Virginia PTET for 2022

Technical topics regarding tax preparation.
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10-Jan-2015 4:30pm
Location:
Virginia
VA PTET

My thinking is that if the S corp elects to pay the shareholders VA tax at the S Corp level on a cash basis it will have no effect on the federal in 2022, but will reduce the 2023 tax.

For example At the federal level the taxable income is 100,000 in 2022 and 75,000 in 2023 before payment of VA 2022 tax. S Corp pays tax 100,000 X 5% and individual rate is 5%. 5% rate for simplicity.

What do you think?

2022 2023

S Corp

Federal

100,000 75,000

Less 2022 VA payment made in 2023 ( 5,000)

70,000

Virginia

100,000 70,000

Tax 5,000 paid by S Corp 5,000 add back for tax paid in 2022


75,000




1040


Federal

K-1 100,000


Virginia

VK-1 100,000

Tax due 5,000

Less credit (5,000) paid at S Corp level

VA tax due zero
 

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