500HS: Home Service Contract Provider Minimum Tax Computation (2024)
Virginia · Virginia Tax · Used for tax years 2024
Virginia Form 500HS calculates the minimum tax for home service contract providers at 2.25% of collected provider fees. It reports tax credits, adjusted corporate income tax, and the comparison used to determine tax liability.
Who files this form
All home service contract providers must complete Form 500HS and Virginia Form 500, including corporations, partnerships, and other types of providers.
A provider is a person contractually obligated to the purchaser under a home service contract. These contracts cover specified service, repair, replacement, maintenance, or related costs for property.
Noncorporate providers must also complete Form 502 and use a pro forma Form 500 to calculate an income tax liability as if they were a corporation.
When it's due
For tax year 2024, Form 500 and Form 500HS are due by the 15th day of the 4th month after the close of the provider’s taxable year.
What you'll need
Have these forms and details ready:
- Virginia Form 500: Complete Lines 1–9 before completing Form 500HS.
- Provider information: Name as shown on the Virginia return, FEIN, and applicable taxable-period dates.
- Collected provider fees and applicable refundable and nonrefundable corporate income tax credit amounts.
- For consolidated or combined filers: The group’s adjusted corporate income tax and the provider’s separately computed adjusted corporate income tax.
- For noncorporate providers: Form 502, a pro forma Form 500, and a schedule listing each entity’s, partner’s, or other person’s name, address, tax identification number, and proportionate share of the provider’s income and credit taxable to them.
- If claiming the Coalfield Employment Enhancement Tax Credit: The applicable amounts from 2024 Form 306D.
How to file
Corporations and pass-through entities must file their annual income tax returns and make tax payments electronically. Include Form 500HS with the electronically filed Form 500 and Form 502, if applicable.
Information about electronic filing and payment is available at www.tax.virginia.gov.
If you cannot file and pay electronically, request a waiver in writing using the Corporation Income Tax Electronic Filing Waiver Request Form. Get the waiver form on the Department’s website or by calling (804) 367-8037.
Transfer Form 500HS, Line 10, to the Home Service Contract Provider section on Page 1 of Form 500.
Common mistakes
- Starting Form 500HS too soon: First compute corporate income tax on Form 500, Lines 1–9.
- Missing noncorporate-provider requirements: Write “RETURN BY NONCORPORATE HOME SERVICE CONTRACT PROVIDER” along the top margin of Form 500 and check the box in its Home Service Contract Provider section.
- Leaving out short-year details: Check the box at the top of Form 500HS, enter the taxable-period dates, and enter the calendar year during which the provider fees were collected.
- Overlooking credit restrictions: Credits labeled “carryover credits only” are limited to carryover credits.
- Missing the additional Form 500 entries: If Form 500HS, Line 10, equals the minimum tax, enter that amount on Form 500, Line 11, and enter $0 on Form 500, Line 10.
Questions people ask
What are collected provider fees?
They are provider fees collected on home service contracts issued to Virginia residents.
Must providers make estimated tax payments?
Yes. Providers must file and pay estimated tax installments whether they will owe the minimum tax or corporate income tax. See Form 500ES for payment information and a schedule, and Form 500C to determine whether enough estimated tax was paid.
How is the minimum tax handled for a short taxable period?
Use fees collected during the calendar year ending within the taxable period. If no calendar year ends within that period, use the most recent calendar year ending before it. Prorate the minimum tax by multiplying it by the number of months in the short taxable year and dividing by 12.
How do corporate filers determine the tax on Line 10?
Separate return filers enter the larger of Line 5 or Line 6. Consolidated or combined filers enter the larger of Line 5 or Line 9.