How to Complete Virginia Form 502W: Deadlines, Calculation, and Filing

Virginia Form 502W, titled “Pass-Through Entity Withholding Tax Payment,” is the voucher a partnership, S corporation, or LLC uses to send Virginia the 5% income tax it withholds on nonresident owners’ shares of Virginia source income when that payment travels separately from the annual Form 502 return.¹ It is not an exemption certificate, and it is not sent to the owners. It goes to the Department of Taxation with the money, and it exists mainly for entities that take the automatic six-month extension to file Form 502 but still have to pay the withholding by the original April deadline.

When You Actually Need to File 502W

Virginia requires every pass-through entity doing business in the state to withhold tax equal to 5% of each nonresident owner’s share of Virginia source income, unless an exemption applies.² Form 502W is the voucher for that payment in three specific situations:

The entity is using the automatic six-month extension to file Form 502 later but has to pay the withholding tax by the original due date.
The entity wants to make a withholding payment early, before filing the return.
The entity holds an approved waiver from the Department of Taxation to file on paper rather than electronically.

If you are filing Form 502 and paying the withholding at the same time electronically, you do not need a separate 502W. The payment rides with the return.¹ You also should not submit the voucher if no withholding is due.³

The Deadline Trap: Payment Due Date vs. Return Due Date

Form 502 is due on the 15th day of the fourth month after the entity’s taxable year ends, which is April 15 for calendar-year filers. Virginia grants an automatic six-month extension that pushes the Form 502 filing deadline to October 15, with no application required.⁴

The withholding payment does not get that extension. Even if the entity waits until October to file the return, the withholding tax is still due by the original April deadline. That mismatch is why Form 502W exists. The return is not ready, but the money has to move.

Calculating the Withholding Amount

The form offers two acceptable ways to arrive at the total. Pick whichever matches how your books are organized.

Entity-level method: compute the pass-through entity’s total taxable income, apply each nonresident owner’s pro rata share, multiply the total nonresident income by 5%, and subtract each owner’s share of any Virginia tax credits.
Owner-level method: compute each nonresident owner’s taxable income individually, multiply each by 5%, subtract each owner’s share of credits, then add the individual results together.

The number that goes in the payment block on the voucher is the combined withholding for all nonresident owners.¹

Filling Out the Voucher

Form 502W collects information about the entity, not about the individual owners. Have the following ready before you start:

The entity’s Federal Employer Identification Number (FEIN).
The two-letter entity type code: SC for S corporation, PG for general partnership, PL for limited partnership, LL for limited liability company, LP for limited liability partnership, NZ for nonprofit organization, or OB for other.
The six-digit NAICS code for your business activity.
The month and year the entity’s taxable period ends.
The entity’s legal name and mailing address.
The total withholding tax calculated for all nonresident owners.

Sign and date the form and include a phone number. Whoever signs must have authority to act for the entity.¹

How to Submit the Form

Virginia requires pass-through entities to file returns and payments electronically. The simplest route is the Department of Taxation’s eForms application at tax.virginia.gov. You select Form 502W, complete the fields online, and schedule a payment from a checking account, including for a future date.¹

If your bank requires debit authorization for the Department of Taxation, the debit filter number is 1546001745. A $35 fee may be assessed if your financial institution declines the payment.³

Only entities with an approved waiver from electronic filing can mail a paper voucher. Those entities send the form and check to:

Virginia Department of Taxation
P.O. Box 1500
Richmond, VA 23218-1500¹

When Withholding Is Not Required

Virginia Code § 58.1-486.2 lists four situations where the entity does not have to withhold on a nonresident owner, which also means no 502W payment is needed for that owner’s share:

A non-corporate nonresident owner that is exempt from federal income tax on its Virginia source income because of its purpose or activities, such as a qualifying charitable organization. The entity needs a written statement from the owner and must disclose the owner’s name and federal taxpayer identification number on Form 502.
A nonresident corporate owner that is exempt from federal income tax on its Virginia source income. Same written statement and disclosure requirements apply.
Undue hardship. If complying would create an undue financial burden on the entity, the entity may petition the Tax Commissioner in writing for an exemption. The Commissioner weighs the entity’s cost of compliance against the state’s cost of collecting the tax directly from the nonresident owner. No exemption applies unless the Commissioner approves it in writing.
Small rental entities. If the pass-through entity owns and leases four or fewer dwelling units in Virginia, withholding is not required for any nonresident owner. The entity still has to disclose each owner’s name and federal taxpayer identification number on Form 502.

When an exemption applies, the entity leaves that owner’s income out of the withholding calculation. The owner is still reported on the annual Form 502 return.²

The Composite Return Alternative

A pass-through entity with two or more nonresident individual owners can skip owner-by-owner withholding for some or all of them by filing a composite return on Form 765. This is a single unified return the entity files on behalf of participating nonresident owners, reporting their Virginia source income from the entity and paying the tax collectively. Participating owners do not file their own Virginia nonresident returns for that PTE income, and the entity owes no withholding tax for them.⁵

Composite filing is optional, and the entity can include only some of its qualified nonresident owners. For any nonresident owner left off Form 765, the 5% withholding still applies, and Form 502W is the voucher for that payment. Only natural persons who are direct owners and Virginia nonresidents qualify for composite filing. Corporations and other entities cannot be included.⁵

1
Virginia Department of Taxation. 2025 Form 502W – Pass-Through Entity Withholding Tax Payment
2
Virginia Code Commission. Virginia Code 58.1-486.2 – Withholding Tax on Virginia Source Income of Nonresident Owners
3
Virginia Department of Taxation. Form 502W – Virginia Pass-Through Withholding Tax Payment
4
Virginia Tax. Pass-Through Entities
5
Virginia Tax. 2025 Form 765 Instructions – Unified Nonresident Return