Corporation e-File FAQs
Who is required to file and pay electronically?
Every corporation organized under the laws of Virginia, every foreign corporation registered with the State Corporation Commission for the privilege of doing business in Virginia and every corporation having income from Virginia sources (with exceptions stated in the Form 500 instructions) must file through e-File and pay electronically. The requirement does not apply to S corporations or other pass-through entities that currently file Virginia Form 502.
What tax years are accepted in Virginia Corporate e-File?
Virginia’s e-File program will accept the current tax year and two prior years for original returns. For amended returns, the current tax year and one year prior is accepted.
What electronic filing options are available for filing the corporate return?
The Virginia e-File program is the only electronic option offered for filing Virginia Form 500 and the accompanying schedules. This is a Fed/State program that allows the Tax Department to leverage IRS technology in order to receive an electronic copy of the full federal return and accompanying schedules along with the Virginia return when the transmitter (most often the software vendor) electronically transmits the federal and state returns simultaneously. This is considered a “linked” transmission.
If filed electronically, is the due date still the same for corporate returns?
A corporate 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.
Should a corporate return be electronically filed if there is no income or tax liability?
Yes, all corporate income tax returns must be filed electronically, regardless of the income or tax liability.
Are tax professionals subject to the electronic filing requirement?
Yes, tax preparers who prepare corporate returns must ensure compliance with the electronic filing and payment requirements.
Who provides authorization to file corporation returns electronically?
Acceptance by the IRS as an Electronic Return Originator (ERO) automatically qualifies tax professionals to submit Virginia corporate income tax returns electronically. They must register with the IRS and be accepted as an ERO. The IRS assigns each ERO an Electronic Filer Identification Number (EFIN). After being accepted as an ERO, the tax professional can submit returns. For more details, visit the IRS website www.irs.gov.
How do I send my documents with the electronic return?
It is strongly recommended that corporations use either a desktop scanner or software that supports the ability to produce a PDF. If not already owned, both can be obtained at very reasonable prices. The ability to produce a PDF is necessary in order for a corporation to attach its federal return or other 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 income tax return. Corporate income tax returns must be signed electronically. There are two methods for signing corporate income tax returns electronically. Details for the electronic signature are located in the 2012 Corporate e-File Preparers and Electronic Return Originators Handbook.
What are my payment options?
Per the table below, there are multiple options that corporations can choose to make their return, estimated and extension payments. Review the links below to learn more about each option.
|Electronic Payment Options||Tax Due Payment||Estimated Tax Payment||Filing Extension Payment|
|Corporate e-File - direct debit through purchased e-File software programs||Yes||No||No|
|eForms - free online option||No||Yes||Yes|
|Business iFile - free online option||No||Yes||Yes|
|ACH Credit Transactions - through the corporation's bank||Yes||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 Tax Department as a domestic transaction, it may be rejected by the bank, subjecting the customer to late penalties. By instructing the Tax Department to process the electronic banking transactions contained in your submission, you are certifying 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.
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.
How do I extend the Virginia Corporate return with e-File?
An automatic 6 month filing extension is given for filing Form 500. No request is required. The extension provisions do not apply to payment of any tax that may be due with Form 500. To avoid penalties, Form 500 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 corporate 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 corporate 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 corporate return electronically?
There is no charge to e-File with the Tax Department; however, corporations or their tax preparers must purchase commercial software in order to file through Virginia’s Corporation e-File program. Product choices include online programs, off the shelf and professional programs for tax preparers.
Where do I find Virginia approved corporate e-File software vendors?
Approved e-File software vendors are listed on our Corporate e-File webpage here.
What happens if software is purchased and it does not support the Virginia e-File program?
If the corporation’s current software vendor does not support the Virginia e-File program, a waiver will be granted for the Taxable Year 2012 return. However, it is the corporation’s responsibility to either source a new software product that does support the Virginia e-File program or contact its software vendor and request that the vendor support the e-File program for Taxable Year 2013.
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. 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.
Are tax preparers eligible for a waiver?
Yes. A tax preparer who cannot comply by January 2013 may request a hardship waiver on behalf of any affected client. In cases involving multiple clients, the preparer can submit one Waiver Request Form for all the affected clients by attaching a list of the corporation Names and FEINs, and indicating whether the preparer has a Power of Attorney on file for each client with the Department of Taxation.
Will a waiver be granted if the corporate federal return cannot be submitted via the IRS e-File program?
No. The Virginia e-File program will accept PDF attachments to ensure that all corporations have the ability to file electronically, even if the IRS e-File program does not yet support the federal return filed by the corporation. The corporation can use the same tax preparation software to prepare both the federal and state return. The state return can be transmitted electronically by itself and the federal return can be attached to the state return as a PDF document.
Can a permanent waiver be granted?
No, the requirement cannot be permanently waived. Arrangements must be made to comply with the electronic filing and payment requirements for Taxable Year 2013. However, if an additional waiver for Taxable Year 2013 is needed, submit a new Waiver Request before the due date for filing the return. Customers must request a waiver each year until they have the means to file electronically.
Last Updated 1/14/2013 16:58