Under Virginia law, pass-through entities (PTEs) can choose to pay Virginia income tax at the entity level, and eligible owners of the PTE can receive corresponding credits. The general effect of this is to transfer the Virginia income tax liability on the PTE’s income from the PTE’s eligible owners to the PTE itself. Electing PTEs are taxed at a rate of 5.75%.
Eligible owners of a PTE are:
- natural persons who are subject to Virginia income tax, or
- estates or trusts subject to Virginia income tax.
Eligible owners of a PTE that chooses to pay the Elective PTET are entitled to a refundable credit on their individual and fiduciary returns equal to their portion of the amount of tax paid by the PTE.
The Elective Pass-Through Entity Tax (PTET) must be filed and paid electronically. There is no waiver from this electronic filing requirement for the Elective PTET. Please find a list of approved software products here.
For Tax Year 2021, 2022, and 2023 filers, a free electronic filing option is now available through your online business account. Tax Year 2021 returns must be filed using this option.
Payment requirements and filing options vary depending on the tax year
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 eform or ACH credit to make the required payment.
- Entities can file the Tax Year 2023 PTET using:
- approved tax preparation software, or
- our free electronic filing option available through your online business account. If you don't already have an account, you can set up an account here.
Tax Year 2022 Filers
- The filing extension deadline for calendar year filers was October 16, 2023.
- We have a free electronic filing option available through your online business account. If you don't already have an account, you can set up an account here.
- Regardless of when an entity files, we encourage them to pay in full by their original due date to avoid penalties and interest. If the entity has not paid in full by their original due date, we encourage them to pay in full as soon as possible to reduce any additional penalties or interest. Payments can be made using the PTET-PMT eform or ACH credit.
Tax Year 2021 Filers
- We have a free electronic filing option available through your online business account. If you don't already have an account, you can set up an account here.
- PTEs can make Tax Year 2021 PTET payments using the PTET-PMT eform 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.
For more information, including estimated payment requirements, please see: