ABM: Agricultural Best Management Practices Credit Application (2024)
Virginia · Virginia Tax · Used for tax years 2024
Virginia Form ABM is an application for the Agricultural Best Management Practices Tax Credit. It reports taxpayer information, soil conservation or resource management plan details, eligible expenses, and the regular or enhanced credit requested.
Who files this form
Use Form ABM to apply for Virginia’s Agricultural Best Management Practices Tax Credit. Corporations and individuals must apply before claiming the credit on their income tax returns.
- Individuals: The regular and enhanced credits are available to individuals engaged in agricultural production for market, or with equines that create a need for practices to reduce nonpoint source pollutants.
- Corporations: The regular credit is available to corporations engaged in agricultural production for market. The enhanced credit also covers corporations with equines that create the pollution-control needs described above.
- Approved plan required: The regular credit requires a soil conservation plan approved by the local Soil and Water Conservation District (SWCD). The enhanced credit requires an approved resource management plan.
The text also provides for qualifying partnerships, S corporations, and limited liability companies to receive credit certification and allocate credits to their participants.
When it's due
For this tax year 2024 application, the printed local SWCD deadline is January 1 for certification requests covering expenditures made during the preceding taxable year. The text does not print a calendar year alongside that deadline.
No specific filing date is printed for submitting Form ABM to the Department of Taxation. You must receive notification of the authorized credit amount before claiming it on your income tax return.
What you'll need
Submit these items with Form ABM:
- A statement showing the purchase date and materials needed to implement or install the practice, or professional services needed to develop or design it. Examples include fencing wire, pipeline, posts, seeds, and services from a Virginia-certified nutrient management planner, resource management plan developer, or engineer.
- For the regular credit: A copy of the local SWCD letter confirming that your soil conservation plan is approved.
- For the enhanced credit: A copy of the local SWCD letter confirming that your resource management plan is approved.
- A copy of the credit certification letter issued by the local SWCD. The text also directs applicants to enclose all documentation received from the local SWCD.
To complete the form, have your taxpayer identification number, contact information, SWCD district, plan approval dates, contract completion dates, contract numbers, and eligible expense amounts available.
How to file
- Get local certification first. Obtain an eligibility certificate from your local Soil and Water Conservation District before completing Form ABM.
- Complete the application. Enter your taxpayer information and select the applicable program. Complete Section II, Part I for a soil conservation plan or Part II for a resource management plan. Complete the corresponding credit calculations in Section III. All applicants must complete Section III, Part III for the total requested credit.
- Sign and attach your documents. Complete the declaration and signature section and include the required supporting documentation.
- Mail or fax the application, but do not do both.
Mail to:
Virginia Department of Taxation
ATTN: Tax Credit Unit
P.O. Box 715
Richmond, VA 23218-0715
Or fax to (804) 774-3902.
Wait for the Department’s credit certification before claiming the credit. With the income tax return, corporations must include Schedule 500CR, individuals Schedule CR, and pass-through entities Schedule 502ADJ.
Common mistakes
- Using the same expenses twice: Expenses for the same practice in the same management area cannot support both the regular and enhanced credits.
- Claiming the credit before approval: You must receive notification of the authorized credit amount before claiming it on your return.
- Sending duplicate submissions: Do not both mail and fax Form ABM.
- Skipping the total calculation: All applicants must complete Section III, Part III.
- Entering an email address when you do not want emailed communications: Providing an email address gives consent for application-related emails from the Department.
- Failing to file Form TCA when allocating credits: A pass-through entity’s failure to file Form TCA may cause the credit claim to be disallowed or delay processing of a participant’s return.
Questions people ask
How much is the credit?
The regular credit is 25% of the first $100,000 of eligible expenses, up to $25,000 per taxable year. The enhanced credit is 50% of the first $100,000 of eligible expenses, up to $50,000. The combined credit cannot exceed $75,000 per taxable year.
Can I apply for both credits?
Yes. Complete the applicable parts for both plans. You cannot use expenses for the same practice in the same management area to claim both credits.
Is there a limit on credits available to all applicants?
Yes. Total credits granted to all taxpayers are limited to $2 million each fiscal year and are issued on a first come, first served basis.
What if my credit approval has not arrived by my income tax return due date?
You may file during the extension period, or file your regular return without the credit and then file an amended return after receiving notification of the allowable credit amount.
Where can I get help?
Contact your local SWCD about eligible practices. District contact information is at www.dcr.virginia.gov/soil-and-water/swcdlist. For help with Form ABM or the application process, call the Virginia Department of Taxation at (804) 786-2992.