Virginia Schedule Cr Instructions - Credit Computation Schedule - For Use With Forms 760, 760py, 763 And 765 - 2006 Page 2

ADVERTISEMENT

Recyclable Materials Processing Equipment Credit
Major Business Facility Job Tax Credit
Individuals, estates, trusts, corporations, banks, insurance
This credit expired December 31, 2003. Only carryover credits
companies and telecommunications companies may claim a
from prior years are allowed for taxable year 2006.
Virginia tax credit if the taxpayer creates at least 100 new full-time
Conservation Tillage Equipment Credit
jobs in connection with the establishment or expansion of a major
This credit may be claimed by an individual purchasing and using
business facility, and the company is engaged in a qualifying industry
conservation tillage equipment for the purpose of agricultural production.
in Virginia. If a taxpayer is located in an enterprise zone or in an
The tax credit is 25% of conservation tillage equipment expenditures
economically distressed area (as defi ned by the Virginia Department
made, or $4,000, whichever is less. The term “conservation tillage
of Economic Development), the threshold is reduced from 100 to 50.
equipment” means “no-till” planters and drills designed to reduce soil
Credits will be recaptured proportionately if employment decreases
compaction, (including guidance systems to control traffi c patterns
during the fi ve years following the initial credit year.
that are designed to minimize soil disturbance) which may be attached
This nonrefundable credit is equal to $1,000 per each qualifying
to equipment already owned. Any amount unused this year may be
new job in excess of the 100/50 job threshold and is spread
carried over to the next fi ve taxable years.
over three years. The credit only applies to facilities where an
Attach a statement to your return showing purchase date,
announcement to expand or establish such a facility was made on
description and credit computation when claiming this credit.
or after January 1, 1994. The credit must be claimed ratably over
three taxable years, beginning with the taxable year following the
Fertilizer and Pesticide Application Equipment Credit
year in which the facility is established or expanded, or the new
The fertilizer and pesticide application equipment credit is 25%
qualifying jobs are added. Unused credits may be carried forward
of all expenditures for equipment certifi ed as providing more precise
for the next ten taxable years.
pesticide and agricultural application, or $3,750, whichever is less.
To apply for this credit, complete Form 304. All applications must
Qualifying individuals must be engaged in agricultural production
be submitted to the Department of Taxation, Tax Credit Unit, P.O.
for market and have in place a nutrient management plan approved
Box 715, Richmond, VA 23218-0715 90 days prior to the due date of
by the local Soil and Water Conservation District. Any unused credit
your return. A letter will be sent to certify the credit. This letter must
may be carried forward for the next fi ve taxable years.
be attached to the return. To claim this credit, complete Part IX of
Rent Reduction Program Credit
Schedule CR.
Owners of rental property who provide a rent reduction to income
Special Credit Provisions for Businesses in Severely
eligible tenants who are age 62 or older, are mentally or physically
Economically Distressed Areas
disabled, or have been homeless (i.e. person who has resided in a
For taxable years beginning on or after January 1, 2004 but
domestic violence or homeless shelter) at any time within the twelve
before January 1, 2006, the threshold amount to qualify for this
months preceding the lease term are eligible to apply for a state
credit for a business facility located in a severely economically
income tax credit. The reduced rent must be at least 15% below the
distressed areas is lowered from 100 to 25 full time jobs. Severely
market rate. The credit is equal to 50% of the total rent reductions
economically distressed areas will be identifi ed by the Virginia
given to eligible tenants during the taxable year. A corporation may
Economic Development Partnership and are defi ned as having an
not claim this credit on any dwelling unit unless this credit for rental
unemployment rate during the preceding year of at least twice the
reductions was validly claimed on such dwelling unit for all or part
average statewide unemployment rate.
of the month of December 1999 - no new owner applications are
Please note that job expansion occurring during the 2004 taxable
being accepted. Any amount unused in the taxable year in which
year will be eligible for this credit on the tax return for taxable year
it was earned may be carried forward for the next fi ve taxable
2005 and not the return for 2004. Likewise, expansion occurring
years. Tax credits are only available for reductions offered after the
during 2005 will be eligible for the credit on tax returns for taxable
time of application and approval by Virginia Housing Development
year 2006.
Authority (VHDA). Copies of the Certifi cate of Qualifi cation and
The Department of Taxation is authorized to grant a total of
Certifi cation of Tax Credits from VHDA must be attached to your
$100,000 in credits annually to businesses in severely economically
return when claiming the credit. For additional information, contact:
distressed areas. The credit will be prorated among applicants if
Patricia Urbine, Virginia Housing Development Authority,
credit requests exceed the $100,000 limit.
601 S. Belvidere Street, Richmond, VA 23220-6504, 804-343-5673.
Businesses in severely economically distressed areas whose
Vehicle Emissions Testing Equipment and Clean-Fuel Vehicle Credit
credit year is during 2006 must apply to the Department of
An income tax credit may be claimed for purchases, made while
Taxation, Tax Credit Unit, PO Box 715, Richmond, VA 23218-
you were a Virginia resident, of vehicle emissions testing equipment
0715 by April 1, 2007 using Form 304. This application form will
and clean-fuel vehicles. The credit is 20% of the purchase or lease
be updated in the latter part of 2006. A letter will be sent by June
price paid during the taxable year for equipment certifi ed by the
30, 2007 to certify the credit.
Department of Environmental Quality (DEQ) for vehicle emissions
Foreign Source Retirement Income Tax Credit
testing within a locality required by law to implement an enhanced
A credit is available to Virginia residents who paid income tax to
vehicle emissions inspection program or, after January 1, 1998,
a foreign country on pension or retirement income derived from past
within any locality adjacent to those localities required to implement
employment in a foreign country provided such income is included
the program.
in Virginia taxable income for the taxable year. For purposes of
computing the credit, the foreign currency must be translated into
Emissions Testing Equipment Credit - You must attach a copy
U.S. dollars using the prevailing exchange rate that most nearly
of the letter from DEQ to the equipment vendor certifying that
refl ects the value of the currency at the time the taxes were actually
the equipment confi guration meets the regulation and equipment
paid to the foreign country. If you fi led separately in the foreign
specifi cation requirements for use in the enhanced vehicle emissions
country, but are fi ling jointly in Virginia, enter only the Virginia
inspection program. To obtain a copy of this letter, contact your
taxable income attributable to the fi ler whose income was taxed by
equipment vendor or the DEQ Northern Virginia Regional Offi ce
the foreign country. For the purposes of this credit, possessions
in Woodbridge at 703-583-3900. You are not required to submit a
of the U.S. are considered foreign countries. Any foreign country
specifi c form for the emissions testing equipment credit.
that does not qualify for the federal tax credit [IRC Section 901(j)]
Clean Fuel Vehicle - You are not required to submit a specifi c form
does not qualify for this Virginia credit. To claim this credit, complete
as part of your tax return to document the purchase of a clean-fuel
Schedule CR and attach a copy of the return fi led in the foreign
vehicle. However, you should retain documentation to support your
country or other proof of tax payment to the foreign country.
claim for the tax credit as an audit may be conducted to verify any
credit claimed under these provisions.
2

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category: Financial
Go
Page of 4