Virginia Major Business Facility Job Tax Credit and Instructions

Major Business Facility Job Tax Credit and Instructions
Form 304 - Major Business Facility Job Tax Credit
Virginia
Major Business Facility Taxable Year
Form 304 Job Tax Credit Application _________

*VA0304123888*

A separate Form 304 must be completed for each major business facility or qualified job expansion.
Fiscal Year Filers: Begin Date

, and End Date

Name of Company

FEIN

Street Address

Entity Type: (Check One)

City, State, and ZIP Code

C Corporation

S Corporation

Partnership

LLC

 Other

Have you applied for any other credit(s) this year? If yes, indicate which credits.
If you applied for a Green and Alternative Energy Job Creation Tax Credit, International Trade Facility Tax Credit, or Enterprise Zone Creation Grant for
the same jobs ­– STOP – you do not qualify for the Major Business Facility Job Tax Credit.
1a. Enter the North American Industry Classification System (NAICS) Code for the company’s primary business in Virginia_______________________
1b. Enter the Industry Description
2a.

Check here if two or more affiliated companies have aggregated the number of jobs that were created for purposes of qualifying for this credit, and
enclose a separate schedule showing the name of each affiliated company, the Virginia Account Numbers, the Federal Employer Identification
Numbers, the NAICS codes, and the voting percentages (as defined in Va. Code § 58.1-439(S)).

2b. Qualifying Threshold
Tier 1
100 (for expansions prior to January 1, 2010)
Tier 1
50 (for expansions on or after January 1, 2010)

Economically Distressed Area/Enterprise Zone
Tier 2
50 (for expansions prior to January 1, 2010)
Tier 2
25 (for expansions on or after January 1, 2010)

2c. This major business facility is located in the city / county of

, Virginia.

Date facility established or expanded

This is a new facility.

Number of qualifying employees prior to first expansion

This is an expanded facility.

(See instructions)

2d. Date range from which the credit is based (minimum 24 months, maximum 35 months)

.

Expansion Period (12 months) ________________________ Credit Year ________________________
Filing Sequence

  Credit Year

  Year 2

  Year 3

  Year 4

  Year 5

  Year 6

You must include Schedule A and the Schedule A Worksheet for all filing years.
2e. Have you had an expansion before?

Yes –or–

No. If yes, what year ____________ and number on Line 3a for that expansion ________?

3. Number of Qualifying Employees (See instructions):
If completing this form for the credit year (the first taxable year following the taxable year in which the major business facility was established or
expanded), complete Schedules A and B, then enter the total on Line 3a.
For each of the 5 taxable years after the credit year, enter on Line 3a the number of qualifying employees for the credit year (this should be a constant
number). For Line 3b, enter the overall number of qualifying employees, based on your quarterly filings with the Virginia Employment Commission
for the current year. See the instructions for guidance on computing the amount on Line 3b. (If the number of qualifying employees in any of these
5 years is less than in the initial credit year, a credit recapture may be required on Line 8. See the instructions for Line 8 for additional information.)
3a. Number of qualifying employees in the credit year.

3a.

3b. Overall number of qualifying employees in the current year for this expansion
See Schedule A and Schedule A Worksheet.

3b.

3c. If Line 3b is Less than Line 3a. Enclose a schedule showing the computation for recapture.

3c.

4. Threshold amount – Enter the amount from 2b.

4.

5. Number of credit year qualifying employees – Subtract Line 4 from Line 3a.

5.

6. Total credit allowed for this major business facility or expansion – Multiply Line 5 by $1,000.

6.

7. Current year credit – Multiply Line 6 by 1/2.

7.

8. Credit to be recaptured this year (if applicable).

8.

9. Adjusted credit – Subtract Line 8 from Line 7 (if applicable)

9.

Declaration: I, the undersigned officer or other person authorized to act on behalf of the business entity, have read and understand the limitations and
restrictions set forth for this application and the associated tax credit.
Authorized Signature

Printed Name

Preparer Name

Preparer Email

Va. Dept. of Taxation  2601149-W  Rev. 08/23

Title

Date
Preparer Phone Number

Form 304
Schedule A

Major Business Facility Job Tax Credit
List of Qualifying Full-Time Employees

Taxable Year
_________

•	 Complete this schedule for each year (1-6) that Form 304 is filed.
•	 Enclose a list of all full-time and full-time equivalent employees that were used to qualify for this credit.
•	 List must be in the format shown in the sample below.
•	 No more than two part-time employees can be used as the equivalent of one full-time employee.
Two or more affiliated companies may elect to aggregate the number of jobs that were created for qualified full-time
employees as the result of the establishment or expansion by the individual companies to qualify for this credit. "Affiliated
companies" means two or more companies that are related to each other such that one company owns at least 80% of the
voting power of the other (or others), or at least 80% of the voting power of two or more companies is owned by the same
interests. For each month, enter the total number of qualifying full-time or equivalent full-time employees on Schedule B.
Each qualifying full-time position must:
(a)	be of indefinite duration, and have been created by the taxpayer as a result of the establishment or expansion of a
major business facility in Virginia; and
(b)	require a minimum of 35 hours per week for the entire year (minimum of 48 weeks); or
(c)	require the employee to work a minimum of 35 hours per week for the portion of the taxable year in which the
employee was initially hired for, or transferred to, the facility in Virginia.
Note that the hours of two qualifying part-time employees may be combined to qualify as one "equivalent" full-time employee.
Seasonal or temporary positions, and jobs created when a job function is shifted from an existing location in Virginia to the
new major business facility and positions in building and grounds maintenance, security and other such positions which are
ancillary to the principal activities performed by the employees at a major business facility do not qualify.
"Qualified full-time employees" may include the employees of a contractor or a subcontractor if they are permanently
assigned to the taxpayer's major business facility. The taxpayer must be able to provide evidence to the Department of a
contractual agreement with the contractor or subcontractor prohibiting the contractor or subcontractor from also claiming
these employees in order to receive a credit under this section.
In addition to including your name as it appears on Form 304, your FEIN, and the location of your major business facility or
date of expansion, your list must include the following columns:
Columns A-C:	 Enter the Employee Name, Date of Hire, and Social Security Number of each qualifying employee. If you
are claiming a qualifying employee of a contractor or an affiliated company (see the above paragraph),
make a notation beside each such employee in Column A and enclose a separate schedule showing the
corresponding affiliated company or contractor.
Column D:	

Enter the number of full months that the employee was employed in a qualifying position during the credit
year.

Column E:	

Enter a brief position description or number for the qualifying employee.

Column F:	

Part-time employee hours per week. *Enter the number of hours worked per week by the qualifying
part-time employee. No more than two qualifying part-time employees may be combined to qualify
as an "equivalent" full-time employee.

Column A
Employee Name
(Use Additional Schedules as
Necessary)

Column B
Date of Hire

Column C
Social Security Number

Column D
Column E
Column F
Number of
Brief Position Description/Number
Part-Time
Full Months
Employee*
Employed During
(Number of
the Credit Year
Hours Per Week)

e
l
p

1
2
3
4
5
6
7

m
a
S

Enclose with Form 304, Major Business Facility Job Tax Credit Application
Page 2

Form 304 Schedule A Worksheet

Taxable Year
_________

Use to Calculate Line 3b of Form 304.

Complete the applicable sections for the current taxable year. There should be one line completed for each
applicable section.
Name as it Appears on Form 304

FEIN

Number of employees prior to first expansion. For a new facility, enter 0.. . . . . . . . . . . . . . . .
A.
Number of qualifying
employees in the
credit year. Enter on
Form 304, Line 3a.

B.
Number of
qualifying
employees added.

C.
Number of
qualifying
employees
terminated.

D.
Net amount
of qualifying
employees.
(Columns A + B - C)

SECTION 1 – FIRST EXPANSION
Credit Year
Year 1

Taxable Year 20 ___ ___

Year 2

Taxable Year 20 ___ ___

Year 3

Taxable Year 20 ___ ___

Year 4

Taxable Year 20 ___ ___

Year 5

Taxable Year 20 ___ ___

Year 6

Taxable Year 20 ___ ___

SECTION 2 – SECOND EXPANSION [If applicable]
Credit Year
Year 1

Taxable Year 20 ___ ___

Year 2

Taxable Year 20 ___ ___

Year 3

Taxable Year 20 ___ ___

Year 4

Taxable Year 20 ___ ___

Year 5

Taxable Year 20 ___ ___

Year 6

Taxable Year 20 ___ ___

SECTION 3 – THIRD EXPANSION [If applicable]
Credit Year
Year 1

Taxable Year 20 ___ ___

Year 2

Taxable Year 20 ___ ___

Year 3

Taxable Year 20 ___ ___

Year 4

Taxable Year 20 ___ ___

Year 5

Taxable Year 20 ___ ___

Year 6

Taxable Year 20 ___ ___

Total of Column D. Enter on Form 304, Line 3b.

Enclose with Form 304, Major Business Facility Job Tax Credit Application.
Page 3

Form 304
Major Business Facility Job Tax Credit
Qualifying Employees Schedule
Schedule B
Name as it Appears on Form 304

*VA304B123888*
FEIN

Starting with the first month of the taxable period for this return, enter the total number of qualifying full-time or
equivalent full-time employees from Schedule A for each month. The instructions on Schedule A define qualifying
full-time and equivalent full-time employees. The total number of qualifying employees for the taxable year will be
computed on Line N below and transferred to Form 304, Line 3a. For additional information, see the instructions
for Form 304, Line 3.
Column A

Column B

Column C

Number of Qualifying or Equivalent
Full‑Time Employees

Number of Full Months Employed
During the Credit Year

Multiply Column A by Column B

A

	

12	months

B

	

11	months

C

	

10	months

D

	

9	months

E

	

8	months

F

	

7	months

G

	

6	months

H

	

5	months

I

	

4	months

J

	

3	months

K

	

2	months

L

	

1	month

M Add amounts in Column C, Lines A through L.
N Divide Line M above by 12. Enter here and on Form 304, Line 3a.

Enclose with Form 304, Major Business Facility Job Tax Credit Application.

Page 4

Form 304
Schedule C

Major Business Facility Job Tax Credit
Pass-Through Entity Identification

Name as it Appears on Form 304

*VA304C123888*
FEIN

• Tier 1 and Tier 2 pass-through entities must complete this form.
• Complete this section to identify each taxpayer (individual or business) to which a portion of this credit is distributed.
Enter in Columns D and E the percentage and amount of the current year credit from Form 304, Line 7 that is
distributed to each partner, shareholder, or other pass-through entity owner. Enclose a separate schedule if additional
space is needed. Indicate the type of pass‑through entity which earned this credit below:
Limited Liability Company	

1

Column A
Name

 Partnership	

S Corporation	

Column B
FEIN or SSN

Column C
Address

Other (specify)___________________
Column D
Percentage
%

2
%
3
%
4
%
5
%
6
%
7
%
8
%
9
%
10
%

Enclose with Form 304, Major Business Facility Job Tax Credit Application.
Page 5

Column E
Credit

Instructions for Completing Form 304
Major Business Facility Job Tax Credit Application
Qualifying for the Credit
For taxable years beginning on and after January 1, 1995, but
before July 1, 2025, individuals, estates, trusts, corporations,
banks, insurance companies, and telecommunications
companies may claim Major Business Facility Job Tax
Credits for qualified job expansion in excess of the threshold
amounts established for 1 of the 2 credit tiers. This credit
is not available to retail businesses if retail trade is the
principal activity of the facility. The taxpayer cannot claim
both the Major Business Facility Job Tax Credit, the Green
and Alternative Energy Job Creation Tax Credit, or the
International Trade Facility Tax Credit for the same jobs.
A qualified business firm receiving an Enterprise Zone Job
Creation Grant under Va. Code § 59.1-547 shall not be
eligible to receive a Major Business Facility Job Tax Credit
for any job that was used to qualify for the Enterprise Zone
Job Creation Grant.
"Qualified job expansion" means at least 50 jobs for qualified
full-time employees have been created within a continuous
12-month period ending within a taxpayer's taxable year
(25 jobs if located within an enterprise zone or economically
distressed area).
The thresholds for the 2 credit tiers are as follows:

Computing and Claiming the Credit;
Due Date for Form 304
A company cannot file Form 304 and claim this credit until
the first taxable year following the taxable year in which the
company becomes eligible for the credit by establishing or
expanding a major business facility in Virginia.
A company may enter into a new major business expansion
at the end of each credit year. Each expansion year must
begin on the same date. For example, if your credit year
ends on 12/31/2022 and your expansion year began on
02/01/2020, you can begin a new expansion on 02/01/2023.
Complete Form 304 to compute your credit and forward it
to the Tax Credit Unit at the address below at least 90 days
prior to the due date of your tax return. You will receive a
certification letter confirming your credit amount.

Where to File Form 304
Send your completed Form 304 to: Tax Credit Unit, Virginia
Department of Taxation, P.O. Box 715, Richmond,
Virginia 23219.
NOTE:
•	 Form 304 must be filed for a total of 6 taxable years
following each expansion.

Tier 1: The qualifying threshold amount for Tier 1 is
100 new jobs for the establishment or expansion of a
major business facility in Virginia. Please note that for
taxpayers whose expansion year begins on or after
January 1, 2010, the threshold has been reduced to
50 new jobs.
Tier 2: The qualifying threshold amount for Tier 2 is 50
new jobs for the establishment or expansion of a major
business facility in a locality identified by the Virginia
Economic Development Partnership as an economically
distressed area or has been designated as an enterprise
zone. Please note that for taxpayers whose expansion
year begins on or after January 1, 2010, the threshold
has been reduced to 25 new jobs.

•	 A separate Form 304 must be filed for each major
business facility or qualified job expansion.
•	 Do NOT enclose Form 304 with your tax return.

What To Enclose
To ensure the timely processing of your application, provide
the following:
•	 Schedules A, B, and/or C (if applicable).
•	 Virginia Schedule 500AC, Schedule of Affiliated
Corporations Consolidated and Combined Filers (if
applicable).

Taxpayers can qualify for and claim a credit for only one
tier per facility. Credits may be subject to recapture if the
average number of qualifying employees decreases during
the 5 years following the credit year.

•	 Physical address of each business location for all
expansion facilities.

A qualified company that claims employees for the Major
Business Facility Job Tax Credit or the International Trade
Facility Tax Credit cannot receive a Port of Virginia Economic
and Infrastructure Development Zone Grant (POV Zone
Grant) for any previously claimed jobs.

Each pass-through entity must file Form TCA with the
Department when allocating this credit to its participants.
Form TCA should be filed within 30 days after the credit
is granted, but at least 90 days prior to the participants
filing their income tax returns. Failure to file Form TCA may
result in the credit claim being disallowed and/or a delay in

Pass-Through Entities

Page 6

processing the participant’s return. This information should
be sent to: Virginia Department of Taxation, ATTN: Tax
Credit Unit, P.O. Box 715, Richmond, VA 23218-0715 or
you may fax it to (804) 774-3902. Do not do both.
All pass-through entities distributing this credit to its
participants, including owners, shareholders, partners, or
members, must give each such participant a Schedule
VK‑1, Owner’s Share of Income and Virginia Modifications
and Credits.

Where to Get Help
Write to the Virginia Department of Taxation, P.O. Box 715,
Richmond, VA 23218-0715 or call (804) 786‑2992.
Forms and instructions are available for download from the
Department's website, www.tax.virginia.gov, or by calling
(804) 367-8031.

business facility was established or expanded),
complete Schedules A and B, and enter the amount
from Schedule B, Line N.
Line 3b:	Enter the number of qualifying full‑time employees
reported on the quarterly employment tax reports
filed with the Virginia Employment Commission
for the current year. The number of qualifying
employees must be calculated to 2 decimal places.
Line 3c:	Provide the information requested. If you have
questions, call the Virginia Department of
Taxation, Tax Credit Unit at (804) 786-2992.
Line 6:	 Multiply the amount on Line 5 by $1,000.
Line 7:	 For the credit year and the subsequent taxable
years, enter 1/2 of the credit amount on Line 6.
Exception: Affiliated companies that aggregated
jobs in order to qualify for this credit and file
separate Virginia returns must enter the prorated
current year credit amount here and enclose a
statement reflecting the prorated amount for each
affiliated company.

Forms are also available from the office of your local
Commissioner of the Revenue, Director of Finance, or
Director of Tax Administration.

Form Instructions
Lines that are not specifically mentioned below are
self‑explanatory.
•	

Fiscal year filers: Using your federal tax period, complete
the line at the top of the form.

•	

Name, account number, and federal employer
identification number: Enter the information that is
requested.

•	

By providing an email address on the form, you
consent to allow emailed communications from the
Virginia Department of Taxation related to this tax credit
application. If you do not wish to receive electronic
communications, do not enter an email address in the
space provided on the form.

Line 8:	 Credit to be recaptured this year: If the average
number of qualifying employees, as determined by
your current year quarterly filings with the Virginia
Employment Commission (Line 3b), is less than
the average number of qualifying employees for
your credit year (Line 3a), you may be required
to recapture all or a portion of the Major Business
Facility Job Tax Credit.
Recapture is based on qualified full-time employees,
but is not contingent upon specific employees.
Consequently, recapture will not occur as a result
of employee turnover if average employment does
not decrease.

General Carryover Credit Information
Based on Form 304

Lines 1a through 2e: Provide information for the credit year.
Line 2c:	A "major business facility" is a company that meets
the job threshold amounts and is engaged in
business in Virginia in a qualified industry, including
manufacturing or mining, agriculture, forestry
or fishing, or transportation or communications,
and public utilities. An individual facility does not
qualify for the credit if retail is the principal activity
of such facility. A "qualified full time employee" is
an employee filling a new, permanent full-time
position in a major business facility in Virginia (a
job of indefinite duration requiring a minimum of
35 hours per week).

The Major Business Facility Job Tax Credit is computed in
the credit year and allowed over a 2 year period. This is a
nonrefundable credit. Any unused amount may be carried
forward for the next 10 taxable years.

Line 3:	 Number of qualifying employees: Complete Lines
3a and/or 3b as explained on the form. You may
use substitute Schedules A and B if they contain
the same data.

Complete the Schedule A Worksheet to calculate the
average number of qualifying employees in the current year.
There should be one line completed for each applicable
section. Enter the total from Column D on Form 304,
Line 3b.

Line 3a:	If this is the credit year (the first taxable year
following the taxable year in which the major

Schedule A
Complete Schedule A to identify each qualifying employee
according to the instructions provided. Please complete this
section for each year (1-6) that Form 304 is filed.

Schedule A Worksheet

Page 7

Schedule B (To be completed for the credit year)

Lines M and N:

Complete Schedule B to compute the number of qualifying
employees on a monthly basis.

Line M:	

Add the amounts in Column C, Lines A through L.

Line N:	

Divide Line M by 12. Enter here and on Form 304,
Line 3a.

Lines A through L:
Column A:	 On each line, enter the number of qualified fulltime or equivalent full‑time employees who filled
new permanent (indefinite duration) full‑time
positions in Virginia and were employed for the
same number of months during the credit year.

Schedule C

Column B:	The number of months preprinted in Column B
should be the number of months that the qualifying
employees in Column A on the same line worked
during the credit year.

In addition, a pass-through entity is also required to complete
a Form 502 and send each participant a copy of the
pass‑through entity’s certification letter to enclose with its
income tax return and a Schedule VK‑1.

Tier 1 and Tier 2 pass-through entities must complete
Schedule C for each year that a credit is earned (generally
years 1-3).

Column C:	For each line, multiply the amount in Column A by
the amount in Column B.

Page 8