RDC: Research and Development Tax Credit Application (2024)
Virginia · Virginia Tax · Used for tax years 2024
Virginia Form RDC is the 2024 application for the Research and Development Expenses Tax Credit. It reports qualified Virginia research expenses, research activities, and the credit requested using either the primary calculation or the alternative simplified method.
Who files this form
Use Form RDC to apply for Virginia’s Research and Development Expenses Tax Credit for tax year 2024. The credit is for qualified research and development expenses incurred for research conducted in Virginia. It may be claimed against individual income tax, corporate income tax, or bank franchise tax.
The credit must be approved before you claim it on your return. All applicants must complete Section 3 of Form RDC.
A partnership, limited liability company, or S corporation may elect to claim the credit at the entity level. Otherwise, it must allocate the credit to its partners, members, or shareholders based on ownership interests or a written agreement.
You cannot claim both this credit and the Major Research and Development Expenses Tax Credit.
When it's due
For the tax year 2024 application, the printed deadlines and follow-up dates are below. The text does not specify the calendar year for these dates.
- September 1: Complete and mail Form RDC and supporting documentation no later than this date. If an application has no postmark, the Department uses the date it receives the application.
- November 1: The Department will contact you by this date if it needs additional information.
- November 15: Respond to any request for additional information by this date. If you have not received acknowledgment of your application, call (804) 786-2992.
- November 30: The Department will issue the credit by this date.
- December 15: If you have not received your credit certification, call (804) 786-2992.
What you'll need
Include these items with your application:
- Form RDC and its enclosure checklist. The checklist must be included.
- A description of your research projects and a summary explaining how the research qualifies under IRC § 41(d).
- Schedule A, summarizing qualified expenses.
- Applicable expense schedules: RD-CON for contract research, RD-SUP for supplies, and RD-WAGE for qualified wages.
- Schedule B and details of your Virginia base amount calculation if using the primary method, or Schedule C if using the alternative simplified method.
- A research agreement if research was conducted with a Virginia public or private college or university. Include proof of payment for university-related research when payments are made directly to the university.
- Federal Form 6765 if you have ever received a federal credit for these research activities.
For Schedule RD-WAGE, provide employees’ full names, complete Social Security numbers, and salary allocated to Virginia qualified research and development activities.
Keep supporting expense records. The Department may request proof of purchase, such as invoices, receipts, cancelled checks, or bank or credit card statements.
How to file
- Record qualified expenses on the applicable expense schedules, then complete Schedule A.
- Choose a calculation method. For the primary method, complete Schedule B and Form RDC, Section 1, Lines 1–7. For the alternative simplified method, complete Schedule C and Form RDC, Section 2.
- Complete Section 3, sign the application, and attach the required enclosures and checklist.
- Mail the application and enclosures to:
Virginia Department of Taxation
ATTN: Tax Credit Unit
P.O. Box 715
Richmond, VA 23218-0715
Or fax them to (804) 774-3902.
If reporting more than 25 employees, you may submit an electronic copy of wage information in the same format as Schedule RD-WAGE. Contact the Tax Credit Unit at (804) 786-2992 for instructions.
After receiving notice of your allowable credit, claim it on the applicable return. Attach Schedule 500CR for a corporation, Schedule CR for an individual, Schedule 502ADJ for a pass-through entity, or Form 64, Schedule CR for a bank franchise.
A pass-through entity 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. Send it to the address above or fax it to the number above, but do not do both. Give each participant a Schedule VK-1.
Common mistakes
- Claiming the credit before approval. Wait for notification of the allowable credit amount.
- Using fiscal-year expenses instead of calendar-year expenses. Expenses for this application must be for calendar year 2024, regardless of the fiscal year in which they were incurred.
- Leaving college or university expenses out of Column A. Column A must include the amounts reported in Column B.
- Missing required enclosures. The Department cannot process the application until all required enclosures are submitted.
- Omitting complete employee Social Security numbers. Wages reported without complete SSNs may not qualify.
- Including excluded research expenses. Expenses for Virginia research on human cells or tissue derived from induced abortions, or stem cells obtained from embryos, do not qualify.
- Using the same expenses for another Virginia credit. Expenses used for this credit cannot also support another Virginia tax credit.
- Skipping business registration. Business taxpayers should be registered with the Department before completing Form RDC. If not registered, complete Form R-1.
- Providing an email address without wanting email communications. Entering an email address gives consent to receive Department emails about the application.
Questions people ask
Can I choose how to calculate the credit?
Yes. You may use the primary calculation method with Schedule B or elect the alternative simplified method with Schedule C.
What if my return is due before the credit is approved?
You may file during the extension period, or file your regular return without the credit and amend it after receiving notification of the allowable amount. The instructions also warn that an extension payment for tax due may be needed.
Will I necessarily receive the full amount I request?
No. There is a $15.77 million cap on total credits allowed in any fiscal year. If total credits exceed that amount, credits are apportioned on a pro rata basis. The instructions also provide for supplemental credits when approved credits fall below the cap.
Does receiving a federal research credit prevent me from applying?
The application asks whether you have ever received a federal credit for these research activities. If you have, enclose federal Form 6765.
Where can I get help?
Call the Department’s Tax Credit Unit at (804) 786-2992, or write to Virginia Department of Taxation, ATTN: Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715.