The automatic six-month extension to file Corporate Income Tax returns for the taxable year ending on May 31, 2012, ends on March 15, 2013. In order to take advantage of Virginia's automatic extension, the return must be filed on or before the end of the extension period.  

The 2012-2014 Appropriations Act (Item 273 of House Bill 1301, 2012 Special Session I, Chapter 3) requires all corporations to file their estimated tax payments, annual income tax returns, and final payments electronically, beginning on January 1, 2013. This includes Taxable Year 2012 returns, tax due payments, and extension payments, as well as Taxable Year 2013 estimated payments.

• The annual Corporate Income Tax return must be filed through the Federal/State e-File program, which is supported by numerous commercial software applications. For a list of approved commercial e-File software and more information regarding electronic filing, visit the Corporate Income Tax page of the Department's website.
• Tax due payments can be made through the e-File system as a direct debit or by an ACH Credit transaction initiated through the corporation's bank.
• The Department provides two secure online options for electronically submitting estimated and extension payments: e-Forms and Business iFile. For more information regarding these payments and to determine the method that works best for you, visit "Estimated and Extension Payments" on the Corporate Income Tax page of the Department's website.  Estimated Tax payments and Extension payments can also be submitted by an ACH Credit. 

Corporations unable to file and pay electronically by the effective date may request a waiver.  

Below are some of the more common problems that the Department encounters with corporate income tax returns.

• Use the proper return based on the entity type.  Corporations should file Form 500 whereas a pass-through entity should file Form 502. Also, choose the correct year's form for the return being submitted. All forms and instructions, including those for prior taxable years, are located on the Department's website.
• Always notify the Department and the State Corporation Commission of any corporate name changes. If the corporate name has changed from the name used on the last return filed, please check the "Name Change" box on the return to notify the Department.
• If the physical address or mailing address is different from the address used on the last return filed, please check the applicable "Address Change" box.
• Please be sure to verify that the nine-digit Federal Identification Number (FEIN) was entered correctly on the return and that it is the correct number assigned to the corporation.
• If you claim a subtraction, deduction or a credit, please be sure to attach the supporting schedule, such as Schedule ADJ or Schedule CR, to the return.  Also, provide any additional supporting documentation that is required , such as tax-credit certificates or statements.
• If estimated payments or extension payments are claimed on the return, please verify the amount of estimated or extension payments made during the year before filing the return.
• If you are claiming a subtraction, deduction, or contribution, please be sure to enter the valid codes on the Schedule ADJ.
• When submitting a paper tax return, ensure that the front and back pages are both sent (even if there are no entries on the back page).  Please note the new electronic filing requirement above.
• If the corporate return that you are submitting is a "final return," please do not request an overpayment credit. Request a refund instead.

Corporations subject to state income tax must make a declaration of Estimated Income Tax for the taxable year if the corporation's state income tax for the same period, reduced by the allowable tax credits, can be expected to exceed $1,000.

Taxpayers filing on a fiscal year or calendar year basis should follow the declaration and payment schedule in the table accessed with the link below.  A declaration of Estimated Income Tax is not required for a period of less than twelve months if the period is less than four months or the filing requirements are first met after the first day of the last month in the short taxable year.

Compute taxable income for the short taxable period on an annual basis by multiplying the income amount by twelve and dividing the result by the number of months in the short period. You are not required to annualize your income if the short taxable year does not change your accounting period.

As a general rule, pass-through entities are required to withhold tax on the Virginia taxable income that they pass through to their nonresident owners.  The Department offers the following tips for reporting the pass-through entity withholding taxes on Form 502:

• The tax payment for Taxable year 2012 is due on or before April 15, 2013 for any pass-through entity that files on a calendar year basis, even if the entity takes advantage of the automatic six-month filing extension for its Form 502.

• The tax is reported and reconciled on Page 2, Section 1, of Form 502.
  • On Line 1, enter the total tax actually withheld for nonresident owners.  Do not include tax amounts that would have been withheld for owners who are exempt from the withholding requirement, or personal estimated tax payments made by the owners themselves.
  • Line 2 must be completed if the Form 502 is being filed after the original due date (April 15 for calendar year filers).  Use this line to report the tax that was paid prior to filing Form 502.
  • Line 3 will reflect an overpayment if the payment amount on Line 2 is greater than the tax liability reported on Line 1.  If Line 2 is less than Line 1, enter the balance of tax due on Line 4.
  • If the return is filed after April 15 and the amount of tax due reported on Line 4 represents more than 10 percent of the total tax liability reported on Line 1, the entity may be subject to a penalty.

For complete information on the withholding requirements for pass-through entities, see the Instructions for Form 502 on the Department's website.

The Department receives numerous tax returns containing an enclosed "proof of receipt" letter and postage-paid envelope that ask the Department to return the letter as proof of receipt.  Unfortunately, the Department does not have the staff to handle this additional workload and is unable to acknowledge receipt of packages or shipments sent outside of standard mail services designed to accomplish this. 

If you would like your return, letter or package tracked, the Department recommends that you use courier services, or mail methods that specialize in mail tracking.  Be aware that if you choose Certified Mail, there will be a delay in the Department's receipt of your item(s).