VSCPA Requests Penalty Relief be Granted for Nonresident Withholding Payments on Pass Through Entities
May 28, 2020
After consultation with our Tax Advisory Committee, the VSCPA sent a letter to Virginia’s Tax Commissioner Craig M. Burns on May 26, 2020 to request that penalty relief be granted for nonresident withholding payments on pass through entities (PTEs) which were due on April 15.
The Virginia Department of Taxation (TAX) considers the PTE withholding payments to be conceptually similar to the employer withholding tax. However, we heard from many members who view PTE withholding as individual income tax payments. Given the uncertainty and confusion created by the COVID-19 crisis, we felt it would be appropriate to allow penalty relief for those who reasonably relied on Tax Bulletin 20-4 in taking advantage of the payment extension.
The VSCPA will continue to work with our state and federal partners to make sure you, and all Virginia taxpayers, are up to date on this fast-moving situation.
UPDATE: The Tax Department replied to our letter with guidance here.