Virginia Research & Development Tax Credit

About This Program

Refundable or nonrefundable income tax credit for Virginia businesses conducting qualifying R&D. Small companies with under $5 million in Virginia R&D expenses receive a 15% refundable credit; larger companies receive a 10% nonrefundable credit on qualifying expenditures.

Key Requirements & Eligibility

• 1R&D must be conducted in Virginia and qualify under IRC Section 41
• 2Small companies (<$5M in VA R&D): 15% refundable credit
• 3Larger companies (≥$5M in VA R&D): 10% nonrefundable credit, 10-year carryforward
• 4Annual statewide cap: $7.76 million — allocated pro-rata if oversubscribed
• 5Apply by June 1 following the tax year