Virginia · LLC tax election
Virginia LLC: S corp or C corp?
Virginia's rate for C corps is a single flat number, and pass-throughs get their own return.
See Virginia at a glanceShort answer
Virginia taxes a C corp at a flat 6% of Virginia taxable income and treats an S corp as a pass-through. Your LLC taxed as an S corp files Form 502, and the income lands on your personal return. For most owners the S election avoids the corporate layer; the cost is a separate pass-through return.
Last checked .Virginia at a glance
What is different about Virginia?
Virginia keeps this question tidy. A C corporation pays one flat rate, six percent of its Virginia taxable income, set by statute for every corporation organized in Virginia and every foreign corporation with Virginia income. There are no brackets to climb. An S corporation is a different case: Virginia classes it as a pass-through entity, along with LLCs, and the owners report their shares on their own returns. The entity files Form 502, or Form 502PTET if it chooses entity-level tax. What this adds up to is a plain trade: a flat 6% layer at the company in return for keeping profit there, versus owner-level tax and a pass-through return.
Does Virginia recognize a federal S corp election?
Virginia follows your federal S election and asks for no separate state form. Every pass-through entity that does business in Virginia or has Virginia-source income must file an annual return on Form 502 or Form 502PTET. S corporations count as pass-through entities, so the owners report their shares of income, gains, losses, deductions and credits on their own returns. The S corporation itself pays no Virginia income tax on that income. An entity can instead use Form 502PTET to pay at the entity level.
Does my LLC need a separate Virginia election or form?
Virginia has no separate S election form; the S corporation files Form 502 (or 502PTET if it elects the entity-level tax).2
What does Virginia tax an S corp or LLC at the entity level?
- A Virginia S corporation files Form 502 and its owners report the income, so the S corporation itself pays no Virginia income tax on pass-through income.3
Is a Virginia LLC taxed as a C corp ever better?
A Virginia C corp pays a flat 6% on its Virginia taxable income. The Code of Virginia imposes the tax on every corporation organized in Virginia and every foreign corporation with income from Virginia sources, so there is no graduated schedule to read. An LLC that elects C corp status is taxed this way too. Dividends you take out are then reported on your own return, so the 6% corporate layer comes before your personal tax.
Run your Virginia numbers
Virginia's flat 6% corporate layer is the number an S election avoids. If you plan to take profit out, the C corp layers 6% at the company on top of your personal tax; the S corp does not. The cost is the Form 502 filing and any nonresident or composite filing for out-of-state owners. For a business that distributes most of its profit, the S election usually favors you in Virginia.
Result
How much would a Virginia LLC owner save as an S corp?
| Taxed as | At $80,000 profit | At $150,000 profit |
|---|---|---|
| Default LLC | $11,304self-employment tax $11,304 | $21,194self-employment tax $21,194 |
| S corp | $9,344payroll tax $7,344 + Virginia S corp tax $0 + $2,000 payroll and prep | $15,770payroll tax $13,770 + Virginia S corp tax $0 + $2,000 payroll and prep |
| C corp | $17,581payroll tax $7,344 + Virginia tax $1,920 + federal $6,317 + $2,000 payroll and prep | $31,214payroll tax $13,770 + Virginia tax $3,600 + federal $11,844 + $2,000 payroll and prep |
Assumes a 60% salary7 and a single filer. Income tax is left out. C corp dividends are taxed again. We could not confirm on an official Virginia source whether a default LLC pays an entity-level tax, so none is shown.
When is the Form 2553 deadline for a Virginia LLC, and what if I miss it?
Late relief: federal steps, deadline guide.
What to do next
How to start one, or have us form it from $123.75.
Registered agent $74.25/yr, annual report.
LLC vs S corp guide, election deadline, Form 2553 filed for $165.
More on Virginia: How to start a Virginia LLC · How to start a Virginia corporation · Virginia LLC cost · Virginia annual report · Annual report late fees by state
File the S-Corp Election for your Virginia LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
What is the Virginia corporate income tax rate?
A flat 6% of Virginia taxable income. The Code of Virginia imposes it on every corporation organized in Virginia and every foreign corporation with income from Virginia sources.
Does Virginia recognize S corporations?
Yes, as pass-through entities. The S corporation files Form 502 and its owners report their shares of income on their own Virginia returns. Virginia does not ask for a separate state S election form.
What is Virginia Form 502PTET?
It is the return a pass-through entity files to pay Virginia tax at the entity level instead of passing it to the owners. Every pass-through entity files either Form 502 or Form 502PTET each year.
Does an LLC taxed as an S corp file Form 502 in Virginia?
Yes. Virginia counts LLCs and S corporations as pass-through entities, and every pass-through entity doing business in Virginia or with Virginia-source income files Form 502 or Form 502PTET.
Does Virginia have a minimum corporate tax?
Not for ordinary corporations on the Department's pages. The Code of Virginia imposes a flat six percent on Virginia taxable income, and the sources we checked list no minimum for general corporations.
Sources 8 links, checked Nov 6, 2026
- Virginia treats S corporations as pass-through entities whose owners report their share on their own returns. tax.virginia.gov, checked Nov 6, 2026
- Virginia has no separate S election form; the S corporation files Form 502 (or 502PTET if it elects the entity-level tax). tax.virginia.gov, checked Nov 6, 2026
- A Virginia S corporation files Form 502 and its owners report the income, so the S corporation itself pays no Virginia income tax on pass-through income. tax.virginia.gov, checked Nov 6, 2026
- A Virginia C corporation pays a flat 6% on Virginia taxable income. tax.virginia.gov, checked Nov 6, 2026
- Virginia pass-through owners report their share of entity income on their own Virginia returns. tax.virginia.gov, checked Nov 6, 2026
- IRS: Form 1120 instructions, C corp rate irs.gov, checked Nov 6, 2026
- IRS: S corp reasonable compensation irs.gov, checked Nov 6, 2026
- IRS: Form 2553 instructions irs.gov, checked Nov 6, 2026
Last verified Nov 6, 2026.
This page explains the rules; it is not tax advice. Run your numbers with a CPA or enrolled agent before you elect.
Last verified Nov 6, 2026.