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110CSR21G

5.1. A pass-through entity has the option to make the election to pay West Virginia income tax directly under W. Va. Code §11-21-3a for the taxable year. The election can be made as follows:

5.1.1. For Taxable Years 2023 and after, by timely filing a form, as directed by the Tax Commissioner, for electing to pay the tax at an entity level.

5.1.2. An electing PTE must also file a form for quarterly estimated payments of tax for the taxable year and submit timely quarterly estimated payments of tax due with that form.

5.1.3. If, as a result of a federal partnership audit, a partnership elects to be taxed at the entity level for federal tax purposes, that federal election will also act as an election to be taxed at the entity level for West Virginia state income tax purposes.

5.2. Electing PTEs may obtain an extension of time to file; but may only do so pursuant to timely payment of tax for the taxable year.

5.3. Electing PTEs must file an annual tax return, as directed by the Tax Commissioner, on or before the due date, or extended due date, for the taxable year.

5.4. Once the form for electing to pay the tax at an entity level is filed, the election is binding for that taxable year.

5.5. Each electing PTE may decide how to obtain consent from its owners. The election is binding on all the owners for the taxable year once the election is made by the pass-through entity and filed with the Tax Division. Once the electing PTE has filed its election with the Tax Division, an owner may not “opt out” of the pass-through entity’s election for that particular taxable year. An owner, officer, or employee of the pass-through entity who is authorized to act on behalf of the pass-through entity in tax matters must sign the tax return. By signing the return, the signer declares that they are the authorized representative of the pass-through entity. Because the tax return must be filed electronically, the return must be signed using the electronic signature procedures established by the Tax Division.

110-21G-6. Pass-Through Entity Qualification te Make the Election.

Generally, a pass-through entity qualifies to make the election only if it is taxable under W. Va. Code §11- 21-1 et seq., and not taxable under W. Va. Code §11-24-1 et seq. Any pass-through entity that is treated as a disregarded entity for federal income tax purposes may not elect to be taxed under W. Va. Code §11- 21-3a.

110-21G-7. Taxable Income.

7.1. West Virginia Taxable Income -- An electing PTE’s West Virginia taxable income is the total of: (1) all resident owner’s share of the electing PTE’s income or loss; (2) all nonresident owner’s share of pass-through entity income or loss, other than apportionable income, multiplied by the pass-through entity’s apportionment percentage; and (3) each nonresident owner’s share of income allocable to West Virginia.

7.1.1. The electing PTE must determine the status of each owner as a resident or nonresident of West Virginia.