State program
Virginia Research and Development Expenses Tax Credit
Two parallel programs: a refundable credit for smaller research programs and a non-refundable major research credit.
- Partly refundable
- Pre-approval required
Last reviewed October 2026
Program overview
Virginia operates a refundable research and development expenses tax credit for companies with annual Virginia qualified research expenses below a statutory threshold, and a separate major research and development expenses credit for companies above it. Both programs require an application to the Virginia Department of Taxation by a fixed autumn deadline and operate under annual statewide caps with pro rata reduction if oversubscribed. Enhanced rates apply to research conducted in conjunction with a Virginia public or private college or university.
Eligibility
Taxpayers with qualified research expenses conducted in Virginia who apply by the annual September deadline. The major credit applies once Virginia QREs exceed the statutory threshold.
Benefits
Refundable under the standard program; non-refundable but carried forward under the major research program.
Caps, deadlines and forms
Caps and limits
- Both programs require an application to the Virginia Department of Taxation by a fixed autumn deadline and operate under annual statewide caps with pro rata reduction if oversubscribed.
Deadlines
- Both programs require an application to the Virginia Department of Taxation by a fixed autumn deadline and operate under annual statewide caps with pro rata reduction if oversubscribed.
- Taxpayers with qualified research expenses conducted in Virginia who apply by the annual September deadline.
Forms
Filing forms are listed by the revenue authority: official source (opens in a new tab).
Virginia IDR questions
What an examiner is likely to ask about this credit. S1–S7 apply to every state claim; the rest come from this program's own rules.
- S1Confirm the research was physically performed within Virginia.
- S2Provide the Virginia qualified research expense calculation and base amount.
- S3Reconcile Virginia expenses to the federal Form 6765.
- S4Show how wages and supplies were apportioned between Virginia and other locations.
- S5Provide the Virginia return and credit schedule for each year claimed.
- S6Show the carryforward schedule for unused Virginia credits.
- S7Confirm the entity claiming the credit is the entity subject to Virginia tax.
- VA-1Provide the pre-approval, certification or application filed for the Virginia credit, with its filing date.
- VA-2Show the Virginia refund eligibility tests (such as small business status) were met in each year refunded.
Draft questions for illustration, reviewed by a specialist before any engagement.
Common weak spots
- Expenses for research performed outside Virginia included in the Virginia claim.
- Missing or late pre-approval: the application or certification was not in place when required.
- Caps and proration not modelled, so the expected benefit is overstated.
- Refund claimed without evidence that the eligibility tests were met.
- Base amount computed from incomplete historical records.
See how your claim holds up
The mock audit drafts these questions for your own claim and scores the evidence behind each answer.
Run a mock audit for VirginiaInformation on this page is general in nature, not tax advice. Program details change frequently; always confirm current rules with the relevant revenue authority or engage a specialist before acting. Last reviewed October 2026.
Find out what your research actually qualifies for
A scoping conversation takes thirty minutes and costs nothing. You leave with a view on eligibility, likely credit range and the documentation you would need.
Free R&D mock audit: completely free. Book a call or email hello@creditarmor.ai for a login.