The Virginia Department of Taxation recently released Letter Ruling 21-59 (dated May 18, 2021), determining that Virginia-sourced wage income earned by a wife under federal nonresident alien status was taxable to a couple with part-time Virginia residency.
The couple began residing in Virginia in June 2017 and spent 199 days in the state that year. Because they spent more than 183 days of the taxable year in Virginia, the Department concluded that both individuals were “actual residents” under Virginia law and that income earned during the period of residency was subject to tax. The Department rejected the couples’ argument that the wife’s status as a nonresident alien for federal income tax purposes precluded her from being subject to the Virginia income tax on wages earned under an F visa. Additionally, the Department explained that even if the wife had not been a resident of Virginia, she would have been liable for Virginia income tax because the wages stemmed from Virginia sources as she worked for her employer in Virginia.