Form 500c - Underpayment Of Virginia Estimated Tax By Corporations - 2015 Page 2
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1
22015 Instructions for Schedule 500C
Line 11 - Exception 2, Tax on prior year’s income using
PuRPOSe OF FORm
current year’s rates - generally, this exception applies if the
form 500C is used by corporations to determine whether they
amount the corporation paid is equal to or greater than the
paid enough estimated tax, whether they are subject to the
tax figured by using the current year’s rates but based on the
addition to the tax for underpayment of estimated tax, and, if
facts shown on the prior year’s return and the law that applies
so, the amount of the addition. Estimated tax is a corporation’s
to the prior year. Your prior year’s return does not have to
expected income tax liability minus its credits. A corporation
show a tax liability.
must make estimated tax payments if it reasonably expects
Line 12 - Exception 3, Tax on annualized income - This
its tax liability to exceed $1,000.00 for the taxable year.
exception applies if the estimated tax paid was equal to or
HOw TO uSe THIS FORm
more than 90% of the amount the corporation would owe if
Complete part I of form 500C to find out if you have an
estimated tax was figured on annualized taxable income for
underpayment for any of the four payment periods. If you
the months preceding an installment date.
have an underpayment on Line 8 (Column a, b, c or d), go
A corporation may annualize its income as follows:
to part II, Exceptions to the Additional Charge. If you do not
(a) for the first 3 months, if the installment was required
meet any of the exceptions for a payment period, go to part
to be paid in the 4th month.
III, Computation of the Additional Charge. If you are using
(b) for the first 3 months or for the first 5 months, if the
form 500C either to figure the additional charge or to show
installment was required to be paid in the 6th month.
that you qualify for any exception, attach your computation
(c) for the first 6 months or for the first 8 months, if the
to your Corporate Income Tax return.
installment was required to be paid in the 9th month.
(d) for the first 9 months or for the first 11 months, if the
Amended ReTuRn
installment was required to be paid in the 12th month.
If an amended corporation return, form 500, is filed, there
To annualize income, multiply taxable income for the period
is no adjustment allowed to the amount of addition to tax
by 12 and divide the result by the number of months in the
previously computed and paid.
period (3, 5, 6, 8, 9, or 11, as the case may be).
For additional information, call (804) 367-8037, write
Please attach your computation.
to the Virginia department of Taxation, PO Box 1115,
Richmond, VA 23218-1115, or visit the Department’s website,
PART III. COmPuTATIOn OF THe AddITIOnAL CHARge
If no exception applies, complete Lines 13 through 17 to
determine the amount of the additional charge. The charge is
PART I. HOw TO FIguRe yOuR undeRPAymenT
figured for the period of underpayment at the underpayment
Complete Lines 1 through 8 in part I. On Line 4, be sure to
rate determined under IrC § 6621, plus 2%.
include any withholding payments made by a pass-through
entity on behalf of the corporation. If Line 8 shows an
for the purpose of computing the additional charge, the
underpayment, complete part II to see if any of the exceptions
underpayment rate established for the third month following
apply.
the close of the taxable year shall also be applied to the first 15
days of the fourth month following the close of the taxable year.
PART II. exCePTIOnS TO THe AddITIOnAL CHARge
Line 17 - Total Columns 16 (a) through (d). If cents was used
You will not have to pay an additional charge if all of your
in computing the addition to tax on Line 16, the total on Line
estimated tax payments (part II, Line 9) were made on time
17 should be rounded to the nearest whole dollar amount.
and were equal to or more than any one of the amounts figured
Enter the total here and on form 500, Line 20.
as explained by the exceptions (Lines 10, 11, and 12) for the
same payment period (Column a, b, c, or d).
The exceptions to the additional charge are:
Line 10 - Exception 1, prior Year’s Tax - generally, this
exception applies if the corporation paid an amount that was
equal to or more than the tax shown on its previous (2014)
calendar or fiscal year return. however, the corporation must
have filed an income tax return showing a tax liability for
the preceding taxable year and that taxable year must have
consisted of 12 months.
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