Pass-Through Entity e-File FAQs
What tax years are accepted in Virginia Pass-Through Entity (PTE) e-File?
Virginia's e-File program will accept the current tax year for original returns and amended returns.
What electronic filing options are available for filing the PTE return?
The Virginia e-File program is the only electronic option offered for filing Virginia Form 502 and the accompanying schedules. This Federal/State program allows Virginia to use IRS technology to receive an electronic copy of the full federal return, the accompanying federal schedules and the Virginia return. Virginia does not receive the electronic copy if the data is rejected at the federal IRS level.
It is considered a "Linked" submission when the transmitter (most often the software vendor) electronically transmits the federal and state returns simultaneously via e-File. The other submission type supported is referred to as "Unlinked" or a "state only" submission, when the state return is sent separately from the federal return. The state only submission is still e-Filed via the federal IRS level before Virginia receives the electronic copy.
Is it required to file PTE returns electronically?
No, there is no requirement to file your PTE return electronically.
If filed electronically, is the due date the same for PTE returns?
A PTE return is due on or before the 15th day of the fourth month following the close of the taxable year, regardless if filed electronically or by paper.
Does Virginia have a "perfection period" for rejected submissions?
Virginia does not follow the IRS return perfection period. A return MUST be transmitted and accepted by the due date of the return to be considered timely filed.
Who provides authorization to file PTE returns electronically?
Acceptance by the IRS as an Electronic Return Originator (ERO) automatically qualifies tax professionals to submit Virginia PTE income tax returns electronically. They must register with the IRS and be accepted as an ERO. The IRS then assigns each ERO an Electronic Filer Identification Number (EFIN) and then the tax professional can submit returns via e-File. Depending on the e-File option chosen, an Electronic Transmitter Identification Number (ETIN) may be needed. For more details, visit the IRS website.
Does the size of the PTE impact the electronic filing options?
Small PTEs may use an online software provider to avoid having to register with the IRS for an EFIN.
Large PTEs must decide whether to use an ERO or to prepare/e-File the return themselves. If e-Filing themselves, the PTE may have to register with the IRS to obtain an EFIN and possibly an ETIN (depending on the e-File option chosen).
How do I send my documents with the electronic return?
It is strongly recommended to use either a desktop scanner or software that is able to produce a PDF. If not already owned, either can be obtained at reasonable prices. The ability to produce a PDF is necessary in order for a PTE to attach required documentation, such as credit certifications, to the Virginia electronic return transmission.
Is there a signature requirement for e-filed returns?
As with a return submitted to the IRS on paper, the customer and paid preparer (if applicable) must "sign" an electronic PTE income tax return. The two methods for signing PTE income tax returns electronically are detailed in the 2013 Corporate and PTE e-File Preparers and Electronic Return Originators Handbook.
What are my payment options?
There are multiple options that PTEs can choose to make their return, estimated and extension payments. Review each link below to learn more.
|Electronic Payment Options||Tax Due Payment||Estimated Tax Payment|
|PTE e-FIle - direct debit through purchased e-File software programs||Yes||No|
|eForms - free online option||Yes||Yes|
|ACH Credit Transactions - through the corporation's financial institution||Yes||Yes|
Does Virginia accept electronic payments that are withdrawn from a non-US Financial institution?
No. All remittances must be from a bank in the United States. Federal banking regulations have imposed additional reporting requirements on all electronic banking transactions that directly involve a financial institution outside of the territorial jurisdiction of the US at any point in the process. These are called International ACH Transactions (IAT), which the Virginia Tax Department does not support.
If an IAT is processed by the Virginia Tax Department as a domestic transaction, the bank may reject it and subject the customer to late penalties. By instructing the Virginia Tax Department to process the electronic banking transactions contained in your submission, you certify that the transactions do not directly involve a financial institution outside of the territorial jurisdiction of the US at any point in the process. If any transaction is IAT, payment will need to be made by ACH Credit instead.
How do I get an extension for the Virginia PTE return with e-File?
An automatic 6-month filing extension is given for filing Form 502. No request is required. The extension does not apply to any tax payment due with Form 502. To avoid penalties, Form 502 filers must pay at least 90% of their final tax liability by the original due date for filing the return.
Can a return be amended through PTE e-File?
Yes. The "amended return" indicator must be marked on the return within the software package. An explanation of any changes made must be documented with the e-File submission, including any supporting forms or schedules.
Can a final return (business is closed/dissolved) be submitted via PTE e-File?
Yes. Ensure the "final return" indicator is marked on the return within the software package before submitting it.
What is the cost for filing a PTE return electronically?
There is no charge to e-File with the Virginia Tax Department; however, PTEs (or their tax preparers) must purchase commercial software in order to file through Virginia’s PTE e-File program. Product choices include online programs, off-the-shelf programs and professional programs for tax preparers.
Where do I find Virginia approved PTE e-File software vendors?
Approved e-File software vendors are listed on our PTE e-File webpage here.
Can a company develop their own software program for filing returns electronically?
Commercial software products are specifically designed to IRS and Virginia specifications and are put through rigorous testing by both agencies before being approved. They must also apply to the IRS to obtain an EFIN and/or ETIN.
A company that wishes to develop its own software program must obtain approval from the Department of Taxation before implementing its own program. While the Tax Department strongly discourages this practice, exceptions may be made in extreme cases. Requests for approval may be sent to Bus_eFile@tax.virginia.gov.