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PTE tax allows an entity taxed as a partnership or S Corporation to make a tax payment on behalf of its partners. The business pays an elective tax of 9.3% of qualified net income to the Franchise Tax Board.
The PTE tax rate is the top marginal individual rate for the year: 6.5% for tax year 2022. The PTE tax is calculated on a resident's share of unapportioned income. Owners of an electing PTE are allowed to claim a credit against their West Virginia individual income tax equal to their share of PTE tax paid.
The Schedule SP is also used to calculate the amount of withholding that is required on each nonresident shareholder's portion of the S corporation's income. All shareholders are subject to West Virginia Personal Income Tax under the provisions of West Virginia Code Chapter 11, Article 21.
The PTE tax rate is the top marginal individual rate for the year: 6.5% for tax year 2022. The PTE tax is calculated on a resident's share of unapportioned income. Owners of an electing PTE are allowed to claim a credit against their West Virginia individual income tax equal to their share of PTE tax paid.
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%. The Elective Pass-Through Entity Tax (PTET) must be filed and paid electronically.
Details on the Form WV4868 extension request / payment voucher and filing criteria. West Virginia also accepts federal Form 4868 as the extension request. West Virginia has a Fail to Pay penalty and a Fail to File penalty, each subject to making payments by a certain due date.
The top income tax rate fell from 6.5% to 5.12% and the lowest rate fell from 3.0% to 3.36%. Heads up, employers! Because of the decreased individual income tax rates, West Virginia released new tax withholding tables for payroll tax withholding.
How to Create an S Corporation in West Virginia Step 1: Choose a name. ... Step 2: Appoint an Agent of Process. ... Step 3: Elect Directors or Managers. ... Step 4: File Articles of Incorporation or Articles of Organization. ... Step 5: File Form 2553 to turn business into an S Corporation.