Virginia R&D Tax Credit Summary

R&D Tax Credit Available:

Yes - The credit is effective for taxable years beginning on or after January 1, 2016.
Credit expires on December 31, 2022

Eligible Entities:

C-Corporations, S-Corporations, LLCs, Partnerships

Deadline for Tax Filing:

Application due by 7/1

Data Required to Compute Credit:

  • Claim Period VA Qualified R&D Expenses (QREs)
  • VA QREs for Prior 3 Years
  • Gross Receipts for Prior 4 Years

Credit Carryforward:

None for RDC / 10 Years for MRD

R&D Credit Summary:

Primary VA R&D Credit Method (RDC) - the credit is equal to:

  • 15% of the first $300,000 in Virginia qualified R&D expenses, or
  • 20% of the first $300,000 of Virginia qualified R&D expenses if the research was conducted in conjunction with a VA college or university, to the extent the expenses exceed the base amount.

Alternative Simplified Method (new for 2016):

  • 10% of the difference of VA QREs for the taxable year and 50% of the average VA QREs incurred for the three preceding taxable years.

Note: Major Research and Development Expenses Tax Credit' (MRD) is available for companies with VA QREs in excess of $5 million for the claim tax year.

Special Notes:

  • The total amount of credits granted for each tax year cannot exceed $7 million.
  • The credit amount cannot exceed $45,000 or $60,000 if the Virginia qualified research was conducted in conjunction with a Virginia public or private university.
Research Tax Credit
Important Links and Forms

VA Form MRD (Major R&D Credit)
VA Tax Website

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