Per the Virginia Department of Taxation:
Withholding Tax: Electronic Filing Requirement for Semi-Weekly Filers
Effective July 1, 2011, every withholding tax filer with a semi-weekly filing status is required to file all withholding tax returns and payments electronically. This requirement does not change the filing frequency requirements; however, it may change the filing and payment method used. While some semi-weekly filers are currently required to make their VA-15 payments electronically, this new mandate now requires their VA-16 and VA-6 returns and payments to be filed electronically as well. Employers can meet these electronic filing and paying requirements without purchasing tax filing software. VATAX offers several online services at no cost : Business iFile, Web Upload, ACH Debit and ACH Credit.
W-2 Filing: Electronic Filing Requirement
In addition to the above electronic filing requirements, effective January 1, 2012, employers who furnish 50 or more withholding statements, Form W-2, to employees for calendar year 2011 (due February 28, 2012), are required to file their annual report electronically using Web Upload.
Further information is available at the Virginia Department of Taxation website: http://www.tax.virginia.gov/site.cfm?alias=BusWhatsNew#W2ElectronicFiling
As always, please call if you have questions or need assistance with these matters.