Virginia Form Rdc – Fill Out and Use This PDF

The Virginia Research and Development Expenses Tax Credit Application, designated as Form RDC, serves as a catalyst for businesses to engage in innovation within the state by offering tax credits for qualified research and development expenses. Aimed at businesses operating in Virginia, this form must be accompanied by necessary documentation and submitted by September 1 of the relevant tax year to be considered eligible for the credit. For detailed instructions and to ensure your application is accurately filled and submitted on time, click the button below.

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Virginia Form Rdc PDF Details

In Virginia, companies seeking to reduce their tax liability have the opportunity to apply for the Research and Development Expenses Tax Credit using the Form RDC. This form is intended for businesses to claim credits against their tax for qualifying R&D expenses incurred within the state. Applicants must furnish taxpayer information including the business name and contact details, and specify the tax year for which they are applying. The form comprises multiple sections, including a detailed instruction on computing the credit via both a primary credit computation and an alternative simplified method. Applicants must enter their Virginia qualified R&D expenses, which may include costs associated with collaborative efforts with Virginia's public colleges or universities. Notably, the form stipulates a September 1 deadline for submission along with supporting documentation. Additionally, it requires information on the company’s number of full-time employees, gross receipts, any prior federal credits received for the same activities, and whether other Virginia tax credits were applied for within the year. The form also addresses whether the R&D activities involved human cells or tissues derived from abortions or stem cells from human embryos. Detailed instructions guide taxpayers on documenting contract research, supply, and wage expenses to properly calculate the credit. For businesses aiming to leverage Virginia’s incentives for innovation through research and development, understanding and accurately completing the Form RDC is essential.

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Form Name	Virginia Form Rdc
Form Length	9 pages
Fillable?	No
Fillable fields	0
Avg. time to fill out	2 min 15 sec
Other names	Fillable Online Form RDC Tax Year - Virginia Tax ...

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VIRGINIA	Application for Research and Development	TAX YEAR
Form RDC	Expenses Tax Credit	__________
		__________

Submit this form and supporting documentation by September 1.

This credit must be approved before being claimed on your return. See the instructions for details.

Taxpayer Information

Business Name

Trading As

FEIN

SSN

Fiscal Year Filer _______________ to _______________

Street Address

City, State, ZIP Code

Email Address

Contact Name

Phone Number

Fax Number

NAICS Code

NAICS Description

Instructions

To compute your credit using the primary credit computation, complete Lines 1-7 of Section 1. Enter all Virginia qualified research and development amounts in Column A. If any portion of Virginia qualified research and development was conducted in conjunction with a

Virginia public college or university, enter those amounts in Column B. Amounts reported on Lines 1-4 of Column A must include any expenses reported on Lines 1-4 of Column B. If electing the alternative simplified method of computing the credit, skip to Section 2. All

applicants must complete Section 3.

	Column A	Column B
Section 1 – Primary Credit Calculation	All Qualified Research and	College and University
Round to the nearest whole dollar.	Development Amounts	Related Research and
		Development Amounts

1.Virginia Qualified Research and Development Expenses. Enter amount paid or incurred during the calendar year. (See Schedule A, Section 1, Line

4, Columns A and B).	$	.00	$	.00

2.College and University Expenses Percentage. If expenses were incurred

in conjunction with a Virginia college or university, divide the amount on

Line 1, Column B by the amount on Line 1, Column A. Enter in Column B.

3.Virginia Base Amount for the Taxable Year. Enter the amount from Schedule B, Line 4a in Column A.

	College and University Base Amount. If expenses were incurred in
	conjunction with a Virginia college or university, multiply the amount in
	Column A by the percentage on Line 2 and enter in Column B.	$	.00	$	.00

4.	Adjusted Expenses Amount. Subtract Line 3 from Line 1.	$	.00	$	.00

5.	Total Eligible Research Expenses. Enter in Column A the lesser of
	$300,000 or the amount from Line 4, Column A.
	Eligible College and University Research Expenses. Enter in Column B
	the lesser of $300,000 or the amount from Line 4, Column B.	$	.00	$	.00

6.	Credit Computation. Multiply Line 5, Column A by 15% (0.15) and enter in
	Column A. Multiply Line 5, Column B by 20% (0.2) and enter in Column B.	$	.00	$	.00

7.Credit Requested. Enter the greater of Line 6, Column A (not to exceed $45,000) or Column B (not

to exceed $60,000).	$	.00

Va. Dept. of Taxation 3101050	Rev. 07/21

PAGE 1

VIRGINIA	Application for Research and Development				TAX YEAR
Form RDC	Expenses Tax Credit				__________
Page 2

Section 2 – Alternative Simplified Credit Calculation			Column A		Column B
			Column A		Column B
See instructions and Schedule C for information on calculating the Adjusted		All Qualified Research and			College and University
			Development Amounts		Related Research and
Calendar Year Qualified Research and Development Expenses.					Development Amounts
1. Total Adjusted Calendar Year Qualified Research and Development
Expenses. Enter the amount(s) from Schedule C, Line 4e in the applicable
column(s). Taxpayers without qualified research and development
expenses for the preceding 3 taxable years, enter the applicable amount(s)
from Schedule C, Line 1a in the applicable column(s).		$	.00	$	.00

2. Credit Computation.
If you incurred research and development expenses for the 3 preceding
taxable years, check here and multiply the amount on Line 1, Column
A and Line 1, Column B (if applicable) by 10% (0.1).
If you did not incur research and development expenses for the
3 preceding taxable years, check here and multiply the amount on
Line 1, Column A and Line 1, Column B (if applicable) by 5% (0.05).		$	.00	$	.00

3.Credit Requested. Enter the greater of Line 2, Column A (not to exceed $45,000) or Column B (not

to exceed $60,000).

.00

Section 3 – Credit Information

1.	Number of full time employees during the year for which the credit is sought.

2.	Total gross receipts or anticipated gross receipts for the taxable year the credit is sought.

3.	If research was conducted in conjunction with a Virginia public or private college or
	university, enter name of college or university. Enclose a copy of the agreement.

4.	Have you ever received a federal credit for these research activities?		Yes (If yes, enclose federal Form 6765)		No

5.	If you applied for any other Virginia tax credits this year, identify the credit(s) below.

6.	Research Field:
	Biotechnology	Cyber Security		Industrial
	Engineering	Food & Beverage Development		Other ______________________
	Medical	Technology

7.	Provide: (1) A description of your research project(s).
	(2) A summary of how this research qualifies as defined in IRC § 41(d).



8.	Do you conduct research and development in Virginia on human cells or tissue derived from
	induced abortions or from stem cells obtained from human embryos?			Yes	No

9.	If you are a pass-through entity, do you plan to allocate your credit?			Yes	No

I (we) the undersigned declare, under the penalties provided by law, that this form (including any accompanying schedules, statements, and enclosures) has been examined by me (us) and is, to the best of my (our) knowledge and belief, a true, correct, and complete application, made in good faith pursuant to the income tax laws of the Commonwealth of Virginia.

Authorized Signature	Title	Date

Printed Name	Phone Number

Email Address	Fax Number

PAGE 2

Form RDC	Research and Development Expenses Tax Credit	Tax Year
Schedule A	Summary of Qualified Expenses	__________

Name as it Appears on Form RDC

FEIN

SSN

Supplemental Forms Checklist

Prior to completing the Form RDC Schedule A, qualified expenses must be recorded on the applicable expense forms. Check the boxes below to indicate which supplemental forms have been used to complete this schedule. See the instructions on these forms for details.

Schedule RD-CON, Research and Development Tax Credits Schedule of Contract Research Expenses: Complete and

submit this schedule if claiming the credit on the basis of contract research expenses.

Schedule RD-SUP, Research and Development Tax Credits Schedule of Supply Expenses: Complete and submit this schedule if claiming the credit on the basis of supplies used in the conduct of qualified research.

Schedule RD-WAGE, Research and Development Tax Credits Schedule of Qualified Wages: Complete and submit this schedule if claiming the credit on the basis of qualified wages.

Instructions for Schedule A

Do not include expenses incurred in relation to research conducted in Virginia on human cells or tissue derived from induced abortions or stem cells obtained from embryos. See the Form RDC instructions and IRC § 41 for additional requirements regarding qualified research

and development expenses.

Section 1 – Summary of Expenses: All filers must complete Section 1. In Column A, enter the total amount of qualified research and development expenses that were reported on the expense schedule(s) listed above. If claiming the Research and Development Expenses Tax Credit for expenses incurred in connection with a college or university, enter those amounts in Column B. The amounts reported in

Column A must include the amounts entered in Column B.

Section 2 – List of Colleges & Universities: Filers who are claiming the credit based on college and university related expenses must report the names of the institutions in Section 2. A copy of the research agreement must also be enclosed with the Form RDC. See the R&D Enclosure Checklist on Page 8 for additional information.

Section 1 – Summary of Expenses
					Column A		Column B
	Expense Type				Column A	College and University
	Expense Type				All Virginia Expenses	College and University
					All Virginia Expenses		Related Expenses
							Related Expenses
1.	Contract Research Expenses
	Column A: Enter amount from Schedule RD-CON, Column G.
	Column B: Enter the amount associated with a college or university.			$	.00	$	.00
2.	Supply Expenses
	Column A: Enter the amount from Schedule RD-SUP, Column C.
	Column B: Enter the amount associated with a college or university.			$	.00	$	.00
3.	Wages
	Column A: Enter the amount from Schedule RD-WAGE, Column C.
	Column B: Enter the amount associated with a college or university.			$	.00	$	.00
4.	Total Qualified Expenses
	Column A: Add Column A, Lines 1-3 and enter result in Column A, Line 4.
	Column B: Add Column B, Lines 1-3 and enter result in Column B, Line 4.			$	.00	$	.00

Section 2 – List of Colleges & Universities
1.			6.

2.			7.

3.			8.

4.			9.

5.			10.

Va. Dept. of Taxation 1600041 Rev. 07/21		PAGE 3

Form RDC	Research and Development Expenses Tax Credit	Tax Year
Schedule B	Worksheet for Computing Virginia Base Amount	_________
	(Primary Method)	_________
	(Primary Method)

Use this schedule when computing the credit using the Primary Credit Calculation.

Name as it Appears on Form RDC

FEIN

SSN

Section 1 – VA Qualified Research and Development Expenses

Fiscal year filers: Include expenditures and gross receipts for Calendar Year 2021 (CY), regardless of fiscal year (FY) incurred.

1a. VA Qualified Research and Development Expenses in CY 2021. For FY filers, this will include a portion of 2 taxable years.

1b. Short year filers only: Enter the number of months included in the short year.

1c. Short year filers only: Divide the number of months in Line 1b by 12.

.00

Section 2 – Determine the Fixed Base Percentage

The Average Qualified Research and Development Expenses for the 3 taxable years ending before the CY 2021.

2a. Expenses for the 3rd preceding taxable year. CY filers: enter expenses for Taxable Year 2018.

FY filers: enter expenses for Taxable Year 2017.

2b. Expenses for the 2nd preceding taxable year. CY filers: enter expenses for Taxable Year 2019. FY filers: enter expenses for Taxable Year 2018.

2c. Expenses for the preceding taxable year. CY filers: enter expenses for Taxable Year 2020.

FY filers: enter expenses for Taxable Year 2019.

2d. Total Expenses. Add Lines 2a-2c.

2e. Average Qualified Research and Development Expenses for the Prior 3 Taxable Years. Divide amount on Line 2d by 3.

The Average Total Gross Receipts for the 3 taxable years ending before the CY 2021.

2f. Gross receipts for the 3rd preceding taxable year. CY filers: enter the gross receipts for Taxable Year 2018.

FY filers: enter gross receipts for Taxable Year 2017.

2g. Gross receipts for the 2nd preceding taxable year. CY filers: enter gross receipts for Taxable Year 2019. FY filers: enter gross receipts for Taxable Year 2018.

2h. Gross receipts for the preceding taxable year. CY filers: enter gross receipts for Taxable Year 2020.

FY filers: enter gross receipts for Taxable Year 2019.

2i. Total Gross Receipts. Add Lines 2f through 2h.

2j. Average Gross Receipts for Prior 3 Taxable Years. Divide Line 2i by 3.

2k. Percentage of Virginia Qualified Research and Development Expenses. Divide Line 2e by 2j

(round to 4 decimal places).

.00

Section 3 – Determine the Virginia Base Amount

The Average Total Gross Receipts for the 4 taxable years ending before the CY 2021.

3a. Gross receipts for the 4th preceding taxable year. CY filers: enter gross receipts for Taxable Year 2017.

FY filers: enter gross receipts for Taxable Year 2016.

3b. Gross receipts for the 3rd preceding taxable year. CY filers: enter gross receipts for Taxable Year 2018.

FY filers: enter gross receipts for Taxable Year 2017.

3c. Gross receipts for the 2nd preceding taxable year. CY filers: enter gross receipts for Taxable Year 2019. FY filers: enter gross receipts for Taxable Year 2018.

3d. Gross receipts for the preceding taxable year. CY filers: enter gross receipts for Taxable Year 2020.

FY filers: enter gross receipts for Taxable Year 2019.

3e. Total Gross Receipts. Add Lines 3a through 3d.

3f. Average Gross Receipts for Prior 4 Taxable Years. Divide Line 3e by 4.

3g. Base Amount. Calendar Year Filers: Multiply Line 2k by Line 3f.

Short Year Filers: Multiply Line 2k by Line 3f. Then multiply the product by Line 1c.

.00

Section 4 – Virginia Base Amount

4a. Virginia Base Amount. Your Virginia Base Amount is the greater of the amount on Line 3g OR 50% (0.5) of the 2021 Virginia Qualified Expenses from Line 1a. Enter here and on Form RDC, Section 1, Line 3,

Column A.

Va. Dept. of Taxation 1600042 Rev. 07/21	PAGE 4

.00

Form RDC	Research and Development Expenses Tax Credit	Tax Year
Schedule C	Worksheet for Determining Adjusted	_________
	Research and Development Expenses
	(Alternative Simplified Method)
	Use this schedule when computing the credit using the Alternative Simplified Credit Calculation.

Name as it Appears on Form RDC

FEIN

SSN

Section 1 – Virginia Qualified Research and Development Expenses

Fiscal year filers: Include expenditures for Calendar Year 2021 (CY), regardless of fiscal year (FY) incurred.

1a.	Virginia Qualified Research and Development Expenses in CY 2021.	Line 1a – Column A	Line 1a – Column B
	In Column A, enter total qualified research and development expenses
	from Schedule A, Section 1, Line 4, Column A. In Column B, enter the total
	qualified college and university related research expenses from Schedule A,
	Section 1, Line 4, Column B (if any). For FY filers, this will include a portion
	of 2 taxable years.	.00	.00

1b.	Short year filers only: Enter the number of days included in the short year.		.00
			.00

1c.	Short year filers only: Divide the number of days in Line 1b by 365 (366 if a leap year).		.00
			.00

Section 2 – Determination of How to Compute the Credit

Were research and development expenses paid or incurred for the 3 taxable years immediately preceding the taxable year for which the credit is being claimed? If “Yes,” complete Sections 3 and 4 below. If no, stop here and enter the amount(s) on Line 1a above on Form RDC Section 2, Line 1.

Yes No

Section 3 – Average Qualified Research and Development Expenses Calculation
	The Average Qualified Research and Development Expenses for the 3 taxable years ending before the CY 2021.

3a.	Expenses for the 3rd preceding taxable year. CY filers: enter expenses for Taxable Year 2018.
	FY filers: enter expenses for Taxable Year 2017.				.00
3b.	Expenses for the 2nd preceding taxable year. CY filers: enter expenses for Taxable Year 2019.
	FY filers: enter expenses for Taxable Year 2018.				.00

3c.	Expenses for	the preceding taxable year. CY filers: enter expenses		for Taxable Year 2020.
	FY filers: enter expenses for Taxable Year 2019.				.00
3d.	Total expenses from preceding 3 taxable years. Add Lines 3a-3c.				.00
					.00

3e.	Average qualified research and development expenses for the preceding 3 taxable years.
	Divide amount on Line 3d by 3. If the credit year is a short taxable year, multiply the average qualified
	research and development expenses for the preceding 3 taxable years by the amount determined in
	Line 1c.				.00

Section 4 – Adjusted Expenses Calculation				Column A.	Column B.
Section 4 – Adjusted Expenses Calculation				All Qualified Research	College and University
For filers with Virginia qualified research and development expenses for the				All Qualified Research	College and University
preceding 3 taxable years				and Development	Related Research and
preceding 3 taxable years				Amounts	Development Amounts
				Amounts	Development Amounts
4a.	Enter the current year expenses. Column A must include the amount
	reported in Column B, if any.			.00	.00

4b.	If expenses were incurred in connection with a Virginia college or university,
	divide the amount on Line 4a, Column B by the amount on Line 4a, Column A.				%

4c.	Column A – Enter the amount from Line 3e.
	Column B – If expenses were incurred in connection with a Virginia college or
	university, multiply the amount on Line 4c, Column A by the percentage on
	Line 4b, Column B.			.00	.00

4d.	Multiply the amount(s) on Line 4c by 50% (0.5).			.00	.00
				.00	.00

4e.	Subtract Line 4d from Line 4a. Enter here and on Form RDC, Section 2,
	Line 1 in the applicable column(s).			.00	.00

Va. Dept. of Taxation		1600043 Rev. 06/21	PAGE 5
			PAGE 5

Instructions for Form RDC

Application for Research and Development Expenses Tax Credit

General Information

The Research and Development Expenses Tax Credit

may be claimed against individual and corporate income taxes for qualified research and development expenses for taxable years beginning on or after January 1, 2011, but before January 1, 2025. The credit may also be claimed against the bank franchise tax for taxable years beginning on or after January 1, 2021, but before January 1, 2025.

If the taxpayer elects the primary method of computing the credit, the tax credit amount is equal to (i) 15% of the first $300,000 in Virginia qualified research and development expenses, or (ii) 20% of the first $300,000 of Virginia qualified research and development expenses if the research was conducted in conjunction with a Virginia public or private

college or university, to the extent the expenses exceed the

base amount. The credit amount cannot exceed $45,000 or $60,000 if the Virginia qualified research was conducted in conjunction with a Virginia public or private university.

At the election of the taxpayer, an alternative simplified

calculation may be used to determine the Research

and Development Expenses Tax Credit. The alternative simplified calculation of the Research and Development Expenses Tax Credit is equal to: 10% of the difference of (i) the Virginia qualified research and development expenses

paid or incurred by the taxpayer during the taxable year

and (ii) 50% of the average Virginia qualified research and

development expenses paid or incurred by the taxpayer

for the three taxable years immediately preceding the taxable year for which the credit is being determined. If the taxpayer did not pay or incur Virginia qualified research and

development expenses in any one of the three taxable years

immediately preceding the taxable year for which the credit

is being determined, the tax credit is equal to 5% of the

Virginia qualified research and development expenses paid

or incurred by the taxpayer during the relevant taxable year.

The aggregate amount of credits allowed to each taxpayer cannot exceed $45,000 or $60,000 if the Virginia qualified research was conducted in conjunction with a Virginia public

or private university.

For taxable years beginning on and after January 1, 2021,

there is a $7.7 million cap on the total amount of credits allowed in any fiscal year. If the total amount of tax credits exceeds the $7.7 million limit, credits will be apportioned on

a pro rata basis.

If the total amount of approved tax credits is less than the $7.7 million credit cap, the Department will allocate

the remaining amount, on a pro rata basis, to taxpayers

already approved for the credit that were subject to the

$45,000 and $60,000 credit limitations. Supplemental

credits will be in the following amounts: if a taxpayer elected

the primary computation, an amount equal to 15% of the second $300,000 in qualified research expenses (or 20% of such expenses if the research is conducted in conjunction

with a Virginia public or private college or university); or if the taxpayer elected the alternative simplified method of

computing the credit, in an amount equal to the excess of the limitation. The maximum supplemental credit amount

is $45,000, or $60,000 if the research is conducted in conjunction with a Virginia public or private university.

Any taxpayer who is allowed a research and development expenses tax credit is not allowed to use the same expenses

as the basis for claiming any other Virginia tax credit. No

taxpayer may claim both this credit and the Major Research

and Development Expenses Tax Credit.

For additional information regarding the credit, see the Research and Development Expenses Tax Credit

Guidelines, which are available on the Department’s website at www.tax.virginia.gov.

Determining the Virginia Base Amount for the Primary Research and Development Expenses Tax

Credit

In order to determine the Virginia Base Amount for the primary credit computation, follow these steps:

Determine Fixed Base Percentage:

Step 1 Determine the average amount of Virginia qualified

research and development expenses for the 3

taxable years preceding the year in which the tax

credit is being claimed. If the taxpayer has been in business for less than 3 years, but at least 1, use the number of years in business instead of 3.

Step 2 Determine the average of the total gross receipts for the 3 taxable years preceding the taxable year that the tax credit is being claimed, or the number of years used in Step 1a, if less.

Step 3 Calculate the percentage of Virginia qualified

research and development expenses by dividing

the average amount determined in Step 1 by the average amount determined in Step 2. This is the “Fixed Base Percentage.”

Do not make any adjustments to account for a short taxable year when computing the fixed-base percentage.

Determine the Virginia Base Amount:

Step 4 Determine average of the total gross receipts for the 4 taxable years preceding the taxable year

that the tax credit is being claimed, or the number of years used for Step 2, if less. For purposes of

determining the Virginia base amount, if any of the

taxable years preceding the credit year that must be accounted for when computing the credit is a short

taxable year, the gross receipts for such year(s) are

deemed to be equal to the gross receipts actually derived in that year, multiplied by 12, and divided by

the number of months in that year.

PAGE 6

Step 5 Multiply the fixed base percentage in Step 3 by the average gross receipts in Step 4.

Step 6 Determine the greater of the amount in Step 5 or

50% of Virginia qualified research expenses for the credit year. This is the “Virginia Base Amount.”

RefertoFormRDC,ScheduleB,ResearchandDevelopment

Expenses Tax Credit Worksheet for Computing Virginia

Base Amount (Primary Method), for detailed instructions on calculating the base amount.

Computing the Average Amount of Virginia Qualified Research and Development Expenses for Determining the Credit Using the Alternative Simplified Method

If electing to compute the Research and Development

Expenses Tax Credit using theAlternative Simplified Method,

the taxpayer must complete Form RDC, Schedule C to determine the average amount of Virginia qualified research and development expenses on which the credit amount will be calculated. Taxpayers who calculate the credit based on less than 3 years of qualified research and development expenses must complete Sections 1 and 2 on Form RDC, Schedule C. Taxpayers who calculate the credit based on qualified research and development expenses for the 3

taxable years preceding the credit year must complete all sections of Form RDC, Schedule C.

When determining the average amount of Virginia qualified

research and development expenses for the 3 years preceding the credit year, if 1 or more of the 3 taxable years preceding the credit year is a short taxable year, then the

Virginia qualified research and development expenses for that year must be modified by multiplying that amount

by 365 (366 in a leap year) and dividing the result by the number of days in the short taxable year.

Definitions

Virginia gross receipts – whole, entire, total receipts, without deduction.

Virginia qualified research – qualified research, as defined in IRC § 41(d), as amended, that is conducted in Virginia. In general, this is research that is undertaken for the purpose

of discovering information that is technological in nature and the application of which is intended to be useful in the development of a new or improved business component of

the taxpayer.

Virginia qualified research and development expenses

–qualified research expenses, as defined in IRC § 41(b), as amended, incurred for Virginia qualified research. In general, this is the sum of the in-house research expenses and the contract research expenses.

Stem Cell Research

Research and development expenses that are paid or incurred for research conducted in Virginia on human cells or tissue derived from induced abortions or from stem cells obtained from embryos do not qualify for the credit.

However, if a taxpayer engaged in research in Virginia

on human cells or tissue derived from induced abortions

or from stem cells obtained from human embryos, it may

receive a nonrefundable credit for other Virginia qualified

research and development expenses. If the amount of nonrefundable credit that a taxpayer is allowed to claim exceeds the taxpayer’s tax liability for the taxable year, then the excess amount of credit will not be refunded to

the taxpayer and cannot be carried over to future taxable years. Research and development expenses that are paid or incurred for research conducted in Virginia on nonhuman embryonic stem cells may qualify for the credit.

When to Submit Application

Form RDC and any supporting documentation must be completed and mailed no later than September 1.

For any application received without a postmark, the date received by the Department will be used to determine if the application was received by the filing deadline.

What to Enclose

To allow us to process this application, provide the following:

•Outline of the type of research and development being conducted in Virginia.

•Form RDC, Schedule A to summarize the information reported on the supplemental expense schedules. You must retain a copy of any supporting documentation of these expenditures.

•The following supplemental expense schedules, as applicable:

–Schedule RD-CON (contract research expenses)

–Schedule RD-SUP (supply expenses)

–Schedule RD-WAGE (qualified wages)

•Form RDC, Schedule B and details regarding the calculation of your Virginia base amount, if electing the primary credit computation.

•Form RDC, Schedule C if electing the alternative simplified computation. Enclose a copy of the research agreement if reporting expenses in connection with a

Virginia public or private college or university.

Upon request, you may be required to provide proof of

purchase, such as an invoice, receipt, cancelled check, bank

statement, or credit card statement.

Where to Submit Application

Submit Form RDC and enclosures to the Virginia

Department of Taxation, ATTN: Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715 or fax it to (804) 774-3902.

What to Expect from the Department

If the Department needs additional information the

agency will contact you by November 1 and you will have

until November 15 to respond. If you have not received acknowledgement of your application by November 15, call (804) 786-2992.

The Department will issue the credit by November 30. If you have not received your credit certification by December 15, call (804) 786-2992.

PAGE 7

What Does the Taxpayer Need to Do

Upon receiving notification of the allowable credit amount, taxpayers may claim the allowable credit amount on the applicable Virginia income tax return. Taxpayers who do not receive notification of allowable credit amounts before their Virginia income tax return due date may file during the extension period or file their regular return without the credit and then file an amended tax return after receipt of notification of the allowable credit amount to claim the tax credit. As an enclosure with their return, a corporation must file Schedule 500CR; an individual must file Schedule CR; a pass-through entity must file Schedule 502ADJ; and a bank franchise must file Form 64, Schedule CR.

IMPORTANT

Online Worksheet: Spreadsheet template is available for download on our website, www.tax.virginia.gov. Use these spreadsheets to compute the Virginia Base Amount when

using the primary calculation method to compute the Research and Development Expenses Tax Credit.

All business taxpayers should be registered with the Department before completing Form RDC. If you are not registered, complete Form R-1.

If the tax return upon which this credit will be claimed is due

on or before November 30, you may need to either submit an extension payment for any tax due or file an amended return once you have received the credit certification.

Pass-Through Entities

A partnership, limited liability company, or electing small business corporation (S corporation) may elect to receive and claim the credit at the entity level. If this election is not

made, credits must be allocated to the individual partners, members, or shareholders in proportion to their ownership interests in such entities or in accordance with a written

agreement entered into by such individual partners, members, or shareholders.

Each pass-through entity must file Form PTE with the Department when allocating this credit to its participants. Form PTE should be filed within 30 days after the credit is granted, but at least 90 days prior to the participants filing their income tax returns. Failure to file Form PTE may result in the credit claim being disallowed and/or a delay in processing the participant’s return. This information should be sent to: Virginia Department of Taxation, ATTN: Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715 or you may fax it to (804) 774-3902. Do not do both.

All pass-through entities distributing this credit to its participants, including owners, shareholders, partners, or

members, must give each such participant a Schedule VK-1,

Owner’s Share of Income and Virginia Modifications and

Credits.

Where To Get Help

Write to the Virginia Department of Taxation, ATTN: Tax Credit Unit, P.O. Box 715, Richmond,VA 23218-0715 or call (804) 786-2992.

PAGE 8

Form RDC	Research and Development Expenses Tax Credit		Tax Year
Checklist	Enclosure Checklist		_________
	Must be included with Form RDC

Name as it Appears on Form RDC		FEIN
		FEIN
		SSN

All expenses must be for the calendar year of the application, regardless of fiscal year incurred.

Provide:

1)A description of your research project(s).

2)A summary of how this research qualifies as defined in IRC § 41(d).

Check the applicable box on Form RDC to indicate whether you conduct research and development in Virginia on

human cells or tissue derived from induced abortions or from stem cells obtained from human embryos.

The Form RDC Schedule A. Include the applicable expense schedule(s) that have been used to complete the Schedule A.

The Schedule RD-CON, if claiming the credit on the basis of qualified contractor research expenses.

Note: For purposes of computing your qualified research expenses, contract research expenses are included

as follows: 1) 65% of any amount paid to a nonemployee for qualified research; 2) 75% of any amount paid to a qualified research consortium for qualified research; and 3) 100% of any amount paid to an eligible small business, an institution of higher education as defined in IRC § 3304(f), or an organization that is a federal laboratory as defined in IRC § 3304(f).

Any individual who receives a Form 1099 is considered an independent contractor and his/her payroll expenses

must be reported at 65%.

The Schedule RD-SUP, if claiming the credit on the basis of qualified supply expenses used in the conduct of qualified research.

The Schedule RD-WAGE, if claiming the credit on the basis of qualified wages as defined by IRC § 3401. Include employee full names, complete SSNs, and salary allocated to Virginia qualified research and development activities. To ensure that all of your qualifying employees can be verified, you must provide their complete SSN. Wages reported without complete SSNs may not qualify for the credit. If reporting more than 25 employees, you may submit an electronic copy of the wage information using the same format as Schedule RD-WAGE. For instructions on how to send the wage information electronically, contact the Department’s Tax Credit Unit at (804) 786-2992.

The Form RDC Schedule B Worksheet and details regarding the calculation of your Virginia base amount, if electing the primary credit computation. To obtain the worksheet in a spreadsheet format, visit www.tax.virginia.gov.

The Form RDC Schedule C Worksheet, if electing the alternative simplified computation of the Research and

Development Expenses Tax Credit.

A copy of the research agreement if any of the Virginia qualified research was conducted in conjunction with a

Virginia public or private college or university.

Proof of payment, such as a copy of a cancelled check or statement of electronic transfer, for university-related research when payments are made directly to the university.

A copy of federal Form 6765, if you have ever received a federal credit for these research activities.

The Department will be unable to process the application until all of the required enclosures have been submitted.

PAGE 9

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Part number 1 for filling in Virginia Form Rdc

2. When the last array of fields is done, it's time to add the necessary specifics in College and University Expenses, Virginia Base Amount for the, Schedule B Line a in Column A, College and University Base Amount, Adjusted Expenses Amount Subtract, or the amount from Line Column A, Eligible College and University, Credit Computation Multiply Line, Credit Requested Enter the, to exceed, Va Dept of Taxation Rev, and Page in order to move on further.

College and University Expenses, Eligible College and University, and Credit Computation Multiply Line of Virginia Form Rdc

3. Completing Virginia Form RDC Page Section, Credit Computation, If you incurred research and, If you did not incur research and, Credit Requested Enter the, to exceed, Section Credit Information, Total gross receipts or, Have you ever received a federal, Yes If yes enclose federal Form, If you applied for any other, Research Field, Biotechnology, Engineering, and Cyber Security is essential for the next step, make sure to fill them out in their entirety. Don't miss any details!

Virginia Form Rdc conclusion process outlined (portion 3)

4. Now proceed to the next form section! In this case you have all these Medical, Technology, Provide A description of your, A summary of how this research, Do you conduct research and, induced abortions or from stem, Yes, If you are a passthrough entity do, I we the undersigned declare, Yes, Date, Title, Printed Name, Email Address, and Phone Number blank fields to do.

Virginia Form Rdc conclusion process detailed (step 4)

5. The form should be finished by filling in this area. Here there's a full set of blank fields that need specific details in order for your document submission to be complete: Form RDC Schedule A, Summary of Qualified Expenses, Name as it Appears on Form RDC, FEIN SSN, Supplemental Forms Checklist Prior, Schedule RDCON Research and, Schedule RDSUP Research and, Schedule RDWAGE Research and, Instructions for Schedule A, Do not include expenses incurred, and Section Summary of Expenses All.

Step # 5 in filling out Virginia Form Rdc

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