ABM: Agricultural Best Management Practices Credit Application (2025)
Virginia · Virginia Tax · Used for tax years 2025
Virginia Form ABM is an application for the Agricultural Best Management Practices Tax Credit. It reports taxpayer and conservation plan information, eligible expenses, and requested regular and enhanced credit amounts.
Who files this form
Corporations and individuals seeking this credit must apply using Form ABM before claiming it on their Virginia income tax return.
- Individuals: May qualify if they produce agricultural products for market or have equines that create a need for best management practices to reduce nonpoint source pollutants.
- Corporations: For the regular credit, must be engaged in agricultural production for market. For the enhanced credit, may qualify through agricultural production for market or qualifying equine-related needs.
- Approved plans: 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 instructions also provide for qualifying partnerships, S corporations, and limited liability companies to receive and allocate the credit.
When it's due
For tax year 2025 expenditures, the instructions require requests for SWCD tax credit certification to be filed by January 1 following the taxable year of the expenditures.
The text does not print a specific filing deadline for submitting Form ABM to the Department of Taxation. You must receive notification of the authorized credit amount before claiming the credit on your income tax return.
What you'll need
Submit these documents with Form ABM:
- A statement showing the purchase date and the materials or professional services needed to implement, install, develop, or design the best management practice.
- For the regular credit, a copy of the local SWCD letter confirming approval of your soil conservation plan.
- For the enhanced credit, a copy of the local SWCD letter confirming approval of your resource management plan.
- A copy of the credit certification letter issued by the local SWCD.
The instructions also direct you to enclose all documentation received from the local SWCD. Have your taxpayer identification information, plan approval dates, contract completion dates, contract numbers, and eligible expense amounts available to complete the form.
How to file
- Obtain local certification first. Receive an eligibility certificate from your local SWCD before completing Form ABM.
- Complete the application. Enter your taxpayer information and select the applicable program type. Complete Section II, Part I for a soil conservation plan or Part II for a resource management plan. Complete the corresponding calculations in Section III. All applicants must complete Section III, Part III for the total requested credit.
- Sign the declaration and include the required supporting documents.
- Submit by mail or fax, not 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 of Taxation's credit certification letter before claiming the authorized amount. 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: You cannot use expenses for the same practice in the same management area to claim both the regular and enhanced credits.
- Claiming the credit before authorization: You must receive notification of the allowable credit amount first.
- Sending duplicate applications: Submit by mail or fax, not both.
- Skipping the total calculation: All applicants must complete Section III, Part III.
- Providing an email address unintentionally: Entering an email address means you consent to emailed communications about this application. Leave it blank if you do not want those communications.
- Omitting Form TCA when allocating credits: A pass-through entity's failure to file Form TCA may cause a participant's credit claim to be disallowed or their return processing to be delayed.
Questions people ask
How much is the credit?
The regular credit is 25% of eligible expenses, using no more than $100,000 of expenses, for a maximum credit of $25,000. The enhanced credit is 50% of eligible expenses, using no more than $100,000 of expenses, for a maximum credit of $50,000. Combined credits cannot exceed $75,000 per taxable year.
Is the credit refundable, and is funding limited?
The instructions describe the individual and corporate credits as refundable. Total credits for all taxpayers are limited to $2 million per 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 to claim it after receiving notification of the allowable amount.
What must a pass-through entity do when allocating the credit?
It must file Form TCA with the Department of Taxation. The instructions say to file within 30 days after the credit is granted, but at least 90 days before participants file their income tax returns. The entity must also give each participant receiving a share of the credit a Schedule VK-1.