Virginia Research and Development Expenses Tax Credit

Program Overview

Virginia provides a Research and Development Expenses Tax Credit for taxpayers whose Virginia qualified research expenses fall below the applicable statutory threshold and a separate Major Research and Development Expenses Tax Credit for taxpayers that meet the higher research expense requirements. Both programs require an application to the Virginia Department of Taxation by the applicable annual deadline and are subject to statewide credit limitations. If approved applications exceed the available allocation, credits may be reduced on a pro rata basis. Enhanced credit rates may apply to qualifying research conducted in collaboration with a Virginia public or private college or university.

Eligibility

• Taxpayers with qualifying research expenses associated with research conducted in Virginia may qualify.
• Applicants must submit the required application to the Virginia Department of Taxation by the applicable annual deadline.
• The standard Research and Development Expenses Tax Credit applies to taxpayers meeting the applicable qualified research expense threshold.
• The Major Research and Development Expenses Tax Credit applies to taxpayers meeting the applicable higher research expense requirements.
• Additional requirements may apply to research conducted in collaboration with a Virginia public or private college or university.

Benefits

• The standard Research and Development Expenses Tax Credit may be refundable, subject to applicable requirements and limitations.
• The Major Research and Development Expenses Tax Credit is non-refundable and may be carried forward subject to applicable rules.
• Enhanced rates may be available for qualifying research conducted in conjunction with an eligible Virginia college or university.
• Both credits are subject to applicable annual statewide limitations and allocation procedures.