If you owed the state of Virginia income taxes for 2021, some of that money could come back this fall.
As part of a bipartisan tax refund plan approved this year, the state government is preparing payments of up to $250 per taxpayer (or up to $500 for couples who apply together).
The payments won’t be quite as large as what Gov. Glenn Youngkin proposed in the tax cut plan he campaigned for last year, but the governor has called the roughly $1 billion rebate initiative “the largest tax rebate in of Virginia history.”
The rebate plan didn’t get as much attention as more politically controversial tax proposals like the gas tax suspension, partly because it garnered widespread support and little drama. Before handing power to Youngkin, former Gov. Ralph Northam included in his final budget proposal a plan for one-time rebates funded by excess revenue.
From there, lawmakers mostly just had to figure out how big the checks would be based on what the state could afford. After that, the rebate plan was overwhelmingly approved as part of the state budget passed in June.
How the payments work:
Who is Eligible?
To be eligible for the payments, you had to file a 2021 state tax return showing that you still owed the state money after all deductions and credits were accounted for. If you had less than $250 in government liability, your rebate will be less and only cover the actual liability owed. In other words, if you owed $100, your payment is $100.
Groups that don’t owe much in state income taxes — like low-income people whose tax burden is already minimized by a variety of other loans, and elderly or disabled filers living on Social Security, which Virginia doesn’t count as taxable income — probably don’t care for the discount money come into question.
It’s unclear how many taxpayers can expect repayments.
The Virginia Department of Taxation, which established one website and video Outlining some details on how the payments will be distributed, did not release estimates of how many applicants are expected to qualify based on 2021 filing dates. In response to requests from Mercury, a spokesman for the agency said additional details could be made available later .
In a similar rebate initiative in 2019, the state mailed around 2.5 million checks of up to $110 per applicant.
Chris Wodicka, a tax policy analyst at the left-leaning Commonwealth Institute for Fiscal Analysis, said more claimants could receive payments this year as the 2019 eligibility deadline is July 1 and this year’s deadline is November 1. Based on past years, Wodicka said a few hundred thousand additional statements could be filed in those extra months.
“If we assume something like this is true for 2022, maybe around 2.8 million to 2.9 million rebates will be given that year (with over 1 million taxpayers not getting any),” Wodicka said in an email.
Vivian J. Paige, a Norfolk accountant who chairs the tax committee of the Virginia Society of Certified Public Accountants, said it’s difficult to predict how many Virginians might benefit because eligibility depends on individual circumstances and statistical trends of 2021 tax returns of each applicant. not yet fully known.
“We would have been further along if this had happened in the regular session,” Paige said, referring to the summer’s budget passage, a process that typically wraps up in March and April.
When will the money be sent?
For Virginians who filed their taxes by July 1, rebate payments begin October 17.
The state tax agency says most eligible claimants should receive the rebate by Oct. 31, but late claimants should expect their rebates to come later.
How will people get it?
If you received your tax refund in the mail, expect to receive your refund by paper check as well. If your refund was deposited directly into your bank account, you will see a digital payment there with the description “VATXREBATE”, depending on the state.
For people with outstanding debt, there’s a catch.
For anyone who owes money to a state or local authority, e.g. B. unpaid child support, the money is first used to pay off this debt. If that debt exceeds the amount of the rebate, the state says it will send applicants a letter explaining how their rebate was used and why they didn’t receive it.
What about those who don’t qualify?
Lower-income Virginians should get a new tax break next year because the new policy makes the earned income tax credit mostly reclaimable for working families, meaning bigger refunds for many filers with little to no tax liability.
“It will likely equate to a few hundred dollars in additional reimbursements per eligible family,” Wodicka said.
Democrats pushed for the EITC change under a bipartisan budget agreement with Republicans.
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