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Agricultural Best Management Practices (BMP) Tax

conducted in conjunction with a Virginia public or private college

Credit

or university, to the extent the expenses exceed a base amount .

There is a $5 million cap on the total amount of credits allowed

This credit is available to qualified taxpayers engaged in

in any fiscal year . If the total amount of approved tax credits

agricultural production for market or having equines that create

is less than the $5 million limit, the Department of Taxation

needs for agricultural best management practices to reduce

will allocate the remaining amount to the taxpayers already

nonpoint source pollutants who have in place a soil conservation

approved for the tax credits for the taxable year for 15% of

plan approved by the local Soil and Water Conservation District

the second $167,000 in Virginia qualified research expenses

(SWCD) . The credit is 25% of the first $70,000 expended for

or 20% of the second $175,000 in Virginia qualified research

agricultural best management practices approved by the local

expenses if the research was conducted in conjunction with a

SWCD . The maximum credit is $17,500 or the total amount

Virginia public college or university to the extent the expenses

of state income tax obligation of the individual . Effective for

exceed the Virginia base amount, on a pro rata basis .

tax years beginning on and after January 1, 2011, this credit

is refundable to individual taxpayers . The credit is still non-

The business must apply by April 1st using Form RDC .

refundable to corporate taxpayers . Individual taxpayers who

Submitting a late application will disqualify you for the credit . All

applications must be sent to the Virginia Department of Taxation,

had a carryforward amount from credits claimed in 2006, 2007,

2008, 2009, or 2010 are permitted to claim that carryforward

Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715 . This

amount on their 2011 return and will receive a refund for any

credit requires certification from the Tax Credit Unit in order to be

excess amount of the carryforward . Individual taxpayers who

claimed on your tax return . A letter will be sent to certify the credit .

had a carryforward amount from credits claimed prior to 2006

The amount of the credit attributable to a partnership, electing

are not permitted to claim that carryforward amount on their

small business corporation (S corporation), or limited liability

2011 return . If a pass-through entity (PTE) distributes this credit

company (LLC) must be allocated to the individual partners,

to an individual partner, shareholder, or member, the amount of

shareholders, or members in proportion to their ownership or

the Agricultural Best Management Practices Tax Credit listed

interest in the business entity using Form PTE within 30 days after

on the individual’s Schedule VK-1 is refundable and should be

the credit is granted .

claimed in Section 3, Part 3 of the Schedule CR . Any amount

Any taxpayer that is allowed a Research and Development

distributed by a PTE to a corporate partner, shareholder, or

Expenses Tax Credit is not allowed to use the same expenses as

member is non-refundable . For additional information about

the basis for claiming any other Virginia tax credit . If the taxpayer

eligible BMPs, contact your local Soil and Water Conservation

conducts research and development in Virginia on human cells or

District Office.

tissue derived from induced abortions or from stem cells obtained

For additional tax return related information visit our website

from human embryos, then the credit for the approved research

at , or call the Virginia Department of

and development expenses will not be allowed to be refunded to

Taxation at 804-786-2992 .

the taxpayer .

Research and Development Expenses Tax Credit

If you did not conduct embryonic stem cell research in Virginia,

A refundable individual and corporate income tax credit

then the tax credit is refundable . Enter the amount of the credit

is allowed for qualified research and development expenses

that is allowed on Line 4A under Section 3, Part 4 of the Schedule

for taxable years beginning on or after January 1, 2011, but

CR .

before January 1, 2016 . The tax credit is equal to (i) 15% of the

If you did conduct embryonic stem cell research in Virginia,

first $167,000 in Virginia qualified research and development

then the tax credit is nonrefundable . Enter the amount of the

expenses, or (ii) 20% of the first $175,000 of Virginia qualified

credit that is allowed in Section 1, Part 30 of the Schedule CR .

research and development expenses if the research was

WHAT TO ATTACH

Attachments should be included with your return when claiming original or carryover credits . Computation schedules are

required for carry forward claims . Missing attachments may cause a credit to be disallowed .

•

Enterprise Zone Act Credit: Attach Form 301 .

•

Recyclable Materials Processing Equipment Credit: Approved Form 50-11S from the Department of Environmental

Quality as well as receipts, invoices or other documentation to confirm purchase price paid .

•

Conservation Tillage Equipment Credit: Statement showing purchase date, description and credit computation .

•

Precision Fertilizer and Pesticide Application Equipment Credit: Statement showing purchase date, description

and credit computation .

•

Vehicle Emissions Testing Equipment Credit: Copy of the letter from the Department of Environmental Quality (DEQ)

to the equipment vendor certifying that the equipment configuration meets the regulation and equipment specification

requirements for use in the enhanced vehicle emissions inspection program . A copy of the letter may be obtained from

the equipment vendor or the DEQ Northern Virginia Regional office in Woodbridge, Virginia by calling (703) 583-3900 .

•

Foreign Source Retirement Income Tax Credit: Copy of the tax return filed in the other country or other proof of income

tax paid to the foreign country and a schedule showing computation of foreign currency converted to United States Dollars .

•

Waste Motor Oil Burning Equipment Credit: Approved Form 50-12 from the Department of Environmental Quality,

receipts, invoices or other documentation to confirm purchase price paid .

•

Biodiesel and Green Diesel Fuels Tax Credit: Attach the letter of certification from the Virginia Department of Taxation

authorizing the credit .

•

Coalfield Employment Enhancement Tax Credit and Virginia Coal Employment and Production Incentive: Form

306 with completed schedules, if appropriate . See “What to Attach” on the instructions for Form 306 for additional

attachment requirements and information .

Virginia Schedule Cr Instructions - For Use With Forms 760, 760py, 763 And 765 General Information - 2012 Page 8

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