Tax Information Regarding Estimated Tax Declaration for Corporations in Virginia

Virginia requires companies with an estimated tax liability of more than $1,000 to file estimated payments.

The state of Virginia requires essentially all corporations that are incorporated under Virginia law or that receive Virginia-sourced income to file a Virginia corporation income tax return. Nonprofit organizations must also file if they earn unrelated business taxable income, as defined at the federal level. Certain business must also file estimated tax vouchers and payments.

Who Must File

All corporations that are subject to Virginia income tax must file a declaration of estimated income tax for the taxable year if the corporation expects its state tax liability to exceed $1,000. An affiliated group that files a consolidated or combined return is considered a single entity for purposes of meeting this threshold.

When to File

The filing date and amount due depend upon when the company first expects its liability to exceed the threshold. If the requirement is first met before the fourth month of the taxable year, the declaration should be filed no later than the 15th day of the fourth month of the taxable year. Four installments of 25 percent of the estimated total liability should be made on the 15th day of the fourth, sixth, ninth, and 12th months of the taxable year.

If the requirement is first met before the sixth month of the taxable year, the declaration should be filed no later than the 15th day of the sixth month of the taxable year. Three installments of 33 1/3 percent should be made on the 15th day of the sixth, ninth, and 12th months of the taxable year.

If the requirement is first met before the ninth month of the taxable year, the declaration should be filed no later than the 15th day of the ninth month of the taxable year. Two installments of 50 percent should be made on the 15th day of the ninth and 12th months of the taxable year.

If the requirement is not met until after the eighth month but before the 12th month of the taxable year, the full estimated amount should be filed with the declaration no later than the 15th day of the 12th month of the taxable year.

How to File

The Virginia declaration of estimated income tax is made on Form 500ES. The form and any payment should be mailed to the Virginia Department of Revenue, P.O. B0x 1500, Richmond, VA, 23218-1500. If the corporation has an average monthly liability of more than $20,000, estimated payments must be made by electronic funds transfer. Corporations with liabilities that do not exceed this amount may also pay by EFT, but are not required to do so. Estimated tax payments can be scheduled online at www.tax.virginia.gov/business.

Tax Rate

The Virginia corporate tax rate is 6 percent of all computed Virginia taxable income. If a company conducts business in multiple states, it must allocate its Virginia taxable income using Virginia Schedule 500A.

References

• Virginia.gov: Corporate Income Tax
• Commonwealth of Virginia: Corporation Estimated Income Tax Payment Vouchers