Virginia Tax Issue

[Uncle Sam]

I've got a MFJ return for 2 senior citizens who both used to work for the State of Virginia.
Each of them get a 1099-R for pension benefits and each of them have Virginia withholding tax taken out that's 100% refunded..

They no longer reside in Virginia- they're full year NYS residents.

They must file a VA return to get the refund - but for the future - since the VA liability is -0-, must they still file a VA return even if they request to have no withholding tax taken out?

[Lion]

Pensions benefits are taxed where the taxpayer resides. (Well, there are types of compensation that are deferred and still sourced to the state of the original compensation, but that doesn't sound like what you describe.) They can ask the payer for NYS withholding. They should definitely ask for no more VA withholding AND change their address with the payer. For the future, if they have no VA withholding and no VA-sourced income, they do not have to file a VA return. Although, I have no VA clients now, so do check the instructions!

[Uncle Sam]

The 1099's have shown the NY address, and NY does tax non-NYS government pensions - there's no exclusion - both spouses have already gotten their full $ 20,000 exclusion from other pensions and IRAs.
There is no other VA source of income. They have been full year NYS residents for years.
So for 2019 - except for the VA withholding already taken, is there a need to file a VA return at all for 2019?

[Uncle Sam]

This client was a DIY'er. He ran into a problem this year because he moved to my county from the adjacent county and had large pension distributions taken to come up with cash for purchase of new house before selling former one and knew that with the larger distributions - there would be a tax issue with 2018 estimates.
Thanks for helping me out with this one.

[Burke]

Pensions benefits are taxed where the taxpayer resides. They can ask the payer for NYS withholding. They should definitely ask for no more VA withholding AND change their address with the payer. For the future, if they have no VA withholding and no VA-sourced income, they do not have to file a VA return. Although, I have no VA clients now, so do check the instructions!

Virginia will not withhold out-of-state taxes. But the TP's can stop the VA withholding. They will then have to make estimated tax payments to NY or increase their NY withholding from other sources to cover the income if necessary. File Form 763 for full refund.