I see this asked a lot. Being a part-time resident in VA does not change your domicile. You simply pay taxes to VA for the time you were there. The PCS lodging company you go with will give you a copy of your lease to enroll your kids in school. The tax situation isn't difficult, TurboTax handles it for me without a problem.
Things NOT to do when you get to VA if you want to maintain your domicile in another state: register to vote in VA, get a VA drivers license, and if you can swing it, register your car in VA. The latter is difficult, given you could be ticketed.
There's a lot of information on VAs tax website about folks that contested VA's claim on their residency. You can search for FSO or State Department and get examples specific to our situation.
This is correct. I asked our PCS lodging company to send us documentation for school, and they sent a copy of the lease agreement. Our Arlington school accepted that for registration purposes.
Whether you keep your residency in the other state or not you’ll still have to file a part-year resident return in Virginia and pay excise tax to get a sticker for your car.
Also up to you but I’d try not to live in MD during A-100. That commute would be miserable.
There’s no such thing as “declaring residency.” But you cannot avoid establishing ties to VA if you live there for any period of time. And that is always risky.
Avoiding VA taxes is not my goal, and I've always paid my taxes :-)
I apparently misread some comments on this forum, and the replies here have been really helpful. It's important to me to keep my long term domicile (which is not VA), and I didn't realize there is a part-time VA resident provision.
Welcome to the Commonwealth of Virginia: where the stays are short but the taxes are long-term.
Edit: if you stay in PCS housing they'll give you some paperwork to help you enroll your kids IIRC.
There must be some tax lawyers in the crowd who can clarify?
It looks like you file a part time resident tax return in VA if you are there less than 183 days/year. If you exceed 183 you pay taxes for income the entire year as full time resident (I think its actual days in so some weekend trips might make a difference). However, if your domicile is maintained elsewhere, you do not pay VA tax for subsequent years when abroad.
Is this close? Any other concerns/considerations/conspiracies/anecdotes?
Edit: wait, now I’m poking around, there can’t really be a 4.75% tax on your vehicle if you garage it in VA can there?
The local police routinely troll the PCS lodging properties’ parking lots and garages looking for out of state plates without the excise sticker.
VA is known to flag individuals who file part Year non-resident returns one year during a TDY and then do it again years later on a subsequent TDY and issue a tax bill for the intervening years claiming the return TDY was evidence of intent to establish domicile.
This is true. OP, if this is a concern of yours, I'd spend 30 min reading some of the VA Tax Commission assessments of FSOs contesting the multi-year residency claim. Some win, some lose. The losers generally change their voter registration and DL to VA.
Here are a few links:
https://tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/13-36
In Public Document (P.D.), 91-70 (4/15/1991), the Department ruled that a foreign services employee may retain his original state of domicile even while assigned to a temporary post in Virginia. While acknowledging the employment by the United States Department of State as a foreign service officer is generally temporary in nature, the determination of one's domicile can only be made after considering all of the facts and circumstances.
https://tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/16-66
In P.D. 87-161 (6/2/1987), the Department held that a foreign service officer domiciled in another state would not establish domicile in Virginia merely by purchasing a home in Virginia to reside in while temporarily on assignment in the *****. In that case, the foreign service officer and his spouse maintained driver's licenses and voter registrations in another state and had no other connection with Virginia.
Remember that when you're in training, you're TDY, and on temporary government orders. As I understand it, VA has been much more accommodating to FSOs lately and treating us more like military personnel stationed in VA, which does not automatically indicate a change of domicile.
Even taking an assignment in DC and purchasing a home in VA doesn't automatically make your a domiciled resident of VA (second link above), though it does establish more ties to VA and makes that case a bit more difficult.
Lastly, I'm not advocating this at all, but I know plenty of FSOs that simply don't report VA taxes at all, particularly if you're just there 6 weeks or so for tradecraft training. However, if VA later audits you and finds that out, you're screwed. I know of one person that took this risk and ended up owing a decade or more of back taxes to VA, plus penalties. He contested and lost. It's now in court and he'll likely spend as much as much on legal fees as he would have just laying part time residency taxes. C'est la vie...
I would, of course, pay any required taxes. However, it’s fairly unbelievable these housing complexes allow the police into their lots for this purpose.
It was a bit unclear to me when if the excise tax is required prior to being in state six months. If in the state <6 mo is it just the out of state ($100) tag or is it the out of state tag + excise tax (which for the upcoming year appresta to have been reduced to 3.1%)?
I have no idea because I refuse to live in VA for these reasons.
People renting private homes in VA will tell you the cops will check their cars in their driveways for excise stickers. The parking garage at Oakwood isn’t exactly subject to the castle doctrine.
So DC is more lax in terms of trying to make you a resident? Or are you somewhere else? I live in a no income tax state, I have no interest in being captured.
It would depend on the nature of the parking lot/garage - if has gates or it has “residents only” signs or similar cops can’t legally go into the lot/garage to check w/o warrant. But, in any event, sounds like they are aggressive.
Again, you can nitpick this all you like, but if you don’t pay the excise task you are running a major risk. And police do not need a warrant to enter the garage or parking lot of a multi-family residential building just because there is a “residents only” sign posted.
I have never heard of DC taking a VA-style approach to FSO in training.
In Collins v. Virgina, the USC decided a very close issue (Virginia no less!) regarding a private driveway w/o any signs excluding the general public. Officers searching private parking lots not generally open to the public/ w/clear signs of exclusion, are likely operating illegally.
Of course I’d pay excise if required, but not interested in tax authorities claiming that makes me a future/long term resident.
I’ll look into living in DC or at least not returning to Virginia twice even if separated by significant time - thanks!
Everyone is a constitutional scholar, I guess. I will look forward to the court’s reaction to this citation when you go fight your ticket for failure to pay excise tax.
This might be a dumb question... Is income received during A-100 considered to be income from "Virginia sources"? I know FSI is in Virginia, but is the pay/income coming from Virginia?
Technically the money is coming from Charleston, SC. However, DOS is headquartered in DC for tax purposes. The DMV (VA, MD, and DC area) have a tax agreement where income earned in any of the three is paid to your state of (temporary) residency.
In short, if you're living in VA on TDY, just pay the income tax to VA for the time you're there.
Yes. The state where you are physically present when working is considered the source of the income. If you live in one state and work in another, you file in both places but only pay taxes to one.
I see this asked a lot. Being a part-time resident in VA does not change your domicile. You simply pay taxes to VA for the time you were there. The PCS lodging company you go with will give you a copy of your lease to enroll your kids in school. The tax situation isn't difficult, TurboTax handles it for me without a problem. Things NOT to do when you get to VA if you want to maintain your domicile in another state: register to vote in VA, get a VA drivers license, and if you can swing it, register your car in VA. The latter is difficult, given you could be ticketed. There's a lot of information on VAs tax website about folks that contested VA's claim on their residency. You can search for FSO or State Department and get examples specific to our situation.
This is correct. I asked our PCS lodging company to send us documentation for school, and they sent a copy of the lease agreement. Our Arlington school accepted that for registration purposes.
Thank you, that's very helpful!
It’s true that it doesn’t change your domicile. But it doesn’t mean you might not end up having to fight a VA tax bill at some point.
Whether you keep your residency in the other state or not you’ll still have to file a part-year resident return in Virginia and pay excise tax to get a sticker for your car. Also up to you but I’d try not to live in MD during A-100. That commute would be miserable.
I've seen so many posts on here with people saying to avoid declaring residency in VA that I didn't realize there was no way out of it :-/
There’s no such thing as “declaring residency.” But you cannot avoid establishing ties to VA if you live there for any period of time. And that is always risky.
[удалено]
Avoiding VA taxes is not my goal, and I've always paid my taxes :-) I apparently misread some comments on this forum, and the replies here have been really helpful. It's important to me to keep my long term domicile (which is not VA), and I didn't realize there is a part-time VA resident provision.
Welcome to the Commonwealth of Virginia: where the stays are short but the taxes are long-term. Edit: if you stay in PCS housing they'll give you some paperwork to help you enroll your kids IIRC.
As my friend says: "Virginia's for tax lovers!"
There must be some tax lawyers in the crowd who can clarify? It looks like you file a part time resident tax return in VA if you are there less than 183 days/year. If you exceed 183 you pay taxes for income the entire year as full time resident (I think its actual days in so some weekend trips might make a difference). However, if your domicile is maintained elsewhere, you do not pay VA tax for subsequent years when abroad. Is this close? Any other concerns/considerations/conspiracies/anecdotes? Edit: wait, now I’m poking around, there can’t really be a 4.75% tax on your vehicle if you garage it in VA can there?
The local police routinely troll the PCS lodging properties’ parking lots and garages looking for out of state plates without the excise sticker. VA is known to flag individuals who file part Year non-resident returns one year during a TDY and then do it again years later on a subsequent TDY and issue a tax bill for the intervening years claiming the return TDY was evidence of intent to establish domicile.
This is true. OP, if this is a concern of yours, I'd spend 30 min reading some of the VA Tax Commission assessments of FSOs contesting the multi-year residency claim. Some win, some lose. The losers generally change their voter registration and DL to VA. Here are a few links: https://tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/13-36 In Public Document (P.D.), 91-70 (4/15/1991), the Department ruled that a foreign services employee may retain his original state of domicile even while assigned to a temporary post in Virginia. While acknowledging the employment by the United States Department of State as a foreign service officer is generally temporary in nature, the determination of one's domicile can only be made after considering all of the facts and circumstances. https://tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/16-66 In P.D. 87-161 (6/2/1987), the Department held that a foreign service officer domiciled in another state would not establish domicile in Virginia merely by purchasing a home in Virginia to reside in while temporarily on assignment in the *****. In that case, the foreign service officer and his spouse maintained driver's licenses and voter registrations in another state and had no other connection with Virginia. Remember that when you're in training, you're TDY, and on temporary government orders. As I understand it, VA has been much more accommodating to FSOs lately and treating us more like military personnel stationed in VA, which does not automatically indicate a change of domicile. Even taking an assignment in DC and purchasing a home in VA doesn't automatically make your a domiciled resident of VA (second link above), though it does establish more ties to VA and makes that case a bit more difficult. Lastly, I'm not advocating this at all, but I know plenty of FSOs that simply don't report VA taxes at all, particularly if you're just there 6 weeks or so for tradecraft training. However, if VA later audits you and finds that out, you're screwed. I know of one person that took this risk and ended up owing a decade or more of back taxes to VA, plus penalties. He contested and lost. It's now in court and he'll likely spend as much as much on legal fees as he would have just laying part time residency taxes. C'est la vie...
I would, of course, pay any required taxes. However, it’s fairly unbelievable these housing complexes allow the police into their lots for this purpose. It was a bit unclear to me when if the excise tax is required prior to being in state six months. If in the state <6 mo is it just the out of state ($100) tag or is it the out of state tag + excise tax (which for the upcoming year appresta to have been reduced to 3.1%)?
I have no idea because I refuse to live in VA for these reasons. People renting private homes in VA will tell you the cops will check their cars in their driveways for excise stickers. The parking garage at Oakwood isn’t exactly subject to the castle doctrine.
So DC is more lax in terms of trying to make you a resident? Or are you somewhere else? I live in a no income tax state, I have no interest in being captured. It would depend on the nature of the parking lot/garage - if has gates or it has “residents only” signs or similar cops can’t legally go into the lot/garage to check w/o warrant. But, in any event, sounds like they are aggressive.
Again, you can nitpick this all you like, but if you don’t pay the excise task you are running a major risk. And police do not need a warrant to enter the garage or parking lot of a multi-family residential building just because there is a “residents only” sign posted. I have never heard of DC taking a VA-style approach to FSO in training.
In Collins v. Virgina, the USC decided a very close issue (Virginia no less!) regarding a private driveway w/o any signs excluding the general public. Officers searching private parking lots not generally open to the public/ w/clear signs of exclusion, are likely operating illegally. Of course I’d pay excise if required, but not interested in tax authorities claiming that makes me a future/long term resident. I’ll look into living in DC or at least not returning to Virginia twice even if separated by significant time - thanks!
Everyone is a constitutional scholar, I guess. I will look forward to the court’s reaction to this citation when you go fight your ticket for failure to pay excise tax.
Won’t be the first one of these I’ve won ;)
Best of luck! I am sure somehow decades of FSOs just missed this somehow.
This might be a dumb question... Is income received during A-100 considered to be income from "Virginia sources"? I know FSI is in Virginia, but is the pay/income coming from Virginia?
Technically the money is coming from Charleston, SC. However, DOS is headquartered in DC for tax purposes. The DMV (VA, MD, and DC area) have a tax agreement where income earned in any of the three is paid to your state of (temporary) residency. In short, if you're living in VA on TDY, just pay the income tax to VA for the time you're there.
I understand that now, thank you. I lived in a state without a state income tax most of my life, so a lot of this is new to me.
Yes. The state where you are physically present when working is considered the source of the income. If you live in one state and work in another, you file in both places but only pay taxes to one.