502 VK-1: Owner's Share of Income and Virginia Modifications and Credits (2024)
Virginia · Virginia Tax · Used for tax years 2024
The 2024 Virginia Schedule VK-1 reports a pass-through entity owner’s share of income, deductions, Virginia additions and subtractions, and tax credits. It also reports income allocation and apportionment information and amounts withheld by the entity for the owner.
Who files this form
Schedule VK-1 reports an owner’s share of a pass-through entity’s income, Virginia modifications, and credits.
The form’s notice says you received this schedule because the entity passed Virginia-source income through to you. Virginia-source income is subject to Virginia taxation regardless of where you live or where your business is based. You may need to file a Virginia income tax return even if you are a nonresident.
The notice directs you to consult a tax professional to determine whether you must file a Virginia income tax return.
What you'll need
The 2024 schedule calls for:
- The owner’s name, address, and FEIN or SSN, plus the entity’s name, address, FEIN, and taxable year-end date.
- The date the owner acquired an interest, owner entity and participation type codes, participation percentage, withholding amount, and any withholding exemption code.
- The owner’s income, deductions, tax-exempt interest, Virginia additions and subtractions, and credits.
- Figures from the entity’s Schedule 502A for allocation and apportionment.
Use the Form 502 instructions for addition and subtraction codes. If you have more additions or subtractions than Schedule VK-1 allows, enclose Schedule SVK-1 and check the box on Schedule VK-1.
For credit guidance, the form points individuals to Schedule CR instructions and corporations to Schedule 500CR instructions. Individual owners with taxes paid to other states are directed to Schedule OSC instructions. Certain Coalfield Employment Enhancement Tax Credit entries use amounts from 2024 Form 306D.
Common mistakes
- Assuming nonresidents have no Virginia filing obligation. The notice says you may need to file a Virginia income tax return even if you live or operate a business outside Virginia.
- Leaving out extra additions or subtractions. Use Schedule SVK-1 when Schedule VK-1 does not have enough space, check the box, and enclose that schedule.
- Overlooking the referenced instructions. Use Form 502 instructions for addition and subtraction codes. For credits, review the applicable Schedule CR, Schedule 500CR, or Schedule OSC instructions.
- Using the wrong Research and Development Expenses Tax Credit line. Part I, line 22 is for taxpayers who do not qualify for a refundable credit.
Questions people ask
Why did I receive Schedule VK-1?
The notice says the pass-through entity earned Virginia-source income and passed a portion of it through to you based on your ownership. A copy of the schedule has been filed with the Department.
Could I need to file a Virginia return if I live outside Virginia?
Yes. The notice says you may be required to file even if you are a nonresident individual or a business based outside Virginia. It directs you to consult a tax professional to determine your filing requirement.
What if I have more additions or subtractions than the schedule allows?
Use Schedule SVK-1, check the box on Schedule VK-1, and enclose Schedule SVK-1.
Where can I get Virginia tax information and forms?
The notice lists www.tax.virginia.gov. You can also call the Department at (804) 367-8031 for individuals or (804) 367-8037 for businesses.