On the Virginia return, the credits are separated into groups: Nonrefundable Credits, Refundable Credits and Credits to taxes paid to another state.
A nonrefundable credit is a credit that can reduce your tax to $0 but will not produce a refund. A refundable credit can reduce your tax to $0 and produce a refund on your return.
Nonrefundable Credits:
- Enterprise Zone Act Credit - This credit expired June 30, 2019. Only Enterprise Zone Real Property Investment Tax Credit carryover amounts from prior years are allowed.
- Neighborhood Assistance Act Credit - provides tax credits to individuals and businesses that make qualified donations directly to pre-approved Neighborhood Assistance Program organizations whose main function is to administer educational or other services to benefit low-income families.
- Recyclable Materials Processing Equipment Credit – credit for the purchase of equipment to make products out of recyclable materials in a manufacturing environment. Extended through December 31, 2024.
- Conservation Tillage Equipment Credit- expired January 1, 2021. For taxable years beginning on and after January 1, 2021, taxpayers will no longer be able to earn the Conservation Tillage Equipment Tax Credit. Credits earned in prior taxable years may be carried forward for 5 years. In addition, taxpayers formerly eligible for this credit may be eligible for the new Conservation Tillage and Precision Agriculture Equipment Tax Credit (see below).
- Conservation Tillage and Precision Agriculture Equipment Credit: For taxable years beginning on and after January 1, 2021, but before January 1, 2025, a refundable tax credit is available for the purchase of certain types of conservation tillage and precision agricultural application equipment. The credit equals 25% of all expenditures made by the taxpayer for the purchase of certain agricultural equipment certified by the Virginia Soil and Water Conservation Board. The credit amount cannot exceed $17,500 in the year of purchase.
- Precision Fertilizer and Pesticide Credit – For taxable years beginning on and after January 1, 2021, taxpayers will no longer be able to earn the Precision Fertilizer and Pesticide Application Tax Credit. Credits earned in prior taxable years may be carried forward for 5 years. In addition, taxpayers formerly eligible for this credit may be eligible for the new Conservation Tillage and Precision Agriculture Equipment Tax Credit.
- Major Research and Development Credit – credit against taxes for major research and development expenses incurred.
- Vehicle Emissions and Clean-Fuel Vehicle Credit – The Clean-Fuel Vehicle Credit is no longer allowed on the Virginia return. Only carryover credits from prior years are allowed.
- Major Business Facility Job Tax Credit - credit for the creation of at least 50 fulltime positions when expanding a business, if in an enterprise zone reduced to 25 new jobs.
- Foreign Source Retirement Income Tax Credit – credit for individuals who paid tax on pension earned in foreign county.
- Historic Rehabilitation Tax Credit – credit for rehabilitation work of a historic structure.
- Food Crop Donation Credit –For taxable years beginning on or after January 1, 2016, but before January 1, 2022 credit is available for the donation of crops by any individual operating a farm in Virginia which makes a donation to a nonprofit food bank located in Virginia. The credit is equal to 30% of the fair market value of said crops.
- VA Coal Employment and Production Tax Credit – credit for employment levels and the amount of coal produced in the year in the coal mines in VA. The credit is at the rate of $3 per ton for each ton purchased and consumed by the electricity generator provided the coal was mined in Virginia.
- Equity & Debt Investments Tax Credit – you may qualify for a credit equal to 50% of your investment during the taxable year.
- Worker Retraining Tax Credit – expired January 1, 2019. For taxable years beginning on and after January 1, 2019, taxpayers will no longer be able to claim the Worker Retraining Tax Credit. Credits earned in prior taxable years may be carried forward for 3 years.
- Waste Motor Oil Burning Equipment Credit -allowable tax credit for a business that operates a facility in Virginia that acquires/receives motor oil from the public and purchases equipment to burn the used motor oil may be eligible for a tax credit.
- Purchase of Long-Term Care Insurance – EXPIRED - Carry forward for prior years only, credit expired 12/31/2013
- Livable Home Tax Credit – Taxpayers or contractors (licensed) can be eligible for a credit up to $5,000, for the purchase or construction of a new accessible residence or by retrofitting an existing residence.
- Riparian Waterway Buffer Credit - 25% tax credit of the cost of the timber on the land specified as a riparian buffer for the waterway. The credit may not exceed $17,500 or the total amount of tax, whichever is less.
- Credit for Preservation of Land – Credit for the transfer of land or interests for preservation or conservation reasons, after 2007 the tax credit is equal to 40% of the fair market value.
- Biodiesel & Green Diesel Fuels Tax Credit – credit for Virginia producers of green diesel fuel or biodiesel fuel which produce up to two million gallons in a year. This credit is only available during the first 3 years of production. The amount of the credit is $0.01 per gallon and cannot exceed $5,000 annually.
- Community of Opportunity Tax Credit – may be claimed by landlords who participate in the Housing Choice Voucher program and rent qualified housing units located in census tracts with poverty rates of less than 10% in the Richmond Metropolitan Statistical Area, the Virginia Beach-Norfolk-Newport News Metropolitan Statistical Area, and the Washington-Arlington-Alexandria Metropolitan Statistical Area. This credit has been extended to January 1, 2025.
- Green Jobs Creation Tax Credit – tax credit allowed for the generation of new green jobs with an annual salary of at least $50,000. The credit is worth $500, and the taxpayer can create up to 350 jobs and still receive the credit. This credit has been extended to January 1, 2025.
- Farm Wineries and Vineyards Tax Credit – tax credit to establish Virginia wineries and vineyards or the renovation and enhancement of already established wineries and vineyards in Virginia.
- International Trade Facility Tax Credit -credit for adding jobs to an international trade facility or investing into a facility that will then increase trade activities and add new employees for a $3500 per fulltime employee credit.
- Port Volume Increase Tax Credit – tax credit for increasing the amount of cargo you ship through the ports located in Virginia via your manufacturing, agricultural, mining, or gas facility/entities.
- Barge Rail Usage Tax Credit – a tax credit to ship your goods via a barge or by rail rather than using trucks or other type of vehicles on the State of Virginia highways.
- Research and Development Tax Credit – tax credit for eligible expenses for research and development for tax year 2011 through 2025. You can’t claim this credit and the Major Research and Development Expenses Tax Credit in the same tax year.
- Education Improvement Scholarships Tax Credit -a tax credit may be claimed for the donation of money or securities made to scholarship foundations listed on an eligible Virginia Department of Education list.
- Worker Training Tax Credit- a tax credit for certain expenses paid by a business after January 1, 2019 and before July 1, 2022 for eligible worker training. Businesses may claim up to $500 per year per qualified employee or $1000 for a non-highly compensated worker.
- VA Coal Employment and Production Credit -For taxable years beginning on and after January 1, 2001, but before January 1, 2022 this credit is for employment levels and the amount of coal produced in the year in the coal mines in Virginia based on ownership interest in the mine.
Refundable Credits:
- Virginia Earned Income Tax Credit - For tax years 2022-2025 Virginia residents may claim a "Refundable Virginia Earned Income Tax Credit [EITC] Instead of claiming one of the two nonrefundable credits already available." The credit will be equal to 15% of the federal EITC that is claimed in that tax year. This credit is only available for full year residents.
- Agricultural Best Management Tax Credit – credit is for eligible taxpayers which have agricultural production for selling or have equine which generate the need to have a best management practice agriculturally to reduce pollutants.
- Credit Authorized by Virginia Film Office (VFO) – Eligible motion picture production companies receive several refundable tax credits through the VFO along with other incentives. Extended through December 31, 2026
- Research and Development Expenses Tax Credit Authorized - A refundable individual and corporate tax credit is allowable for eligible research and development expenses for taxable years beginning on or after January 1, 2011, but before January 1, 2025.
- Housing Opportunity Credit - effective for taxable years beginning on and after January 1, 2021, but before January 1, 2026, credit for certain low-income building projects in an amount up to the amount of federal low-income housing tax credit allocated or allowed by the Virginia Housing Development Authority to such projects.
Credit for taxes paid to another state
If the same income (from wages) was taxed on both the Virginia resident return and another state's part year or nonresident return, you may be able to claim this credit. For specific details, see Virginia Credit for Taxes Paid to Another State.
Where do I enter it Virginia credits ?
To enter these credits within your account, follow the steps below:
- State Section
- Edit
- Credits
- Choose the section you need based on the credit you are claiming
What else do I need to know?
Some credits require you send an attachment of the PDF, form, supporting documents, certificate, etc. needed to qualify for the credit. The program has provided a space to upload those documents. If you are required to send proof and there is no place to upload the document, please print and mail the return with the supporting documents. If the required information is missing, the state will remove the credit until such time they receive the information.
For additional information about all of these Virginia credits, see the Instructions for Schedule CR