Is Your Business Eligible for the Virginia Telework Expenses Tax Credit?
Posted on 09.01.15
By Scott Zickefoose, CPA, CM&AA, Tax Manager
Is your business planning to implement a new telework program, or expand an existing one? Your business may be eligible for a Virginia business tax credit of up to 50,000 dollars.
When do I need to apply for this?
If your business is planning to incur teleworking costs in calendar year 2016, you must reserve this tax credit by October 31, 2015. Unlike other credits, the Virginia Telework Expenses Tax Credit must be applied for ahead of incurring the expenses. The business is required to fill out Virginia Form TEL-1 with estimates of the cost to implement the new or expanded telework program. The Virginia Department of Taxation will provide tentative approval by December 31, 2015. If the requests exceed 1 million dollars, the credit will be prorated.
What costs are eligible for this credit?
Any equipment used to enable an employee to work from home (up to 1,200 dollars per employee) is eligible for this credit. Equipment includes computers, monitors, software (antivirus/security), internet access hardware, and communications equipment. Additionally, the employer can include up to 20,000 dollars of feasibility expenses. These expenses are paid to determine the feasibility of teleworking, installation of the required infrastructure, and any training associated with the new program.
I have a program in place; can I still get this credit?
This credit is only available for expenses incurred in relation to NEW teleworking employees.
What if my employee is based in another state?
The credit is only available for expenses incurred in relation to employees that normally commute to an office based in Virginia.
How much time does my employee have to spend teleworking to be eligible?
An employee is an eligible teleworking employee if the individual works at least one day per week from their home. The employee must enter into a signed teleworking agreement with the employer to qualify.
What is next?
Once you have set up a telework program, you must file Form TEL-2. This form states actual expenses incurred and is due by April 1, 2017. The Virginia Department of Taxation will issue the credits by June 30, 2017.
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Scott works with both large and mid-market clients in the real estate, construction, and manufacturing industries, as well as with private equity firms and emerging businesses. He works closely with his clients to identify tax planning and savings opportunities. His experience includes single and multi-state corporate and flow-through tax planning and compliance, corporate tax provisions (FAS 109 and FIN 48), and individual income taxation. Scott is a member of the Keiter Merger and Acquisition team and Future Leaders group.