West Virginia has a structured taxation system that applies differently to corporations and pass-through entities. C corporations are taxed directly on their state income, while pass-through entities like S corporations, partnerships, LLCs, and LLPs transfer income and deductions to owners, who report them individually. Both categories are required to meet specific filing deadlines, make estimated tax payments, and comply with state-imposed interest and penalty provisions.
This blog provides a detailed explanation of how taxation works in West Virginia. It covers Corporate Income Tax and Pass through Entity Tax, including filing requirements, due dates, extension rules, estimated tax obligations, and penalty structures.
Corporate Income Tax
The Corporation Income Tax in West Virginia applies to every domestic or foreign corporation that benefits from the privileges and protections of the state’s laws, or derives income from property, activity, or sources in West Virginia.
The corporate tax rate in West Virginia is 6.5%.
Electronic Filing: Taxpayers with annual remittances of any single tax equal to or greater than USD 50,000 during the fiscal year must file returns and make payments electronically.
Due Date: Corporate income tax returns are due on the 15th day of the fourth month following the end of the corporation’s taxable year.
Filing Requirements: Corporations must file Form CIT-120, West Virginia Corporation Income Tax Return, to report income and taxes due.
Extensions:
- If a federal extension (Form 7004) is filed, West Virginia automatically accepts this as an extension for the state return. A copy of the federal extension must be attached to the West Virginia return, and the extended due date written on the first page.
- If a federal extension is not filed, a state extension can be requested by writing to the West Virginia Tax Division before the original due date.
Estimated Tax Payment:
C corporations with an estimated tax liability of USD 10,000 or more in the current year are required to make quarterly estimated tax payments. These are due on the 15th day of the fourth, sixth, ninth, and twelfth months of the corporation’s taxable year.
Interest and Penalty:
- Late Filing Penalty: A penalty of 0.05% of taxes due per month (or any part of a month) is imposed for late filings, capped at 0.25%.
- Late Payment Penalty: Taxes not paid by the due date are also subject to a penalty of 0.05% per month, capped at 0.25%.
- Late Payment Interest: Unpaid balances after the due date accrue interest at 11.5%.
These rules ensure that both filing and payment obligations are treated seriously.
Pass through Entity Tax
In West Virginia, S corporations, partnerships, LLCs, and LLPs — collectively referred to as pass-through entities — are not subject to a separate state-level income tax. Instead, income, deductions, and credits flow through to the shareholders or partners, who report them on their individual tax returns. The Pass-through Entity Tax rate is 6.5%.
Due Date: The annual Pass-through Entity Tax Return is due on or before the 15th day of the third month following the end of the taxable year.
Extension of Time: Partnerships or S corporations requiring more time must file Form PTE-100EXT, Extension of Time to File Information Returns, by the original due date.
Filing Requirements: Pass-through entities must file Form PTE-100, West Virginia Pass Through Entity Tax Return, to report income and taxes due.
Interest and Penalty:
- Late Filing Penalty: A penalty of 0.05% of taxes due per month (or part thereof) applies for late filings, capped at 0.25%.
- Late Payment Penalty: Taxes not paid by the due date also attract a penalty of 0.05% per month, capped at 0.25%.
- Late Payment Interest: Unpaid balances accrue interest at 11.5%.
Estimated Tax Payment:
Pass-through entities must make estimated tax payments in quarterly installments. These are due on the 15th day of the fourth, sixth, ninth, and twelfth months of the reporting year. Entities use the West Virginia Estimated Income Tax Payment form to calculate and make these payments.
Conclusion
West Virginia’s taxation system is designed to ensure compliance by both corporations and pass-through entities.
- Corporations pay a flat 6.5% corporate income tax, must file Form CIT-120, and are required to make quarterly estimated payments if liability exceeds USD 10,000. Extensions are allowed if federal Form 7004 is filed, but penalties and 11.5% interest make timely compliance essential.
- Pass-through entities like S corporations, partnerships, LLCs, and LLPs are taxed at the entity level at 6.5%, with income flowing through to owners. They must file Form PTE-100, make quarterly estimated payments, and comply with the same penalty and interest rules.
While extensions provide flexibility for filing, they do not extend the time to pay. West Virginia’s penalty and interest provisions underline the importance of timely compliance for all business entities operating in the state.
