Under Virginia law, pass-through entities (PTEs) can choose to pay Virginia income tax at the entity level, and eligible owners of the PTE can receive corresponding credits. 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%.
Eligible owners of a PTE are:
- Natural persons who are subject to Virginia income tax, or
- Estates or trusts subject to Virginia income tax.
Eligible owners of a PTE that chooses to pay the Elective PTET are entitled to a refundable credit on their individual and fiduciary returns equal to their portion of the amount of tax paid by the PTE.
The Elective Pass-Through Entity Tax (PTET) must be filed and paid electronically. There is no waiver from this electronic filing requirement for the Elective PTET.
File and Pay Online
Entities can file the PTET using:
- Approved tax preparation software, or
- Our free electronic filing option available through your online business account. If you don't already have an account, you can set up an account here.
Beginning with tax year 2023, entities are required to make estimated payments, typically on a quarterly basis.
- Electing PTEs can use our PTET-PMT eForm or ACH credit to make the required payment.
For more information, including estimated payment requirements, please see: