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Important updates and reminders about the new Pass-Through Entity Tax (PTET)

December 21, 2023
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  2. Important updates and reminders about the new Pass-Through Entity Tax (PTET)

The Virginia Department of Taxation (TAX) released the following pass-through entity (PTE) taxation reminders on Oct. 11, 2023:

During the 2022 Session, the Virginia General Assembly passed legislation that established a Pass-Through Entity Tax (PTET). The PTET return (Form 502PTET) must be filed electronically, and there is no waiver from the electronic filing requirement.

PTET filing and payment requirements vary depending on the tax year. Please review the information below for details and continue to monitor the Virginia Elective Pass-Through Entity Tax page of our website for additional updates.

Tax Year 2023 Filers

  • Beginning with tax year 2023, electing PTEs are required to make estimated payments, typically on a quarterly basis.
  • Electing PTEs can use our PTET-PMT e-form or ACH credit to make the required payment.

Tax Year 2022 Filers

  • The filing extension deadline for calendar year filers is Oct. 16, 2023.
  • Starting in December 2023, we’ll have a new, free electronic filing option available through our online application for businesses. Provided that entities have paid in full by their original due date (April 17, 2023, for calendar-year filers), we’ll waive the $100 minimum late filing penalty for those who use this free online filing option by Feb. 1, 2024.
  • Regardless of when an entity files, we encourage them to pay in full using the PTET-PMT e-form or ACH credit as soon as possible to avoid additional penalties and interest.
  • For more information, see Tax-Bulletin 23-8. 

Tax Year 2021 Filers

  • If they wish to do so, PTEs can now make Tax Year 2021 PTET payments using the PTET-PMT e-form or ACH credit. Any Tax Year 2021 PTET payment made by a PTE will be considered a valid and binding election for Tax Year 2021. However, please note that electing PTEs are not required to pay their Tax Year 2021 PTET now and can wait to pay until they file their Tax Year 2021 PTET return.

Contact TAX at (804) 367.8031 for individual income tax questions and (804) 367-8037 for business tax questions.