Tax Tips for U.S. Americans Abroad
Do US expats need to file Virginia state taxes? Possibly. However, one thing for sure is that all US Citizens and Greencard Holders are required to report their worldwide income to the IRS regardless of where they live and work (just see this post to learn more about that).
If you are no longer domiciled (meaning, you don’t consider yourself to have a permanent home in the states that you will return to if your job contract expires) read on. If you still are domiciled in Virginia, you will most likely need to file a state return every year!
Here’s a simple guide to determine whether US expats need to file Virginia state taxes:
Did you live in Virginia for any part of the year?
- Yes: You will need to file as Part-Year Resident, skip down below
- No: Continue on
Did you earn any Virginia sourced income during the year?
- Yes: File as Non-Resident, skip down below
- No: You don’t need to file
Every Virginia resident whose Virginia adjusted gross income is at or above the minimum threshold must file.
If you had Virginia source income during the taxable year even if you were a non-resident, you may also be required to file Form 763, Non-resident Return in the following cases: If you had income from Virginia sources, other than interest from personal savings accounts, interest or dividends from an individual stock market investment, or pension payments from a Virginia payor.
What is Virginia Sourced Income?
- Money/income earned while you worked physically in Virginia State (i.e. any income including normal salary from your non-US employer) while on a business trip to Virginia.
- Or income earned from physical property located in Virginia (i.e. rental income from your old Virginia home).
Other Virginia Income Sources are listed here.
Virginia Specific Filing Details
You must file if you are:
- Single and your Virginia adjusted income is $11,950 or more
- Married filing jointly and combined Virginia adjusted income is $23,900 or more
- Married filing separately and your Virginia adjusted income is $11,950 or more
If you were a nonresident or part-year resident of Virginia during 2018 and you have Virginia sourced income you still may qualify for an exemption to file Virginia tax return.
An exemption to the filing requirement for nonresidents applies to certain residents of Kentucky, the District of Columbia, Maryland, Pennsylvania, and West Virginia if their only Virginia source income is from salaries and wages.
Expat Tax Benefits
Which expat tax benefits does Virginia State allow?
Moving Expenses: No
Foreign Earned Income Exclusion: Yes
Foreign Tax Credit: Yes, limited to taxes paid to a foreign country on a pension income derived from employment in a foreign county.
A lot to process?
The information we shared on whether US expats need to file Virginia state taxes is a lot. So don’t panic if you can’t understand it all! We at MyExpatTaxes can also help out with your state tax filings in an affordable way. Click here to sign up for our app, and get ready for a fun ride!