Virginia taxpayers have a choice of four filing categories: single, married filing jointly, married filing separate returns or married filing separately on a combined return. There is no Virginia category corresponding to either the federal head of a household or a widow or widower with dependent child.
A Virginia joint return is only authorized if you filed a joint federal return or if neither spouse was required to file a federal return.
You may use the "combined separate" category regardless of whether you filed your federal return jountly or separately.
Combined separate filing is usually the better method if both spouses had Virginia taxable income. But try both joint and combined separate returns to see which gives you the lower total tax.
If you file using the combined separate status, use Column A for the wife's calculations, Column B for the husband's. All other filers should use Column B only. Exemptions
The number of personal and dependent exemptions--each worth $600 a year--is the same as on the federal return. But in addition to the normal extra exemption for age, there is a further $400 allowance for each taxpayer (but not dependent) who was 65 or older on Dec. 31, 1982. Income
Transfer to line 5 of the Virginia return the figure for adjusted gross income from the federal return. If you are filing a combined separate return, enter in column A and Column B the amounts attributable to each spouse. Adjustments
The state of Virginia automatically allows all of the adjustments you had claimed on your federal return, without modification. The starting figure on the Virginia return is federal adjusted gross income--that is, after subtracting all federal adjustments. Additions
Four principal additions are required to adjust federal income for Virginia tax purposes. Two of these are unchanged from prior years: interest on bonds issued by other states not reported on your federal return, and all or part of a lump sum distribution reported on federal Form 4972 or 5544.
New this year--because it is a new federal deduction not appropriate on the Virginia return--is the allowance for two-earner couples, which must be added back to federal income.
Taxpayers who use the Accelerated Cost Recovery System (ACRS) for depreciation of business property (on federal Form 4562) may have to add to federal income 30 percent of the federal ACRS deduction taken.
If you use Schedule C and have a substantial ACRS deduction for depreciation, see your adviser or a Virginia tax office for assistance. Subtractions
These are the principal subtractions from federal income to arrive at Virginia income: interest received on federal obligations, any state tax refund reported as income on the federal return and the extra $400 allowance for having reached the age of 65.
If you received retirement income from the state of Virginia or its agencies or from any Virginia county, city or other subdivision, the entire amount of such income is exempt from Virginia income tax. Deductions
The standard deduction is equal to 15 percent of adjusted gross income (line 5 of Form 760) not to exceed $2,000--but at least $1,300 regardless of income. For a married person filing separately, the maximum is $1,000 and the minimum $650.
Note: If you reported a lump sum distribution, the 15 percent is applied against the total of adjusted gross income (line 5) and such distribution (line 24).
You may itemize only if you itemized on your federal return. If your itemized deductions on the federal return exceeded the ZBA, you must itemize on your Virginia return.
Itemized deductions (or the standard deduction, if used) may be allocated to either spouse on a combined return, and should be used for the one having the greater separate income.
Virginia deductions are the same as federal except for the exclusion of any deduction taken on the federal return for state or local income taxes paid.
Since you only transfer a single figure for deductions from the federal to the state return, be sure to use the total from line 28 of federal Schedule A rather than the excess, after subtracting the ZBA, on line 30. Child care
Virginia authorizes a separate deduction for child and dependent care, available even if you take the standard deduction and do not itemize.
Since this is an income deduction and not a tax credit, carry over to Part V of Form 760 the amount of qualifying expenses shown on the federal return, not the amount of the federal credit. Attach a copy of federal Form 2441 to your Virginia return. Tax credit for the elderly
You may qualify for a special tax credit if you were at least age 62 on Dec. 31, 1982, had adjusted gross income of less than $16,517 and had less than a specified amount of Social Security or Railroad Retirement Act benefits.
The credit base for each age group and the instructions for claiming the credit are found in Part VII of Form 760. Additional information and detailed qualifying rules are on page 10 of the tax instruction booklet. Nongame wildlife program
On the Virginia tax return, you may elect to donate any part or all of your tax refund, if one is due, to support the state conservation program for wildlife.
If you enter an amount on line 10a of Form 760S or line 20a of the 760, that amount will be deducted from your tax refund and turned over to the Commission of Game and Inland Fisheries. If you itemize next year, your contribution may be deducted on your 1983 federal return. Political contribution
New this year is a provision to contribute $2 of your tax refund to the Virginia central committee of either the Democratic or Republican party. On a joint or combined separate return, each spouse may elect this contribution individually.
The contribution is made by checking the appropriate block on line 10b or 10c of Form 760S or line 20b or 20c of Form 760. If you're not due a refund, you may only make political contributions directly, not through your income tax return. Renewable energy credit
Virginia has passed legislation authorizing a tax credit for the same kinds of renewable energy source expenditures as allowed on the federal return.
This credit is not authorized for 1982 tax returns. It was effective Jan. 1, 1983 and will show up on your 1983 tax form next year. The credit applies only to renewable sources like solar or wind, not to energy conservation measures such as insulation or storm windows.