Form 502w - Virginia Pass-Through Entity Withholding Tax Payment Page 2
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2Late Payment Penalty - If the return is filed within the extended
withholding on its Form 502 for such withholding. PTE
period and full payment is not included with the return, the entity
withholding is not “generation skipping” and does not pass
is subject to the late payment penalty of 6% per month from
through an intermediate PTE to owners that are more
the date the return is filed through the date of payment, up to a
than one level of ownership away. If a PTE erroneously
maximum of 30%.
withholds for a nonresident owner PTE, the PTE should file
an amended Form 502. See the Amended Returns section
Interest - Interest is due on any unpaid tax at the underpayment
of the Form 502 instructions for additional information.
rate under IRC § 6621, plus 2%, from the due date until paid.
• Entities exempt by reason of diplomatic immunity or
Change of Address/Out-of-Business - If the PTE changes its
pursuant to treaties between the United States and other
business mailing address or discontinues the business, either
countries. An entity claiming this exemption must provide a
send a completed Form R-3, Registration Change Request or
statement to the PTE stating that it has diplomatic immunity
a letter to the Virginia Department of Taxation, PO Box 1114,
from federal income tax.
Richmond, Virginia 23218-1114. A Form R-3 can be obtained
from the Department’s website, , or by
• Real estate investment trusts (REITs) except Captive
calling the Department’s Forms Request Unit at (804) 367-8037.
REITs.
Questions - If you have any questions about this return, please
• Corporations that are exempt from Virginia income tax
call (804) 367-8037 or write to the Virginia Department of
include:
Taxation, PO Box 1115, Richmond, Virginia 23218-1115.
• Certain banks, insurance companies and public utilities
Preparation of Payment Voucher - Complete the PTE’s FEIN,
that are subject to other taxes in lieu of Virginia income tax.
entity type, North American Industry Classification System
• Corporations that are exempt from federal income tax
(NAICS Code), ending month and year, and name and address
under IRC § 501.
information.
If a nonresident owner claims to be exempt from the withholding
Entity type: A proper entry in this field is required. Enter the
tax, the PTE is required to obtain documentation from the
code that corresponds to the type of entity that is filing this return.
nonresident owner setting forth the basis for such exemption.
Type
Code
This documentation must be retained by the PTE with its records.
S Corporation
SC
The determination of nonresident status will be based on the
owner’s address of record for the PTE unless the PTE has other
General Partnership
PG
information relating to the owner’s residence or commercial
Limited Partnership
PL
domicile by reason of the owner’s participation in management of
Limited Liability Company
LL
the PTE. If an owner is also employed by the PTE, the information
Limited Liability Partnership
LP
relating to withholding on wages shall also be considered.
Other
OB
The PTE shall provide with its return of withholding tax a list of
every individual, corporation and other entity claiming exemption
NAICS code: Enter the 6-digit NAICS code. You can download a
from the withholding tax. The list shall contain the name, Social
list of these codes from the Business Registration Forms section
Security Number, federal employer identification number (FEIN)
on the Department’s website, .
or other taxpayer identification number and the address of each
Determine the amount of withholding due by either:
nonresident owner claiming exemption, as well as a description
(1) Computing the taxable income of the PTE and applying
of the basis for the claimed exemption.
the prorata share of the nonresident owners. Multiply the
Penalties
nonresident income by 5% to calculate the tax liability. Then
Extension Penalty - The PTE must pay at least 90% of the
reduce the tax liability by the owner’s share of any tax credits.
withholding tax due by the return due date to avoid a penalty. If
(2) Computing the taxable income of the individual nonresident
the return is filed within the 6-month extension and less than 90%
owners. Calculate the tax liability of each owner by
of the tax was paid by the original return due date, then the PTE
multiplying taxable income by 5%. Reduce the tax liability
owes an extension penalty. The penalty is 2% per month of the
by the owner’s share of tax credits.
tax due with the return from the due date through the date that
Enter the total amount withheld for all nonresident owners in the
the return is filed, up to a maximum of 12%.
block indicating the amount of payment.
Late Filing Penalty - If the return is filed after the extended due
Declaration and Signature: Be sure to sign, date and enter
date, the extension is not valid, and the entity is subject to the
your phone number in the space indicated.
late filing penalty of 30% or $1,200, whichever is greater.
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