Virginia tax payment plan with Virginia Tax
Virginia Tax calls this a payment plan. A plan can be set up by you through the Teleplan system or online, provided the bill and total balance are under $25,000.
- Self-service limit
- Under $25,000
- Longest income tax repayment period
- A 5-year term
- Interest rate
- The IRS rate plus 2%
- Wage levy
- Net wages are subject to 25%
The $25,000 self-service rule
In Virginia, most people can set up a plan by themselves. The Virginia Tax payment plan page states that you qualify for self-service when tax, penalties and interest total less than $25,000. To begin, you must have a Virginia Tax bill.
Self-service is unavailable when your account already has any of these collection actions:
- A revocation, padlock, bond or criminal warrant
- Tax levies issued to your employer or bank
- Bankruptcy
- Your account is assigned to a Virginia Tax field agent or an outside collection agency
How long can a Virginia plan last?
You may divide an income tax bill for an individual across as many as 5 years. According to Virginia Tax, 24 monthly installments are often accepted for plans made with a representative. Although a down payment is encouraged, you do not have to make one. For individuals, the agency suggests 10% down; for businesses, it suggests 20% when you call to arrange a plan.
Penalties and interest both keep growing during the plan. The penalties and interest information lists the federal underpayment rate plus 2% for interest. Late payments carry a monthly penalty of 6%, with a limit of 30%. Of the plans you can afford, the one with the shortest term adds the least interest.
How do I set up a Virginia Tax payment plan?
After signing in to their online services account, individuals select from the bills for which they are eligible. Only the primary account holder can set up a plan online. For a business, online plan setup covers only employer withholding, digital media fees, sales and use tax, tire recycling fees and vending machine dealer’s tax. Call the agency for any other business taxes.
The Teleplan automated system is also available to individual accounts. Have the 5-digit bill number and your Social Security number ready. Under Teleplan agreements, penalties and interest build up but are left out. Instead, they are added to your final payment. If an outside collection agency has already contacted you, arrange the plan through that agency.
If a payment remains unpaid
Find ways to remain in good standing through the payment plans page. File all returns, pay new taxes when they are due and make every payment on time. Any refund you receive later goes toward the plan, but your scheduled payments still come due.
Late payments may cause Virginia Tax to cancel the plan and begin other collection steps. After missing one, pay it through any 5-digit bill number shown in the plan as soon as you can. Your online account treats reinstating a defaulted plan as a term change. Online changes are limited in number.
Levies and liens, plus support for hardship cases
If you neither pay nor answer a bill within 30 days, Virginia Tax may begin collection actions, as its collections page states. Until the balance has been paid, a wage levy asks your employer to withhold 25% of net wages. Money is taken from your accounts under a bank levy. Whatever is taken in total cannot be more than the amount you owe.
Another filing Virginia can make is a Memorandum of Lien. It works like a judgment and is a public record in circuit court. You can end it by making a full payment and it may also stay in force for 20 years. Accounts can also go to outside collection agencies and field agents can visit a business.
If a levy causes severe financial hardship, you can ask Virginia Tax to adjust it. You generally need to have filed your taxes for the last 3 years. If your income is under 250% of the federal poverty guidelines, a much smaller payment plan may be an option.
If you truly cannot pay, an offer in compromise can settle a bill for less than you owe. Penalties of $2,000 or less may be waived for reasons such as a fire, illness or natural disaster.
Two plans, two agencies
Plans from Virginia Tax and from the IRS are kept apart. Each one has its own agreements, terms and due dates. Put both payments on your monthly calendar so you do not miss either one.
Nearby states
Do you owe money to Virginia Tax and the IRS?
Are you making payments to Virginia Tax and the IRS through separate plans? By speaking with a licensed tax pro on a free call, you can establish terms for both that you can keep.
· numbers synced