500HS: Home Service Contract Provider Minimum Tax Computation (2025)
Virginia · Virginia Tax · Used for tax years 2025
Virginia Form 500HS computes the minimum tax for home service contract providers at 2.25% of collected provider fees. It compares that minimum tax with adjusted corporate income tax and determines the tax liability to report on Form 500.
Who files this form
All home service contract providers are subject to the minimum tax and must complete both Form 500HS and Virginia Form 500. This includes corporations, partnerships, and other types of providers.
A provider is a person contractually obligated to the purchaser under a home service contract.
Noncorporate providers must also complete Form 502 and use a pro forma Form 500 to calculate income tax as if they were a corporation for comparison with the minimum tax.
When it's due
For tax year 2025, 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 figures ready:
- Form 500, Lines 1–9: Compute corporate income tax before completing Form 500HS.
- Tax credit amounts: Include applicable refundable and nonrefundable corporate income tax credits.
- Collected provider fees: Fees collected on home service contracts issued to Virginia residents.
- Name and FEIN: Use the name shown on the Virginia return.
- 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, partner, or other person’s name, address, tax identification number, and proportionate share of the provider’s income and credit taxable to them.
- For short-year filers: The calendar year during which the provider fees used in the calculation were collected.
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.
Electronic filing and payment information 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.
Common mistakes
- Missing the noncorporate notation: Partnerships and other noncorporate providers must write “RETURN BY NONCORPORATE HOME SERVICE CONTRACT PROVIDER” along the top margin of Form 500.
- Missing short-year information: Check the box at the top of Form 500HS and enter the calendar year during which the provider fees were collected.
- Overlooking credit restrictions: Use only carryover credits for credits labeled “carryover credits only.”
- Not transferring the result: Enter Form 500HS, Line 10, in the Home Service Contract Provider section on Form 500, Page 1. Noncorporate providers must also check the box in that section.
- Skipping estimated payments: Providers must file and pay estimated tax installments whether they will owe minimum tax or corporate income tax.
Questions people ask
How is the minimum tax calculated?
Multiply collected provider fees by 2.25% (0.0225). Special rules apply to short taxable periods.
How do corporate filers compare the minimum tax with income tax?
Separate return filers enter the greater of Line 5 or Line 6 on Line 10. Consolidated or combined filers enter the greater of Line 5 or Line 9.
What changes for a taxable period shorter than 12 months?
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.
Where can I find estimated tax guidance?
See Form 500ES for estimated payment filing information and a payment schedule. See Form 500C to determine whether enough estimated tax has been paid.