                                 CODE OF VIRGINIA

REFUNDS TO INDIVIDUAL TAXPAYERS; CREDITING OVERPAYMENT AGAINST ESTIMATED TAX FOR
ENSUING YEAR (§ 58.1-499)

A. In the case of any overpayment of any tax, addition to tax, interest or
penalties imposed on an individual income taxpayer by this chapter, whether by
reason of excessive withholding, overestimating and overpaying estimated tax,
error on the part of the taxpayer, or an erroneous assessment of tax, the Tax
Commissioner shall order a refund of the amount of the overpayment to the
taxpayer. The overpayment shall be refunded out of the state treasury on the
order of the Tax Commissioner upon the Comptroller.

B. If a refund of an overpayment of individual income tax payments is made
payable jointly to married individuals who receive a final divorce decree after
filing a joint income tax return, separate income tax returns on a single form,
an amendment thereto, or other claim resulting in the issuance of a refund, the
Tax Commissioner shall order the reissuance of the refund in separate checks to
each spouse if the unnegotiated joint refund check is returned to Department
with a certification, in a form satisfactory to the Department, made by one
spouse that the other spouse refuses to endorse the joint refund check or cannot
be located. In making such certification, the spouse returning the check shall
agree to indemnify the Commonwealth for any amounts that the Commonwealth may be
required to pay to the other spouse with respect to such refund. A certified
copy of the final divorce decree, including any agreement with respect to the
division of property between the spouses, shall be provided with the
certification. If the final divorce decree addresses the apportionment or
ownership of the refunded amount, the refund shall be apportioned and separate
payments ordered as provided therein. If the final divorce decree does not
address the apportionment or ownership of the refunded amount, the amount of the
refund shall be divided equally between the spouses. The reissuance of refund
payments pursuant to this subsection shall not affect the joint and several
liability of the spouses for tax liabilities for the period for which the return
or returns were filed.

C. Whenever the annual income tax return of an individual income taxpayer
indicates in the place provided thereon that the taxpayer has overpaid his tax
for the taxable year by reason of excessive withholding or overestimating and
overpaying estimated tax, or both, the amount of the overpayment as shown on his
return, subject to correction for error, may be credited against the estimated
income tax for the ensuing year at the taxpayer&#8217;s election and according
to regulations prescribed by the Department and such overpayments by either
spouse on a separate return may be credited to the tax for the ensuing year of
either of them or may be credited to their joint tax at the election of the
person to whom the overpayment is payable; or otherwise such amount shall be
refunded to him as soon as practicable. Interest on such refund shall be allowed
and computed in accordance with &#xA7; 58.1-1833. The making of any refund shall
not absolve any taxpayer of any income tax liability which may in fact exist and
the Tax Commissioner may make an assessment for any deficiency in the manner
provided by law.

D. No refund under this section, however, shall be made for any overpayment of
less than $1 except on special written application of the taxpayer, nor shall
any refund of any amount under this section be made, whether on discovery by the
Department or on written application of the taxpayer, if such discovery is not
made or such written application is not received within three years from the
last day prescribed by law for the timely filing of the return, or within one
year from the final determination date, as defined in &#xA7; 58.1-311.2, for any
change or correction in the liability of the taxpayer for any federal tax upon
which the state tax is based, whichever is later.

E. Notwithstanding the provisions of the Setoff Debt Collection Act (&#xA7;
58.1-520 et seq.), whenever any taxpayer is entitled to a refund under this
section, or under &#xA7; 58.1-309 or &#xA7;&#xA7; 58.1-1821 through 58.1-1830
and such taxpayer owes the Commonwealth a past due income tax, or balance
thereof, for any year, the amount of such refund may be credited on such past
due income tax or balance, to the extent indicated.

HISTORY: Code 1950, § 58-151.31; 1962, c. 612; 1966, c. 244; 1971, Ex. Sess.,
c. 171; 1977, c. 250; 1984, c. 675; 1997, c. 355; 2020, cc. 900, 1030.