Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
6/30/2022

23VAC10-110-226. Qualified Equity and Subordinated Debt Investments Tax Credit; general credit provisions.

A. For taxable years beginning on or after January 1, 2001, a taxpayer shall be allowed a credit against the taxes imposed by Articles 2 (Individual Income Tax; § 58.1-320 et seq.) and 6 (Taxation for Estates and Trusts; § 58.1-360 et seq.) of Chapter 3 of Title 58.1 of the Code of Virginia in an amount equal to 50% of such taxpayer's qualified investments made during such taxable year.

B. The aggregate amount of the credit that may be used by any taxpayer per taxable year shall not exceed the lesser of (i) the tax imposed for such taxable year or (ii) $50,000. The credit is not refundable and may not be carried back. Any credit, or portion thereof, not usable for the taxable year in which the credit was earned may be, to the extent allowable, carried over for the next 15 succeeding taxable years or until the total amount of the tax credit earned has been taken, whichever occurs first.

C. The total amount of tax credits available for the Commonwealth's fiscal year shall not exceed $5 million. In the event that the total eligible credit requests exceed the Commonwealth's annual fiscal limitation, each taxpayer shall be granted a pro rata amount as determined by the Department of Taxation. The amount of such prorated credit shall be determined by multiplying a fraction, the numerator of which shall be the credit requested by the eligible taxpayer for such year, and the denominator of which shall be the total credits requested by all eligible taxpayers for such taxable year, by the Commonwealth's annual fiscal limitation of $5 million.

D. The amount of any credit attributable to a qualified investment by a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated to the individual partners, shareholders, or members, as they may determine.

The limitation in clause B (ii) of this section shall be construed to allow individual partners, shareholders, or members to each claim annual credits of $50,000.

Statutory Authority

§§ 58.1-203 and 58.1-339.4 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 18, Issue 11, eff. March 13, 2002.

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