AEC: Conservation Tillage and Precision Agricultural Equipment Tax Credit Application (2025)
Virginia · Virginia Tax · Used for tax years 2025
Virginia Form AEC is an application for the Conservation Tillage and Precision Agricultural Equipment Tax Credit. It reports eligible equipment expenses, soil conservation plan information, and the requested credit, calculated as 25% of eligible expenses up to $17,500.
Who files this form
Use Form AEC to apply for the Conservation Tillage and Precision Agricultural Equipment Tax Credit before claiming it on your Virginia income tax return.
The credit is available to individuals and corporations that purchase qualifying equipment. The instructions also provide for qualifying partnerships, S corporations, and limited liability companies to receive credit certification and allocate the credit to participants.
All business taxpayers should be registered with the Virginia Department of Taxation before completing Form AEC. If you are not registered, complete Form R-1.
What you'll need
Submit these documents with Form AEC:
- A statement showing the eligible equipment’s purchase date, purchase price, description, 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.
You will also need your taxpayer identification number, business or individual contact information, SWCD district, and soil conservation plan number to complete the form.
When claiming the approved credit on your income tax return, attach Schedule 500CR for a corporation, Schedule CR for an individual, or Schedule 502ADJ for a pass-through entity.
How to file
- Complete the taxpayer and conservation plan information, then check the equipment categories that apply.
- 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 and date the application and include the required supporting documents.
- Submit Form AEC and supporting documents at least 90 days before the return on which you will claim the credit is due.
Mail the application to:
Virginia Department of Taxation
ATTN: Tax Credit Unit
P.O. Box 715
Richmond, VA 23218-0715
Or fax it to (804) 774-3902. Do not both mail and fax it.
Wait for notification of the allowable credit amount before claiming it. If notification has not arrived by your return’s due date, the instructions allow filing during the extension period or filing the regular return without the credit and amending it after notification. You may need to submit an extension payment for any tax due.
A pass-through entity allocating the credit must also file Form TCA with the Department. It should be filed 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 both mail and fax. The instructions say to use one method, not both.
- Completing Form AEC before registering the business. Business taxpayers should register with the Department first. Use Form R-1 if you are not registered.
- Entering an email address when you do not want email communications. Providing an email address gives consent for emailed communications about the application. Leave it blank if you do not want them.
- Failing to file Form TCA when allocating the credit. This may cause the 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 qualifying equipment purchase expenditures, up to $17,500 in the year of purchase.
What equipment can 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.
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 apply for the refund.
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. For equipment eligibility questions, contact your local SWCD office.