Instructions For Preparing Form 500ec Virginia Cooperative Modified Net Income Tax Returns - 2016
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1
2INSTRUCTIONS FOR PREPARING FORM 500EC
VIRGINIA COOPERATIVE MODIFIED NET INCOME TAX RETURNS FOR 2016
Fiscal Year Filers or Short Year Filers: Complete this line
(b) Extension Penalty: If the return is filed during
only if your taxable year is not from January 1 to December 31.
the automatic 6-month extension period and the
balance of tax due exceeds 10% of the actual tax
Complete the required information as requested in spaces
liability (Line 10 divided by Line 8a is greater than
provided at the top of page one. Be sure that name, address,
10%), then determine the number of months or
federal employer identification number, etc., are correctly
fraction thereof past the original due date the return
reported. Check the “Final Return” box if no further Virginia
is being filed. Multiply the number of months or
income tax return is required for any taxable year.
fraction thereof times 2%, not to exceed 12%, then
NOTE:
It may be beneficial to compute the nonmember
multiply that percentage by Line 10 and enter on
share of expenses by using Method 1 (Lines 18-22)
Line 11.
or Method 2 (Lines 23-25) prior to completing the
(c) Late Payment Penalty: Any balance of tax due not
return.
paid with the return is subject to a 6% per month
Late Payment Penalty, not to exceed 30%. The
LINE BY LINE INSTRUCTIONS
total of the Late Payment and Late Filing Penalties
cannot exceed 30%.
Line 1
Enter the total revenue received from electricity
Line 12 Interest: Enter the amount due at the underpayment
sales in Virginia.
rate established by Section 6621 of the Internal
Revenue Code, plus 2%, from the due date of the
Line 2
Enter the total revenue received from electricity
return until payment. This underpayment rate is
sales to members in Virginia.
subject to quarterly adjustment. When penalty is
Line 3
Subtract Line 2 from Line 1.
entered under 11(a) above, interest is added from
Line 4
Enter the nonmember share of ordinary and
the due date to the date of payment.
necessary expenses from Line 22 or Line 25.
Line 13 Additional Charge: Enter the amount from Line 17,
Line 5
Modified Net Income: Subtract Line 4 from Line 3.
Form 500C.
Line 6
Tax: Multiply the modified net income on Line 5 by
Line 14 Total Due: Enter the total of Lines 10, 11, 12, and
6%.
13. This is the total amount due and must be paid
when the return is filed. Attach Form 500V with
Line 7
Enter the total tax credits (nonrefundable and refundable
payment due.
credits) from Schedule 500CR, Section 2, Line 1B
and Section 4, Line 1A. See special instructions at
Line 15 Overpayment: Enter the amount of overpayment if
the end of these instructions for credit amount
Line 9 is larger than Line 8a.
adjustment prior to finishing the computation on
Line 16 Amount to be Credited to 2017: Enter the amount
Schedule 500CR.
of overpayment (from Line 15) you want credited
Line 8
Modified Net Income Tax: Subtract Line 7 from Line
to your 2017 estimated tax, if any.
6. Also, enter on Line 5 of Schedule 500MT.
Line 17 Amount to be Refunded: Subtract Line 16 from Line
Line 8a Enter the amount from Line 12, Schedule 500MT.
15 and enter the amount to be refunded.
Line 9
Payment Credits:
Nonmember Ordinary and Necessary Expenses
(a) Enter the total amount of estimated income tax paid
for 2016.
Method 1
(b) Enter any extension payment made or any other
Line 18 Enter expenses entirely attributable to electricity
payment not included in (a).
sales to nonmembers in Virginia. Please attach
a schedule itemizing all expenses included in this
Line 9
Add Lines 9(a) and 9(b).
figure.
Line 10 Tax Due: Subtract Line 9 from Line 8a (if applicable).
Line 19 Enter other expenses not entirely attributable to
This is the balance of the tax due.
electricity sales to either members or nonmembers
Line 11 Penalty:
in Virginia.
(a) Late Filing Penalty: If the return is filed after the
Line 20 Compute and Enter Nonmember Electricity Sales
automatic 6-month extended due date, enter 30%
Ratio: nonmember electricity sales in Virginia
of Line 10; or
divided by total electricity sales in Virginia.
Va. Dept. of Taxation 2601093 Rev. 07/16
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