Many people and organizations are finding it difficult to meet their tax responsibilities as the COVID-19 pandemic continues to have an impact on the economy. State taxes in Virginia are no different. Do Virginia state taxes have a wait then? The quick response is no. Virginia state taxes are not postponed, and the government still anticipates that taxpayers will submit their returns and settle any outstanding balances by the due dates.
The Virginia Department of Taxation is however aware of the financial hardships the pandemic is causing many taxpayers. As a result, the agency provides people who qualify with payment schedules and penalty exemptions. Taxpayers can contact the department’s customer service line or submit a payment plan request online.
Let’s now discuss the further linked questions. Is Virginia’s PPP forgiveness taxable? No, is the response. Loans made through the PPP (Paycheck Protection Program) are exempt from Virginia’s state income tax. In Virginia, PPP loan forgiveness is likewise exempt from taxes, and any expenses incurred with the money from the loan forgiveness are still deductable from state taxes.
Does Virginia permit the carryback of NOLs (Net Operating Losses)? No, is the response. Although Virginia does not permit NOL carryback, it does permit NOL carryforward for a maximum of ten years. It’s possible for companies that have suffered losses as a result of the epidemic to carry those losses forward and use them to offset future taxable revenue, lowering their tax liability.
In Virginia, are SBA (Small Business Administration) loans taxable? Yes, it is the answer. In Virginia, SBA loans are regarded as taxable income. However, companies that get SBA loans could be able to claim a state tax deduction for the interest paid on those loans, lowering their overall tax obligation. Last but not least, why would you pick a S corporation? A corporation that has chosen to be taxed under Subchapter S of the Internal Revenue Code is known as a S corporation. As a result, the corporation is exempt from federal income tax, and instead, its shareholders are responsible for reporting its profits and losses on their personal tax returns. S corporations are preferred by small business owners because they provide pass-through taxation and liability protection.
In conclusion, Virginia state taxes are not postponed, but the state does provide payment plans and penalty exemptions for taxpayers who are having a hard time meeting their commitments because of the pandemic. In Virginia, PPP forgiveness is not taxable, whereas SBA loans are. While Virginia does not permit NOL carryback, it does permit carryforward for a maximum of ten years. Finally, because to their liability protection and pass-through taxation, S corporations are a well-liked option among small business owners.
Sorry, but the corresponding query “Should I be a C-Corp or an S-Corp?”