The Virginia Department of Taxation recently published Tax Bulletin 21-8, which provides information on interest rates applicable to withholding tax underpayments and overpayments for the fourth quarter of 2021.
Virginia Code Section 58.1-15 provides that the applicable rates for both underpayments and overpayments will be 2% higher than the federal rates for the same payment conditions. Since the federal rates remain unchanged at 3% for the remainder of calendar year 2021, so will the Virginia state rates remain the same for the fourth quarter of 2021. Specifically, the rate for underpayments will remain at 5% while the rate for overpayments will also remain at 5%.
To review the interest rates outlined in Tax Bulletin 21-8, please click here to visit the Department of Taxation online.