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2022 Instructions for Form 760C
Underpayment of Virginia Estimated Tax by Individuals, Estates and Trusts

General Instructions result here. (NOTE: Estimated tax payments, income tax withheld and
Purpose of Form 760C extension payments are not tax credits.)
Virginia law requires that you pay your income tax in timely installments Line 5 ‑ Enter the number of payments required. You are required to make
throughout the year by having income tax withheld or by making payments estimated tax payments when you receive income from any source other
of estimated tax. If you do not pay at least 90% of your tax in this manner, than income on which sufficient Virginia income tax is withheld. For
you may be charged an addition to tax. Use Form 760C to determine calendar year filers, if you first received income subject to the estimated
whether you met the minimum payment requirement and/or whether you tax payment requirements:
are subject to an addition to tax charge. Income Received Payments Required
You may also need to use this form to demonstrate that you have not made On or before April 15 4 payments were required
an underpayment, or that you have met an exception that voids the addition After April 15, but before June 2 3 payments were required
to tax, particularly if your income did not remain constant throughout the
year. See the instructions for Line 5 for more information. After June 1, but before September 2 2 payments were required
Who Must File Form 760C After September 1 1 payment was required
There are four installment periods for determining whether you underpaid If you were required to make less than four payments for Taxable
your tax during the year. For calendar year filers, the due dates for each Year 2022 you must file Form 760C to indicate this. Otherwise, the
installment period are: May 1, June 15, September 15, and January 15. Department will automatically compute your liability as if you were
Fiscal year filers should refer to Virginia Form 760ES and the instructions subject to pay estimated tax in all four installment periods, and you
to determine their installment due dates. If your tax is underpaid as of may be assessed an addition to tax.
any installment due date, you must file Form 760C. The form must be Line 6 ‑ These are the due dates for calendar year filers. Fiscal year filers
filed even if you are due a refund when you file your tax return. must write in the appropriate due dates for their fiscal year installment
Since underpayments are determined as of each installment due date, periods.
an overpayment in one installment period cannot "cancel out" an Lines 8 through 10 ‑ Use these lines to report timely payments and credits
underpayment in a previous period. You must also file Form 760C if you for each installment period. If you made any late payments, these
were liable to make payments for less than four installment periods during amounts will be taken into consideration on Line 12. For purposes
the year (see the instructions for Line 5). of applying income tax withheld on Line 8, you may divide the total
You are not required to file Form 760C if your income tax liability after amount withheld by four, or enter the exact amount withheld for each
subtracting the Spouse Tax Adjustment and tax credits is $150 or less, or installment and enclose a schedule showing your computation.
if you were not required to file an income tax return. Line 11 ‑ If you overpaid your tax liability in any column, indicate this by
Special Rules for Farmers, Fishermen & Merchant Seamen placing the amount in brackets, for example, [$500.00]. An overpayment
as of any installment date must be applied to any underpayment in
If you meet BOTH of the following tests, do not file this form; you do not previous periods before being carried over to subsequent periods. For
owe an addition to tax. purposes of applying an overpayment on Form 760C, the overpayment
1. Your gross income from self-employment as a farmer, fisherman is considered a payment made on the installment date for which the
and/or being a merchant seaman is at least two-thirds of your annual overpayment is reported. Enter each overpayment amount on the Late
gross income for the taxable year, AND Payment/Overpayment Table located below Line 14. For example, if
2. You filed a Form 760, 760PY, 763 or 770 income tax return and you compute an overpayment of $500.00 in Column C, enter $500.00
paid the entire tax due by March 1, 2023. If you meet Test 1 but not on the Late Payment/Overpayment Table, and indicate September 15,
Test 2, use Form 760F, Underpayment of Estimated Tax by Farmers, 2022 as the date of payment.
Fishermen and Merchant Seamen, to determine whether you owe Line 12 ‑ Other Payments ‑ On Line 12a, enter the earliest late payment
an addition to tax. If you do not meet Test 1, use Form 760C. or overpayment from the Late Payment/Overpayment Table. Then, enter
Due Date the amount needed in each column to satisfy the underpayment in each
period. Repeat this step for Lines 12b, 12c and 12d. Do not enter more
If the due date falls on a Saturday, Sunday or legal holiday, then the return than is needed to satisfy the underpayment. For example, if a payment
may be filed and the tax may be paid without penalty or interest on the being applied in Column A is greater than the underpayment on Line
next succeeding business day. 11, any excess should be carried over and applied in Column B, then
Questions Column C, then to Column D. See Line 13 instructions for an example.
For assistance, contact the Commissioner of the Revenue, Director Line 13 ‑ Enter the total timely payments reported on Lines 8, 9, 10 and
of Finance or Director of Tax Administration for your Virginia city or 12. In considering amounts from Line 12, compare the date of payment
county; or the Department of Taxation, P.O. Box 1115, Richmond, VA with the installment due date.
23218‑1115 or (804) 367‑8031. Tenemos servicios disponible en Español. For example, a taxpayer made a late payment of $1,000 for the first
If you have access to the internet, you can obtain most Virginia income installment on May 15, 2022 and had an underpayment on Line 11,
tax forms from www.tax.virginia.gov. Column A, of only $500. Therefore, on Line 12 the taxpayer applied
$500 in Column A and $500 in Column B. In considering timely
Line‑by‑Line Instructions payments for completing Line 13, the taxpayer will compare the
• Line-by-line instructions are provided only for lines that need additional payment date of May 15, 2022, with the installment due dates for
clarification in order to be completed properly. Columns A and B. The installment due date for Column A is May 1,
• Fiscal Year Filers - If you filed your return on a fiscal year basis, 2022. Since the date of payment (May 15) falls after the installment
change the dates and interest rates accordingly on Form 760C. Enclose due date, the $500 amount applied in Column A is a late payment and
your Form 760C and any computation schedules with your income tax cannot be included on Line 13. The installment due date for Column
return. B, however, is June 15, 2022, which falls after the date the payment
was made. Therefore, the $500 amount applied on Line 12, Column
Part I ‑ Compute Your Underpayment B, is a timely payment for the second period and will be included on
Line 1 ‑ Start with the tax liability reported on your income tax return. Line 13.
Subtract the Spouse Tax Adjustment and tax credits and enter the
Va. Dept. of Taxation 2601099 Rev. 12/22

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Line 14 ‑ Subtract Line 13 from Line 7. If the total of the underpayments 3. 2022 personal exemptions (Form 760, Line 12;
on Line 14, Columns A through D, is $150 or less, stop here. You do Form 760PY, Line 13; Form 763, Line 12; or
not owe the addition to tax. Enclose Form 760C with your return. Form 770, enter 0). ..........................................
Part II ‑ Exceptions That Void the Addition to Tax 4. Taxable Income - Subtract Lines 2 and 3 from
If you computed an underpayment on Line 14 for any installment Line 1. .............................................................
period, complete this section to determine if you meet an exception that
voids the addition to tax. Exceptions are computed separately for each 5. Virginia Tax - Enter the tax computed on Line 4.
installment period; therefore, you can meet an exception in one or more 6. Total 2021 Spouse Tax Adjustment and credits
periods or meet different exceptions in different periods. If you do not allowed. ...........................................................
meet Exception 1 in a given period, you should try Exception 2, 3 and 4. 7. Exception 2 Tax - Subtract Line 6 from Line 5.
An exception met in one period does not automatically apply to any other Enter here and on Form 760C, Line 17. ..........
period - each period must be considered separately. After completing the Exception 2 Worksheet, enter the results in
If you meet an exception, the addition to tax is voided for that period. If the appropriate columns on Line 17. Compare the amounts in each
you do not meet an exception, the addition to tax must be computed on the column to the amounts in the corresponding columns on Line 15. If
underpayment amount reported on Line 14. An exception can only void the amount in any column on Line 15 equals or exceeds the amount
the addition to tax; it cannot reduce or eliminate an underpayment. Only in the corresponding column on Line 17, you met the exception for
timely payments can be considered in determining whether an exception that period. If you met Exception 2 for each period, you do not need to
has been met. For example, if payments for the first installment period, enclose Form 760C with your return. If you did not meet an exception
May 1, 2022, are not made until after that date, no exception will be met for every period in which you computed an underpayment, proceed to
for that period. Exception 3.
Line 15 ‑ Enter the total amount paid and/or withheld as of each installment Line 18 ‑ Exception 3: Tax on Annualized 2022 Income ‑ This exception
date. Estimated payments should be applied as follows: applies if your 2022 payments on Line 15 equal or exceed 90% of the
If Payment Is Made Apply to Installment Date tax for each installment period computed using annualized income.
On or before May 1 ...............................................May 1 "Annualized income" means the actual income received for the first
Between May 2 and June 15 ...............................June 15 four, five and eight months of the taxable year (three, four and seven
months for estates and trusts), multiplied by the factors shown above
Between June 16 and September 15 .........September 15 Line 18 to arrive at the amount that would have been your taxable
Between September 16 and January 15 .........January 15 income if your income had remained constant during the year.
Line 16 ‑ Exception 1: Prior Year’s Tax ‑ This exception applies if your Complete Lines 18a through 18g ‑ Since Exception 3 cannot be applied to
2022 payments on Line 15 equal or exceed your 2021 income tax the final installment period, enter amounts for the first three installment
liability for each installment period. Your 2021 Virginia income tax periods only. Compare the amount on Line 18g in each column to
return must have covered a full (twelve month) taxable year, and must the amount reported in the corresponding column on Line 15. If the
have reflected an income tax liability. amount in any column on Line 15 equals or exceeds the amount in the
Exception 1 Worksheet corresponding column on Line 18g, you met the exception for that
period. If you did not meet an exception for every period in which you
1. Enter the amount shown on your 2021 Form 760, reported an underpayment, proceed to Exception 4.
Line 18; Form 763, Line 18; or Form 770, Line 4. Line 19 ‑ Exception 4: Tax on 2022 Income Over a 4, 5 and 8 Month
2. Enter the total of the amounts on your 2021 Form Period ‑ This exception applies if your 2022 payments on Line 15
760, Lines 23 through 25; or Form 763, Lines 23 equal or exceed 90% of the income tax computed on the actual income
through 25; or Form 770, the credits included on received for the first four, five and eight months of the taxable year.
Line 5. ............................................................. Complete Lines 19a through 19g ‑ Since Exception 4 cannot be applied to
3. 2021 Tax Liability: Subtract Line 2 from Line 1. the final installment period, enter amounts for the first three installment
Enter here and on Form 760C, Line 16. .......... periods only. Compare the amount on Line 19g in each column with
After completing the Exception 1 worksheet, enter the results in the the amount reported in the corresponding column on Line 15. If the
appropriate columns on Line 16. Compare the amount in each column amount in any column on Line 15 equals or exceeds the amount reported
to the amount entered in the corresponding column on Line 15. If the in the corresponding column on Line 19g, you met the exception for
amount on Line 15 equals or exceeds the amount in the corresponding that period.
column on Line 16, you met Exception 1 for that period. If you met Part III ‑ Compute the Addition to Tax
Exception 1 for each period, you do not need to enclose Form 760C with
your return. If you did not meet the exception for every period in which Line 21 ‑ If you applied any payments on Part I, Line 12, to offset the
you reported an underpayment, proceed to Exception 2, Line 17. underpayments entered on Line 20, use the same date of payment used
on Line 12. Otherwise, use the actual date the tax was paid in full or
Line 17 ‑ Exception 2: Tax on Prior Year’s Income Using 2022 Rates May 1, 2023, whichever is earlier. If you applied more than one payment
and Exemptions ‑ This exception applies if your withholding and/ per installment period to offset an underpayment, you must compute
or timely estimated tax payments for the 2022 taxable year equal or the addition to tax separately for each payment applied. For example,
exceed an amount that would have been due by recomputing your tax if you report an underpayment of $1,000 for the first installment period
for the 2021 taxable year based on the facts shown on your return for, and pay $500 on May 15, 2022 AND $500 on June 30, 2022, you will
and the law applicable to, that taxable year, but using 2022 rates and need to make two separate computations:
personal exemptions. You do not need to have filed a Virginia return
or incurred a Virginia tax liability for the preceding taxable year to Amount of Underpayment From To
qualify for Exception 2. $500.00 5/1/22 5/15/22
Exception 2 Worksheet $500.00 5/1/22 6/30/22
If you are required to make more than one computation, you should
1. 2021 Virginia adjusted gross income. ............. compute your addition to tax on a separate schedule and enclose the
2. 2021 deductions (Form 760, Lines 10 or 11 and schedule with Form 760C.
13, 760PY, Lines 11 or 12 and 14 or 763, Lines
10 or 11 and 13; or Form 770, enter 0). ..........

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