The following credits have expired or been repealed; however, taxpayers with carryover amounts may continue to claim the credits until their eligible amounts are exhausted or as otherwise provided by law. See the individual credit instructions for more information.

Clean-Fuel Vehicle and Advanced Cellulosic Biofuels Job Creation Tax Credit

This credit expired on December 31, 2014.

The Clean-Fuel Vehicle and Advanced Cellulosic Biofuels Job Creation Tax Credit allows a corporation to claim an income tax credit equal to $700 for each job it creates that is related to the manufacture and production of clean fuel and advanced cellulosic biofuel vehicles. The credit is allowed in the taxable year in which the job is created and in each of the two succeeding years.

The credit can be claimed in Part XI of the corporate Schedule 500CR. This credit is not available to individuals.

Reference: Virginia Code 58.1-439.1

Coalfield Employment Enhancement Credit

This credit expired December 31, 2021.

You may qualify to claim this credit if:
  • you have an economic ownership interest in metallurgical coal mined in Virginia, or
  • you have an economic ownership interest in coalbed methane produced in Virginia.

Claim this credit against the following taxes administered by Virginia Tax:

  • individual income tax;
  • fiduciary income tax;
  • corporation income tax

A similar credit covering tax years 1996 - 2016 expired on Dec. 31, 2016. Before it expired, the credit was available for all coal mined by such methods and was not restricted to metallurgical coal.

What’s “metallurgical coal”?

Bituminous coal used in the manufacture of iron and steel. The coal should have a calorific value of 14,000 BTUS or greater on a moisture and ash free basis.

Using the credit

Claim the credit in the 3rd year after you earn it, (e.g. if you earned the credit in 2018, you can claim it on your 2021 return).

Complete Form 306 and attach it, along with the following, to your return:

For additional information, see Va.Code § 58.1-39.2.

Coal Employment and Production Incentive Tax Credit

This credit expires December 31, 2021.

You may qualify to claim this credit if:
  • you’re an electricity generator who purchases Virginia-mined coal to produce power, or
  • you have an economic interest in Virginia-mined coal sold to an electricity generator.
What is it?

An income tax credit equal to $3 per ton of coal purchased and used by the electricity generator, so long as that coal is mined in Virginia. The credit can’t be greater than your tax liability. Carry forward any unused credits for up to 10 years. 

Electricity generators may claim the credit against the following taxes administered by Virginia Tax:

  • corporation income tax
How do you allocate the credit?

Electricity generators may give, or “allocate”, their credits back to the mine where they purchased the coal. Parties should allocate the credit in the contract to purchase the coal.

Persons who receive this allocation should treat the credit in the same manner as the Coalfield Employment Enhancement Credit. Allocated credits are refundable to the person with an economic interest in the coal, and may be claimed against:

  • individual income tax
  • fiduciary income tax
  • corporation income tax
Using the credit

Complete Forms 306 and 306T and attach them, along with the following, to your return:

For additional information, see Va. Code § 58.1-433.1.

Conservation Tillage Equipment Credit

The Conservation Tillage and Precision Agriculture Equipment Credit replaced this credit December 31, 2020.

You may qualify to claim this credit if:

You’re a farmer who invests in certain equipment designed to reduce soil compaction and disturbance.  

What is it?

An income tax credit equal to 25% of what you spent on qualifying equipment.  You can claim a credit of up to $4,000 on your return, not to exceed your tax liability. Carry forward any unused credits for 5 years. 

Claim the credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

What kind of equipment qualifies?

  • “no till” planters and drills, including those attached to equipment you already own; 
  • guidance systems to control traffic patterns designed to reduce soil disturbance

Using this credit

To claim the credit, complete the appropriate credit schedule below and attach to your return.  Also, attach a statement showing the purchase date, description of the equipment purchased, and how you computed the credit.

For more information, see Va.Code § 58.1 - 334.

Day Care Facility Investment Credit

This credit expired on December 31, 2013.

For taxable years beginning on and after January 1, 1997, an employer may be eligible for a credit for expenditures incurred to establish a day-care facility for the children of employees. The maximum credit is $25,000. Virginia Tax may not approve more than $100,000 in total credits in any fiscal year.

To be eligible for the credit, the employer's day care facility must meet the following criteria: (1) the facility shall be operated under a license issued by the Virginia Department of Social Services; (2) the building permit application for the facility must be submitted after July 1, 1996; (3) the facility must be used primarily by the children of the taxpayer's employees and; (4) the Tax Commissioner must approve the credit application before a credit may be claimed. Any unused credit may be carried forward for 3 taxable years.

To apply for this credit, submit a letter of application that specifies the employer's name and location of the facility. You must also provide certification of items (1) and (2) above. Send your application to: Virginia Department of Taxation, Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715.

Individual filers complete Schedule CR, Part XII, and corporate filers complete Form 500CR, Part XIV to claim this credit.

Reference: Virginia Code 58.1-439.4.

Fertilizer and Pesticide Application Equipment Credit

The Conservation Tillage and Precision Agriculture Equipment Credit replaced this credit December 31, 2020.

You may qualify to claim this credit if:

  • You’re a farmer, grower, rancher, or someone else engaged in agricultural production for market; and
  • You purchase equipment designed to more precisely apply fertilizers and pesticides. The equipment must meet standards set by the Virginia Soil and Water Conservation Board; and
  • You have a nutrient management plan in place that your local soil and water conservation district has approved

What is it?

An income tax credit equal to 25% of the cost of the equipment, or $3,750, whichever is less. You can’t claim a credit greater than your tax liability. Carry forward any unused credits for 5 years.

Claim the credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

Using this credit

To claim the credit, complete the appropriate credit schedule below and attach to your return.  

For additional information, please see Va. Code § 58.1-337 and Va. Code § 58.1-436

Food Crop Donation Tax Credit

The Food Donation Tax Credit replaced this one January 1, 2023

You may qualify for this credit if:

You’re a farmer who donates crops you grow to a nonprofit food bank in Virginia.

What is it?

An income tax credit equal to 30% of the fair market value of the crops donated. The total amount of credit for all crop donations you make during the year can’t be greater than $5,000.  Carry forward any unused credits for 5 years.

Claim the credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

Are there any restrictions on how the donated crops are used?

  • The food bank must use the donated crops in a way that provides food for the needy; and
  • The donated crops can’t be used outside of Virginia, and can’t be used to pay for goods or services; and
  • If the food bank decides to sell the donated crops, they can only sell them to the needy, other nonprofit food banks, or other organizations that will use the crops to provide food to the needy.

The food bank that receives your donation will complete Form FCD-2, Virginia Food Crop Donation Certification, and give the certification to you within 30 days of when you donated the crops.

Is there a cap?

Yes.  We can’t issue more than $250,000 in food crop donation tax credits per fiscal year. 

To apply for this credit:

Complete Form FCD-1, and send it to us by February 1.  Late applications will not be eligible.  

We will send you a letter certifying the credit by April 1.

Using the credit:

To claim the credit, complete the following and attach it to your return:

For more information, see Va. Code § 58.1-439.12:12.

Credit for Purchase of Long-Term Care Insurance

This credit expired on December 31, 2013.

Individuals may claim a credit equal to 15% of the amount paid by the individual during the taxable year in long-term care insurance premiums for long-term care insurance coverage for himself, but the total credits for any policy may not exceed 15% of the amount of premiums paid for the first 12 months of coverage. Any unused credit may be carried forward for the next 5 taxable years. In order to determine the amount that may be used as a basis for this credit, the individual must subtract any amount actually included as a deduction on Schedule A of the individual's federal income tax return. In addition, the individual may not claim this credit to the extent the premiums have been used to claim the Virginia deduction for long-term healthcare premiums. It may be possible, however, for an individual to claim this credit and the Virginia deduction in the same year.

Example: This credit is based on the amount paid during the taxable year, even if the months covered by the policy extend into the following taxable year. For example, if an individual purchased a policy on July 1 and paid for 12 months, he would base his credit on the entire payment, even though only 6 months of the coverage period would fall in the taxable year in which he claimed the credit. If however, the individual made payments on a monthly basis, he would claim a credit in the current taxable year for 6 months of premiums and a credit in the second year for the next 6 months of premiums in order to reach the allowed total of 12 months. In that case, the individual could also claim a deduction in the 2nd year for the 6 months of premiums that were not used as a basis for the credit.

Reference: Virginia Code 58.1-339.11 (Repealed)

Low Income Housing Credit

This credit expired on June 30, 2010.

If you are a Virginia taxpayer and you claimed a low-income housing tax credit on your federal income tax return for housing units placed in service in Virginia on or after January 1, 1998, you may qualify to claim the state low-income housing tax credit.

The Virginia credit is a percentage of the federal credit. If in subsequent years you are subject to the federal recapture provisions for this credit, you will also be subject to a recapture amount on your Virginia return.

You must receive certification from the Virginia Department of Housing and Community Development before claiming this credit on your tax return. The allowable credit may not exceed your tax liability. For additional information contact the Department of Housing and Community Development at 804.371.7117.

Individual filers complete Schedule CR, Part XIII, and business filers complete 500CR Part XV to claim the credit.

Reference: Virginia Code 58.1 - 435 and 36-55.63.

Reference: Virginia Code 58.1- 336 (Repealed).

Rent Reduction Program Credit

This credit expired on December 31, 2010.

Owners of rental property who provide a rent reduction to low income tenants who: 1) are over age 62; 2) have a mental disability, or; 3) have been homeless (those in domestic violence and homeless shelters) at any time within the previous 12 months preceding the lease term are eligible to apply for a state income tax credit.

The reduced rent must be at least 15% below the market rate. After January 1, 2000, no credit may be claimed unless credit was validly claimed on the unit for all or part of the month of December 1999. The credit is equal to 50% of the total rent reductions given to eligible tenants during the taxable year. The total amount of credit a taxpayer may claim per taxable year may not exceed their tax liability. Unused credits may be carried forward for 5 years. Total credits approved in a fiscal year cannot exceed $50,000.

For more information and to apply for the credit, contact Virginia Housing.

Individual filers complete Schedule CR, Part VII, and corporate filers complete Form 500CR Part VIII to claim this credit.

Reference: Virginia Code 58.1 -339.9.

Telework Expenses Tax Credit

This credit expired December 31, 2018

This credit is available to employers for eligible expenses incurred for allowing employees to telework under a signed telework agreement for taxable years beginning on or after Jan. 1, 2012, but before Jan. 1, 2022. An employer may be eligible for a credit of up to $1,200 per teleworking employee and/or a maximum of $20,000 for conducting a telework assessment. The amount of credit will not exceed $50,000 per employer for each calendar year. The telework assessment can only be allowed once. The aggregate amount of tax credits that will be issued is capped at $1 million annually. An employer will be ineligible for a tax credit as stated in this section if the employer claims a credit based on the jobs, wages, or other expenses for the same employee under any other provision of this chapter. Employers are not allowed to deduct expenses that are deducted for federal purposes.

The business must apply for reservation of tax credits between Sept. 1 and Oct. 31 of the year preceding the taxable year for which the tax credit is to be earned using Form TEL-1. Send your application to Virginia Tax, Tax Credit Unit, PO Box 715, Richmond, VA 23218-0715. We will send a letter certifying tentative approval of the credit by Dec. 31. The business must also file Form TEL-2 by April 1 of the year following the calendar year that the eligible expenses were incurred. Applications received after the filing deadline will not be eligible for the credit. We will issue the credit by June 30 providing the amount of the credit that can be claimed on the Virginia return is available. Unused tax credit can't be carried forward or carried back against the employer's tax liability.

The amount of the credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company must be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest within the business entity using Form PTE within 30 days after the credit is granted.

The Department of Rail and Public Transportation (DRPT) is available to help guide businesses through the development of a telework program. This includes providing assistance on policy and agreement development, training for teleworkers and managers, and program assessment. For questions about developing a telework program or telework policies, visit the Telework! VA website. You can also get help by calling DRPT at 804.786.4440 or by email at drptpr@drpt.virginia.gov.

Reference: Va. Code § 58.1-439.12:07 

Worker Retraining Tax Credit

The Worker Training Tax Credit replaced this credit January 1, 2019

What is it?

A tax credit equal to:

  • 30% of the costs of providing eligible worker retraining to qualified workers. Claim this credit against your individual income tax, fiduciary income tax, corporation income tax, bank franchise tax, and taxes imposed on insurance companies and utilities, or
  • 35% of the direct costs of providing manufacturing training or instruction to middle and high school students. Claim this credit against your individual or corporation income tax beginning with taxable year 2018. 
What is eligible worker retraining?
What is manufacturing training or instruction for middle and high school students?

Programs offered by manufacturers that:

  • Provide orientation, instruction, or training in the type of manufacturing the business in engaged in,
  • Are for students in grades 6 through 12,
  • Are coordinated with the local school district, 
  • Are held at the business’s plant or facility, or a public middle or high school, and
  • Are certified by the VEDP.

These programs qualify for this credit beginning in taxable year 2018.

How much is the credit, and is there a cap?

Eligible worker retraining: 30% of all classroom training costs. The credit is limited to $200 per student per year if the training takes place in a private school, or $300 per qualified employees being retrained into a STEM or STEAM discipline.  

Manufacturing training for middle and high school students: 35% of direct costs associated with the training. No one manufacturer can claim more than $2,000 credit per year.

We are authorized to issue up to $2,500,000 of retraining credits annually (the cap will be $1 million beginning tax year 2018). If total requested credits exceed this amount, we will prorate the authorized credits.

Is this credit refundable?

No. Your credit cannot be greater than your tax liability. You may carry forward any unused credits for 3 years. 

Credit certification

Apply for certification by completing Form WRC and sending to the appropriate address for the type of program the credit is based on. 

Mail applications to VEDP if the credit is based on 

  • noncredit courses, or
  • manufacturing orientation, instruction and training, or
  • any combination of noncredit courses, manufacturing orientation, instruction and training, or apprenticeships

Mail applications to Virginia Tax’s Tax Credit Unit if the credit is based on apprenticeships alone.

How to claim the credit

Individual and fiduciary filers, complete Schedule CR.

Corporate filers, complete Schedule 500 CR.

Other information

For information on pre-approved apprenticeship programs, contact your Virginia Department of Labor and Industry apprenticeship representative. For information on non-credit course approval, contact VEDP.

The amount of the credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company must be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest within the business entity using Form PTE within 30 days after the credit is granted.

For more information, please see our Worker Retraining Tax Credit Guidelines.