AEC: Conservation Tillage and Precision Agricultural Equipment Tax Credit Application (2024)
Virginia · Virginia Tax · Used for tax years 2024
Virginia Form AEC is an application for the Conservation Tillage and Precision Agricultural Equipment Tax Credit. It reports taxpayer and soil conservation plan information, eligible equipment expenses, and the credit requested. The credit must be approved before it can be claime
Who files this form
Use Form AEC to apply for the Conservation Tillage and Precision Agricultural Equipment Tax Credit before claiming it on a Virginia income tax return.
The credit is available to individuals and corporations that purchase qualifying conservation tillage or precision agricultural application equipment. The form asks for the name of the business or individual engaged in agricultural production for market.
Qualifying partnerships, S corporations, and limited liability companies may receive credit certification. A pass-through entity allocating the credit to its participants must also file Form TCA.
What you'll need
Submit these documents with Form AEC:
- A statement showing the eligible equipment's purchase date, purchase price, description, expenditures, and credit computation.
- A copy of the certified statement signed by both the producer and the person who prepared the nutrient management plan, stating that the plan is being implemented.
- A letter from the local Soil and Water Conservation District (SWCD) showing that the producer has an approved soil conservation plan.
Have your FEIN or SSN, contact information, SWCD district, and soil conservation plan number ready to complete the form.
When claiming the approved credit on the income tax return, a corporation must enclose Schedule 500CR, an individual must enclose Schedule CR, and a pass-through entity must enclose Schedule 502ADJ.
How to file
- Complete the taxpayer and conservation plan information, and check the applicable equipment categories.
- Enter total eligible equipment expenses on Line 1. Multiply that amount by 25% for Line 2. On Line 3, enter the smaller of Line 2 or $17,500.
- Sign the declaration and attach the required supporting documents.
- Submit Form AEC and the documents at least 90 days before the return on which you will claim the credit is due.
Mail to:
Virginia Department of Taxation
ATTN: Tax Credit Unit
P.O. Box 715
Richmond, VA 23218-0715
Or fax to: (804) 774-3902. Do not submit by both mail and fax.
Wait for notification of the allowable credit amount before claiming it on the applicable Virginia income tax return. If notification has not arrived before the return is due, the instructions allow filing during the extension period or filing without the credit and then amending the return after notification. An extension payment for any tax due may be needed.
Pass-through entities allocating the credit must file Form TCA within 30 days after the credit is granted, but at least 90 days before participants file their income tax returns. Use the same mailing address or fax number, not both. Give each participant receiving a share of the credit a Schedule VK-1.
Common mistakes
- Claiming the credit before approval. The credit must be certified before it is claimed on a return.
- Sending the same application by mail and fax. The instructions say to use one method, not both. This also applies to Form TCA.
- Skipping business registration. All business taxpayers should be registered with the Department before completing Form AEC. If not registered, complete Form R-1.
- Entering an email address without wanting email communications. Providing an email address gives consent to emailed communications about this application. Leave it blank if you do not want those communications.
- Failing to file Form TCA when allocating the credit. This may cause a participant's credit claim to be disallowed or delay processing of the participant's return.
Questions people ask
How much is the credit?
The credit equals 25% of eligible equipment purchase expenditures, up to $17,500 in the year of purchase.
Is the credit refundable?
Yes. If the allowable credit exceeds your tax liability for the taxable year, the excess is refunded at 100% of face value within 90 days after the filing date of the income tax return on which you request the refund.
What equipment categories qualify?
Eligible categories include equipment that reduces soil compaction; pesticide and liquid fertilizer sprayers; pneumatic fertilizer applicators; monitors, computer regulators, and height-adjustable booms for sprayers and liquid fertilizer applicators; manure applicators; tramline adapters; and starter fertilizer banding attachments for planters. Contact your local SWCD office for information about eligible equipment.
Where can I get help with the application?
Call the Virginia Department of Taxation's Tax Credit Unit at (804) 786-2992 or visit www.tax.virginia.gov. You may also write to the Tax Credit Unit at P.O. Box 715, Richmond, VA 23218-0715.