My corporation has elected S-status for federal purposes. How can I elect S-status for Virginia purposes?
Virginia law recognizes the federal S-election. No separate election is needed at the state level.
My corporation is an S-corporation; therefore, I file only an information return for federal purposes. Do I have to file a Virginia return?
Yes. Every corporation organized under the laws of Virginia, including S-corporations and foreign corporations registered with the State Corporation Commission for the privilege of doing business in Virginia, and corporations having income from Virginia sources, must file a return with Virginia Tax each year. For most corporations, the due date for filing is the 15th day of the 4th month following the close of the corporation's taxable year. S-corporations file an information return on Form 502.
We are shareholders in an S-corporation that is being taxed as a pass-through entity and has income from Virginia sources. We don't live in Virginia and this is the only Virginia source income we receive. Can the corporation file on our behalf, or do we each have to file a separate nonresident return?
The S-corporation may file a single composite income tax return (Form 765) on behalf of its qualified nonresident shareholders in lieu of such owners filing separate nonresident returns. For the S-corporation to include a nonresident owner on a composite return, such owner must consent to be included on the composite return. For complete instructions on composite filing, see Form 765 and the Form 765 instructions, Schedule L, and the Guidelines for Pass-Through Entity Withholding (Public Document 15-240).
Our organization is exempt from income tax under Internal Revenue Code Section 501(c). Do we need to file a Virginia corporation income tax return?
As a tax exempt organization, you are required to file a Virginia corporation income tax return, Form 500, only if you must file federal Form 990-T to report unrelated business taxable income. The Virginia return is due to be filed by the 15th day of the 6th month following the close of your taxable year. If you file only Form 990 for federal purposes, no Virginia return is required.
We are a foreign corporation that does business in Virginia. Is there a special return for foreign corporations?
No. If your corporation is an S-corporation, use Virginia Form 502; otherwise, use Virginia Form 500. In either case, use Schedule A to allocate and apportion the corporation's income to determine the amount subject to Virginia income tax.
Our corporation has its headquarters in Maryland, and had a branch office in Virginia for several years. We closed the Virginia office 3 months into our current taxable year. How can we file a part-year income tax return?
Virginia law does not provide for part-year filing by a corporation when its federal return will reflect a full taxable year. You should file your return on Virginia Form 500, and use Schedule A to compute your Virginia taxable income.
I filed my corporation income tax return on extension with full payment for the tax due, but I still received a bill for extension penalty and interest. Doesn't having an extension mean that no penalty will be assessed?
Not always. An extension of time extends only the due date for filing your return, not the due date for paying the tax. Unless you pay at least 90% of the tax by the original filing due date, you will be subject to an extension penalty. In addition, you will be subject to interest on any balance of tax due with your return, regardless of whether the 90% requirement was met. For further information, refer to our Penalties and Interest page.
My corporation is a member of an affiliated group that files a consolidated federal return. Until this taxable year, we were the only group member doing business in Virginia, so we filed a separate return. During the year another group member, Corporation B, began doing business in Virginia. Can we elect to file a consolidated Virginia return, or will we need to request permission from the Tax Commissioner?
Because this is the first taxable year for which you would be eligible to file in Virginia with another member of your affiliated group, as long as you meet the requirements set forth in 23 VAC 10-120-320, you may elect to file a consolidated Virginia return. The election will be binding for you and Corporation B, as well as any group members who begin doing business in Virginia, for a period of at least 20 taxable years.
My corporation was recently acquired by the parent of an affiliated group that files a consolidated return in Virginia. Will we need to request permission from the Tax Commissioner to be included in the consolidated return?
No. The consolidated filing election of the affiliated group is binding on members who join the group after the election is made. Therefore, your corporation must be included in the group's consolidated Virginia return.