
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, March 11, 1991                   TAG: 9103090162
SECTION: BUSINESS                    PAGE: A7   EDITION: METRO 
SOURCE: Mag Poff
DATELINE:                                 LENGTH: Medium

SENIORS: DOUBLE-CHECK YOUR TAX FORMS

Low-income senior citizens are getting a tax break. But because it came in the form of an eleventh-hour mandate from this year's General Assembly the change is not reflected in state income tax forms already in the hands of most taxpayers.

And for those returns already filed, it means some extra processing by state and local officials.

This year's change affects taxpayers who are 62 through 64 years old with federal adjusted gross income of less than $6,000 and taxpayers 65 years and older with federal adjusted gross income of $12,000 or less.

William Forst, state tax commissioner, said the clarification will result in a higher subtraction and lower taxes for those taxpayers.

Forst said the State Department of Taxation will automatically recompute the age subtraction for people who have already filed, provided that they filled out Part 1 of the tax return. If the recomputation results in a lower tax bill, he said, the state will issue a refund automatically.

Persons in the age and income group who have filed returns without completing Part 1 (Lines 31 through 35 on the tax form) must file an amended return to obtain a refund.

Those taxpayers should write "Recomputed Age Subtraction" at the top of the amended return. Forst said amended returns with that notation will be given priority in processing.

For taxpayers in the affected categories who have not yet filed their returns, here's how to amend the printed instructions on the state tax forms:

People who are age 62 or older should disregard the printed instructions for Line 31 in Part 1 of Form 760.

For Line 31, Forst said, "enter on this line the SUM of your federal adjusted gross income from Line 6 and your total Social Security and Tier 1 Railroad Retirement benefits."

After that calculation is entered on Line 35, it should increase the amount of the age subtraction for qualifying older taxpayers.

Because of the change, the full subtraction is available for the first time to people whose federal adjusted gross income is less than the subtraction.

The accompanying chart gives line-by-line examples for taxpayers affected by the change.

Taxpayers who have questions about this new method of computing the age subtraction should contact their local commissioner of revenue. Or they can call the Virginia Department of Taxation in Richmond at 1-804-367-8031. There is a toll charge for that call from Western Virginia. The agency's district office in Roanoke deals with business and sales taxes rather than with individual returns.

This is the second consecutive year in which the rules have been changed after the instructions were printed, according to Ann Meyers, spokeswoman for the Virginia Department of Taxation.

This year's problem resulted from a misinterpretation of a tax reform bill passed by the General Assembly in March 1990. In writing the tax forms, state officials improperly limited the income subtraction due to elderly, low-income taxpayers.

The issue didn't come to a head until Feb. 23, the final day of this year's legislative session. But by then, the state tax agency had already distributed 3 million copies of the incorrect tax forms.

It has since launched a campaign to alert taxpayers to the new rules and the need to revise the forms.

by CNB