayers that may meet this requirement. More information on the requirements may be found here.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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