500C: Underpayment of Estimated Tax by Corporations (2024)
Virginia · Virginia Tax · Used for tax years 2024
Virginia Form 500C is used by corporations and electing pass-through entities to determine whether they paid enough estimated tax for 2024. It calculates underpayments, checks exceptions to an additional charge, and figures any charge due.
Who files this form
Form 500C is used by corporations filing Form 500 and electing pass-through entities (PTEs) filing Form 502PTET. It determines whether enough estimated tax was paid and whether an additional charge applies.
A corporation or electing PTE must make estimated tax payments if it reasonably expects its tax liability to exceed $1,000 for the taxable year. Estimated tax is expected income tax liability minus credits.
If you use Form 500C to calculate an additional charge or show that you qualify for an exception, include your computation with Form 500 or Form 502PTET.
When it's due
For the 2024 taxable year, estimated tax installments are due on the 15th day of the 4th, 6th, 9th, and 12th months of your taxable year. Enter those dates in Part I.
For the 2024 underpayment charge calculation, Line 14 uses the payment date or the 15th day of the 4th month after the close of your taxable year, whichever is earlier.
The text does not state a separate filing deadline for Form 500C.
What you'll need
Have the information needed to complete the form:
- Your name, FEIN, mailing address, and taxable-year dates.
- Income tax and allowable nonrefundable and refundable credits.
- Estimated tax payments and credits for each installment period, including payment dates.
- Any 2023 overpayment credited toward 2024 estimated tax.
- Any withholding payments made by a PTE on behalf of the corporation.
- Your prior-year return if using a prior-year exception.
If using the annualized-income exception, enclose your computation. If you made more than one payment for an installment, enclose a schedule with a separate computation for each payment.
How to file
- Complete Part I, Lines 1 through 8, to check each installment period for an underpayment.
- If Line 8 shows an underpayment, complete Part II to see whether an exception applies.
- If no exception applies for a period, complete the applicable portions of Part III, Lines 13 through 17.
- Round the total charge on Line 17 to the nearest whole dollar. Also enter it on Form 500, Line 20, or Form 502PTET, Section IV, Line 16.
- Include your computation with Form 500 or Form 502PTET if you use Form 500C to calculate the charge or claim an exception.
The address printed at the top of Form 500C is:
Department of Taxation
P.O. Box 1500
Richmond, VA 23218-1500
The text does not provide e-filing instructions.
Common mistakes
- Leaving out PTE withholding. Include withholding payments made by a PTE on behalf of the corporation on Line 4.
- Omitting required computations. Enclose the annualized-income computation when using Exception 3. If an installment had multiple payments, enclose a separate computation for each payment.
- Failing to carry forward an installment overpayment correctly. Apply the amount exceeding all prior underpayments as a credit against the next installment.
- Forgetting to round or transfer the total charge. Round Line 17 to the nearest whole dollar and enter it on the specified line of Form 500 or Form 502PTET.
- Using the wrong taxable-year dates. Fiscal-year and short-year filers must enter their beginning and ending dates and check the box provided.
Questions people ask
Does an underpayment always result in an additional charge?
No. No additional charge applies for an installment if, by its due date, payments met the minimum amount under one of the exceptions in Part II.
What is required for the prior-year tax exception?
You must have filed a return showing a tax liability for the preceding taxable year, and that year must have consisted of 12 months. Timely payments must meet the applicable amounts for each installment period.
How do I annualize income for Exception 3?
Multiply taxable income for the applicable period by 12, then divide by the number of months in that period. The form lists the permitted periods for each installment. Enclose your computation.
How is the additional charge calculated?
It is based on the underpayment amount and the number of days it remained unpaid, using the underpayment rate established under IRC § 6621 plus 2%.
Can an amended return change an additional charge already paid?
The text states that filing an amended return does not allow an adjustment to the addition to tax previously computed and paid.