VA | The Virginia Department of Taxation has issued Tax Bulletin 21-7.
Federal Rates Remain Unchanged: State and certain local interest rates are subject to change every quarter due to changes in federal rates established pursuant to Internal Revenue Code (“IRC”) § 6621. IRC § 6621 dictates that the federal underpayment and overpayment rates are three percentage points higher than the federal short-term rate. Federal rates for the third quarter of 2021 will be 3% for tax underpayments (assessments) and 3% for tax overpayments (refunds) by noncorporate taxpayers.
Virginia Code § 58.1-15 provides that the underpayment rate for Virginia taxes will be 2% higher than the corresponding federal rate and the overpayment rate for Virginia taxes will be 2% higher than the federal overpayment rate for noncorporate taxpayers. Accordingly, the Virginia rates for the third quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).