Who Must File
West Virginia imposes a corporation net income tax on every domestic or foreign corporation that enjoys the benefits and protections of the government and laws of West Virginia or derives income from property, activity, or other sources in West Virginia.
Source: W. Va. Code § 11-24-4
Source: West Virginia Tax Division – Corporate Income Tax
A domestic corporation is any corporation organized under the laws of West Virginia. Every other corporation is a foreign corporation.
Source: W. Va. Code § 11-24-3a
For purposes of the tax, engaging in business or doing business means any corporation that enjoys the benefits and protection of government and laws in the state. West Virginia's nexus standard is broad; physical presence is not required. In Tax Commissioner v. MBNA America Bank, N.A., the West Virginia Supreme Court of Appeals upheld a "significant economic presence" test for determining whether a corporation has sufficient connection with the state to be subject to corporate income tax, even when the corporation had no employees or other tangible ties to the state.
Source: W. Va. Code § 11-24-3a(11)
## Exemptions
Certain entities are exempt from the corporation net income tax:
- Corporations exempt from federal income tax under the Internal Revenue Code (except for unrelated business taxable income under IRC § 512)
- S corporations that have made a valid election under IRC § 1362(a) (though these entities must file an information return)
- Certain trusts established under 29 U.S.C. § 186 prior to January 1, 1967
Source: W. Va. Code § 11-24-5
Tax-exempt organizations with unrelated business income subject to federal tax under IRC § 512 must pay West Virginia corporation net income tax on that income.
Source: CIT-120 Instructions 2023
## Combined Reporting
For tax years beginning on or after January 1, 2009, any taxpayer engaged in a unitary business with one or more other corporations must file a combined report that includes the income, allocation, and apportionment of income of all corporations that are members of the unitary business. Members may elect to file either separate returns with a combined report or a group combined return with a designated surety corporation.
Source: W. Va. Code § 11-24-13a(j)
Source: West Virginia Tax Division – Corporate Income Tax
All combined reporting corporate income tax returns must be filed electronically using an approved software vendor.
Tax Rate
West Virginia imposes a corporation net income tax at a flat rate of 6.5 percent on the West Virginia taxable income of every domestic or foreign corporation engaging in business in the state, except corporations exempt under W. Va. Code § 11-24-5. This rate has been in effect for taxable periods beginning on or after January 1, 2014.
Source: W. Va. Code § 11-24-4
Tax Base — Federal Starting Point
West Virginia taxable income begins with a corporation's federal taxable income as defined for federal income tax purposes, determined before apportionment. The state then requires specific adjustments through additions and subtractions enumerated in W. Va. Code § 11-24-6.
Common additions to federal taxable income include interest or dividends on state and local bonds exempt from federal tax, foreign dividend gross-up under IRC § 78, and federal net operating loss deductions. Common subtractions include state income taxes deducted federally, interest on certain U.S. government obligations exempt from state tax, and refunds of state taxes included in federal income.
Source: W. Va. Code § 11-24-6 Source: TSD 100 Business Taxes, West Virginia Tax Division, p. 6
Apportionment Formula
For tax years beginning on or after January 1, 2022, West Virginia apportions the business income of multistate corporations using a single sales factor. The sales factor is a fraction: the numerator includes gross receipts from West Virginia, and the denominator includes total gross receipts everywhere. West Virginia uses market-based sourcing for sales of services and certain intangible property.
Prior to 2022, West Virginia used a four-factor formula consisting of a property factor, a payroll factor, and a double-weighted sales factor.
Source: W. Va. Code § 11-24-7 Source: West Virginia Tax Division – Corporate Income Tax
Filing Deadline and Extensions
West Virginia corporate net income tax returns are due on the 15th day of the fourth month following the close of the corporation's taxable year. For calendar-year corporations, this means April 15. For fiscal-year filers, the return is due by the 15th day of the fourth month after the fiscal year ends.
## Automatic Extension with Federal Extension
West Virginia automatically grants a six-month extension of time to file if the corporation has obtained a valid federal extension from the IRS (Form 7004). No separate West Virginia extension application is required when a federal extension has been filed. The six-month extension moves the deadline to October 15 for calendar-year filers.
## State-Only Extension
If a corporation has not filed a federal extension—or wishes to file a West Virginia-only extension—it may submit Form CIT-120EXT (West Virginia Extension Corporation Net Income Tax Return) on or before the original due date of the return. The Tax Division may grant a written extension request if submitted by the original deadline.
## Payment Obligation
An extension of time to file is not an extension of time to pay. Any tax due must be paid by the original due date (the 15th day of the fourth month after year-end) to avoid interest and penalties. A corporation with an extension can remit payment by filing Form CIT-120EXT with the payment, or by making an electronic payment through the Tax Division's online system.
## Electronic Filing Mandate
Corporations that made payments totaling $50,000 or more during the most recent fiscal year are required to file and pay West Virginia corporation net income tax electronically. All combined reporting returns must be filed electronically using an approved software vendor.
Source: W. Va. Code § 11-24-14
Estimated Tax Payment Requirements
Every corporation subject to West Virginia corporation net income tax must make estimated tax payments for the taxable year if its West Virginia taxable income can reasonably be expected to exceed $10,000—which equals a tax liability after tax credits of more than $650.
Source: W. Va. Code § 11-24-16
Source: CIT-120U Underpayment of Estimated Tax Worksheet, West Virginia Tax Division (2024)
## Payment Schedule and Installment Requirements
Estimated tax payments are due in four equal installments on the 15th day of the fourth, sixth, ninth, and twelfth months of the tax year. For a calendar-year corporation, these installments are due April 15, June 15, September 15, and December 15.
A taxpayer is required to remit, in equal installments on these dates, at least ninety percent (90%) of the tax due for the filing period. Corporations may elect to pay any installment of estimated tax prior to the date prescribed for its payment.
Source: W. Va. Code § 11-24-16
Source: CIT-120U Underpayment of Estimated Tax Worksheet
## Underpayment Penalty
If a corporation fails to timely remit any required estimated tax payment or remits less than the required amount, an addition to tax (penalty) is imposed under W. Va. Code § 11-10-18a. The penalty is figured separately for each installment due date; a corporation may owe the penalty for an earlier installment even if it paid enough tax later to make up the underpayment.
The penalty is calculated by applying the interest rate established under W. Va. Code § 11-10-17 or § 11-10-17a—whichever is appropriate for the taxable year—to the amount of the underpayment for the period of the underpayment. The West Virginia Tax Commissioner sets this rate at six-month intervals, and the rate varies over time.
Source: W. Va. Code § 11-10-18a
Source: CIT-120U Underpayment of Estimated Tax Worksheet
## Safe Harbors and Exceptions
A corporation will not be subject to underpayment additions to tax if the total amount of estimated tax paid on or before the last installment date equals or exceeds one hundred percent (100%) of the tax shown on the taxpayer's return for the preceding taxable year, provided:
- A return showing a liability for tax was filed by the taxpayer for the preceding taxable year;
- The preceding taxable year was a taxable year of twelve months; and
- The prior-year return showed a West Virginia tax liability greater than zero.
This is known as the prior-year safe harbor. If the prior year did not meet all three conditions—for example, if it was a short tax year, or if no West Virginia liability was shown—the safe harbor does not apply.
Source: W. Va. Code § 11-10-18a
Source: CIT-120U Underpayment of Estimated Tax Worksheet
## Annualized Income Installment Method
Corporations with income that varies significantly during the year may use the annualized income installment method to reduce or eliminate the required amount of one or more installments. Under this method, the required installment is based on the taxpayer's actual annualized income computed through the end of each installment period, rather than on the prior year's tax or a flat estimate of current-year tax. If the annualized income installment is less than the amount otherwise required under the 90% current-year or 100% prior-year tests, the taxpayer may use the lower annualized amount for that installment.
To claim the benefit of the annualized income installment method, the taxpayer must complete the annualized installment worksheet sections of Form CIT-120U.
Source: W. Va. Code § 11-10-18a