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
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
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.
- 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.