Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
6/27/2022

23VAC10-110-228. Qualified Equity and Subordinated Debt Investments Tax Credit; tax credit application procedure.

A. Eligible taxpayers who qualify for the equity and subordinated debt investment tax credit must make an application on the Taxpayer Application for the Qualified Equity and Subordinated Debt Investments Tax Credit to the Department of Taxation. For any taxable year that ends after January 1, and on or before December 31 of a calendar year, eligible taxpayers must submit an application and supporting documentation requesting the tax credit no later than April 1 of the subsequent calendar year. Subject to the provisions of 23VAC10-110-227, for example, eligible taxpayers that have taxable years ending after December 31, 2000, and before January 1, 2002, an application and supporting documentation requesting the tax credit must be submitted no later than April 1, 2002.

B. Applications must be made on the form prescribed by the Department of Taxation, postmarked no later than the date specified in this section, and delivered to an address prescribed by the Department of Taxation.

C. Each taxpayer shall timely supply all information the Department of Taxation deems necessary to properly determine the allowable credit amount. Such information shall include, but shall not be limited to, the following:

1. A copy of the statement issued by the qualified business pursuant to 23VAC10-110-227 D.

2. The taxable year during which the qualified investment was made.

3. The name, address, federal identification number, and Virginia account number of the taxpayer.

4. A certification by the taxpayer, under penalty of perjury, that the qualified investment meets all conditions outlined in § 58.1-339.4 of the Code of Virginia and these regulations.

5. In the case of a partnership, electing small business corporation (S corporation), or limited liability company, the application shall include the name, address, and social security number of each of its individual partners, shareholders, or members, and a statement as to how any allowable credit shall be distributed to each of its individual partners, shareholders, or members. Notification of the allowable credit amount shall be sent to the entity, and a copy of such notification shall be attached to each individual taxpayer's Virginia income tax return on which the credit is claimed.

D. The Department of Taxation shall review all applications for completeness and notify taxpayers of any questions, omissions, errors, or concerns, no later than June 1. Taxpayers must fully respond to any such notices no later than the two-week period ending no later than June 15.

E. All eligible taxpayers shall be notified by June 30 as to the amount of applicable tax credit that may be claimed for the taxable year for which the request was made.

1. In the case of a partnership, electing small business corporation (S corporation), or limited liability company, notification of the allowable credit amount shall be sent to the entity, and a copy of such notification shall be included with each individual taxpayer's Virginia income tax return on which the credit is claimed.

2. Each S corporation, partnership and limited liability company shall provide a schedule listing the name, address, social security number, and allocable credit amount for each of its individual shareholders, partners or members to the Department of Taxation within 60 days of the Department of Taxation's notice certifying the amount of allowable credit.

F. Eligible taxpayers who will not receive the final certification of their credits prior to the due date of their individual state income tax returns must either file the appropriate return extension request or file their income tax return by the due date, and then amend their return after receiving a credit certification. Amended returns to claim the tax credit must be filed within the applicable statute of limitations.

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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