VA-4: Employee's Virginia Income Tax Withholding Exemption Certificate

The Commonwealth of Virginia law imposes individual income tax filing requirements on virtually all Virginia residents, as well as on nonresidents who receive income from Virginia sources. The law requires that all employers withhold tax from the income of nonresident employees, if federal law requires the withholding. Any compensation received for services performed is considered taxable income.

Taxable income includes:

• Employment wages
• Non-qualified scholarship money
• Grant funds (considered by the IRS to be taxable income, if a service is performed in order to receive those funds)

Virginia law does not make a designation of resident aliens and nonresident aliens as special statuses for tax filing purposes. Therefore, a resident or nonresident alien is subject to the same Virginia residency provisions as all other filers. If an NRA is required to file a federal income tax return, and the NRA meets the definition of a Virginia resident, part-year resident or nonresident and other filing requirements, the NRA must file a Virginia tax return.

NRA students are subject to the same rules for residency and filing requirements in Virginia as all other filers.

If an NRA is exempted from federal withholding by tax treaty, the NRA is also exempted from withholding in Virginia.

Completing the VA-4

The Virginia income tax withholding exemption certificate is the Form VA-4. The rules for completing the VA-4 for NRAs is as follows:

• Must not claim exemption from withholding
• Must use single status, even if married
• Must claim only one allowance
• Additional withholding may be withheld at the NRA's request

The correct method for filing your income tax return and reporting Virginia taxable income depends on your residency status.

A person who lives in Virginia, or maintains a place of abode here, for more than 183 days during the year, or who is a legal (domiciliary) resident of the Commonwealth is considered a Virginia resident for income tax purposes. (The period of residency does not have to be 183 consecutive days.) Residents file Form 760 at the end of the tax year.

A person who is not a resident or part-year resident, but who receives taxable income from Virginia sources is a nonresident for income tax purposes. Nonresidents file Form 763.

A person who moves into Virginia during the year with the intent of becoming a resident, or a person who moves out of Virginia during the year to become a resident of another state, is a part-year resident for income tax purposes. Part-year residents generally file Form 760PY.

Wages Lower than Exemption Amount

If an NRA's total wages are less than the personal exemption amount there will be ZERO Virginia withholding. The following rules must be met:

• A VA-4 must be filed with University of Richmond for each calendar year for which an NRA claims exemption from Virginia withholding.
• NRA must not have had liability for Virginia income tax in the previous calendar year
• Virginia adjusted gross income is expected to be less that $7,000