Is Virginia a Piggyback State? Explained

There are two categories of states in the US when it comes to state taxes: piggyback states and stand-alone states. A state that bases its calculation of state income tax on the federal tax return is known as a piggyback state. On the other hand, independent states have their own state income tax calculations and forms. Then Virginia is a piggyback state, right? Yes, it is the answer. Virginia is a piggyback state, which means that the state bases its calculation of state income tax on the federal tax return.

Let’s move on to the questions that are connected now. What are S and C corporations? The IRS recognizes two different types of corporations: S corporations and C corporations. Their tax treatment is the primary distinction between them. Double taxation applies to C Corporations, which means that both the corporation’s income and the dividends paid to shareholders are subject to taxation. Conversely, S Corporations are not liable to double taxation. Instead, the shareholders receive a pass-through of the corporation’s income, which they then declare on their individual tax forms. Do Virginians need to file Articles of Incorporation? Yes, in order to form a corporation in Virginia, Articles of Incorporation must be submitted to the State Corporation Commission (SCC). The existence of a company, its goals, and the duties and rights of its stockholders are all spelled out in the Articles of Incorporation, which are legal documents. How Do I Dissolve a S Corporation in Virginia, Also? Articles of Termination must be filed with the SCC in order to dissolve a S Corporation in Virginia. The name of the corporation, the date of incorporation, and the reason for termination must all be included in the Articles of Termination, which must also be signed by every shareholder of the corporation. The corporation is dissolved once the SCC adopts the Articles of Termination. What Does S Stand For in S Corp?

The letter “S” in “S” Corporation stands for “Small Business.” S Corporations are made for small companies with one class of equity and fewer than 100 stockholders. They provide pass-through taxation and limited liability protection with none of the double taxation that C Corporations experience.

In conclusion, Virginia is a piggyback state, which implies that it bases its calculation of state income tax on the federal tax return. Virginia also needs articles of incorporation and articles of termination to open and close corporations. Last but not least, the “S” in S Corporation stands for “Small Business,” and S Corporations provide pass-through taxation and limited liability protection without the double taxation that C Corporations do.