Virginia Form 500c - Underpayment Of Virginia Estimated Tax By Corporations

*VA500C210000*

InSTRuCTIOnS

PuRPOSe OF FORm

Form 500C is used by corporations to determine whether they

Line 11—Exception 2, Tax on prior year’s income using current

paid enough estimated tax, whether they are subject to the

year’s rates—Generally, this exception applies if the amount

addition to the tax for underpayment of estimated tax, and, if

the corporation paid is equal to or more than the tax figured by

so, the amount of the addition. Estimated tax is a corporation’s

using the current year’s rates but based on the facts shown on

expected income tax liability minus its credits. A corporation

the prior year’s return and the law that applies to the prior year.

must make estimated tax payments if it can reasonably expect

Your prior year’s return does not have to show a tax liability.

its tax liability to exceed $1,000.00 for such taxable year.

Line 12—Exception 3, Tax on annualized income—This

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 have

the months preceding an installment date.

an underpayment on Line 8 (Column a, b, c or d), go to Part II,

A corporation may annualize its income as follows:

Exceptions to the Additional Charge. If you cannot meet any of

(a) For the first 3 months if the installment was required

the exceptions for a payment period, go to Part III, Computation

to be paid in the 4th month.

of the Additional Charge. If you are using Form 500C either to

(b) For the first 3 months or for the first 5 months if the

figure the additional charge or to show that you qualify for any

installment was required to be paid in the 6th month.

exception, attach Form 500C to your Corporate Tax Return.

For additional information, call (804) 367-8037 or write

installment was required to be paid in the 9th month.

the Department of Taxation, P.O. Box 1115, Richmond, VA

(d) For the first 9 months or for the first 11 months if

23218-1115. You can obtain most virginia income tax

the installment was required to be paid in the 12th

forms at

month.

PART I. HOw TO FIguRe yOuR undeRPAymenT

To annualize, multiply taxable income for the period by 12

Complete Lines 1 through 8 in Part I. The instructions for

and divide the result by the number of months in the period

most of these lines are on the form itself. If Line 8 shows an

(3, 5, 6, 8, 9 or 11, as the case may be).

underpayment, complete Part II to see if any of the exceptions

Please attach your computation.

apply.

PART III. COmPuTATIOn OF THe AddITIOnAL CHARge

PART II. exCePTIOnS TO THe AddITIOnAL CHARge

If no exception applies, complete Lines 13 through 17 to

You will not have to pay an additional charge if all of your tax

determine the amount of the additional charge. The charge is

payments (Part II, Line 9) were made on time and are equal to

figured for the period of underpayment at the underpayment

or more than any one of the amounts figured as explained by the

rate determined under Section 6621 of the Internal Revenue

exceptions (Lines 10, 11 and 12) for the same payment period

Code, plus 2%.

(column a, b, c or d).

The exceptions to the additional charge are:

For the purpose of computing the additional charge, the

underpayment rate established for the third month following

Line 10—Exception 1, Prior Year’s Tax—Generally, this exception

the close of the taxable year shall also be applied to the first

applies if the corporation paid an amount equal to or more than

15 days of the fourth month following the close of the taxable

the tax shown on its 2009 return for the previous calendar or

year.

fiscal year. However, the corporation must have filed an income

tax return showing a tax liability for the preceding tax year and

that year must have consisted of 12 months.

Attach Form 500C to Your Virginia Corporation Return, Form 500

vA DEPT OF TAxATION

2601007

REv 7/10

Virginia Form 500c - Underpayment Of Virginia Estimated Tax By Corporations - 2010 Page 2

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