Virginia Telework Reservation and Confirmation Applications and Instructions

Telework Reservation and Confirmation Applications and Instructions
Form TEL-1/TEL-2
Telework Expenses Tax Credit
Reservation Application

VIRGINIA

Form TEL-1

File between September 1 and October 31.*

Tax Year

___________

This credit must be approved before being claimed on your return.
See the instructions for details.
Name

FEIN

Trading As

Contact Name

Street Address

Office Use Only

City, State, ZIP Code

Phone Number

FAX Number

Email

Entity Type: (Check One)	

Sole Proprietor	

C Corporation	

S Corporation

	

Partnership	

LLC	

Other

Form TEL-1, Telework Expenses Tax Credit Reservation Application, must be filed between September 1 and October 31
of the year preceding the taxable year for which the tax credit is to be earned using anticipated telework expenses. The
Department will provide tentative approval by December 31.
Form TEL-2, Telework Expenses Tax Credit Confirmation Application, must be filed by April 1 of the year following the
calendar year that the eligible expenses were incurred. Once Form TEL-2 is approved, the Department will send a certification
letter by June 30 providing the amount of the Telework Expenses Tax Credit that can be claimed on your Virginia return.
1. 	Projected number of eligible new teleworking employees................................................ _ ________________________
2. 	Projected telework expenses (up to $1,200 per teleworking employee).......................... $_____________________

.00	

3. 	Projected telework assessment costs.
Enter total projected assessment expenses or $20,000, whichever is less..................... $_____________________

.00

4. 	Total requested reservation amount. Enter the sum of projected expenses reported
on Line 2 and Line 3 or $50,000, whichever is less.......................................................... $_____________________

.00

	I certify that:
•		 The telework expenses outlined above would not have been incurred but for the availability of this credit;
•		 The telework agreement between the employer and the participating employee is signed between July 1, 2012 - December 31,
2016;
•		 No deduction for telework expenses will be claimed on the Virginia return;
•		 If a deduction for expenses is claimed on the federal return, an offsetting addition will be claimed on the Virginia return;
•		 No other income tax credit will be claimed on the Virginia return for the same expenses; and
•		 No financial incentives from the Telework!VA program will be used for the same expenses.
Under penalty of law, I have read and understand the limitations and restrictions of this credit.
Authorized Signature

Title

Printed Name

Phone Number

E-mail Address

FAX Number

Date

*File Form TEL-1 between September 1 and October 31 of the year preceding the taxable year for which the tax credit is to be earned.

Telework Expenses Tax Credit
Confirmation Application

VIRGINIA

Form TEL-2

File by April 1*
This credit must be approved before being claimed on your return.

Tax Year

___________

See the instructions for details.
Name

FEIN

Trading As

Contact Name

Street Address

Office Use Only

City, State, ZIP Code

Phone Number

FAX Number

Email

Entity Type: (Check One)	

Sole Proprietor	

C Corporation	

S Corporation

	

Partnership	

LLC	

Other

Form TEL-1, the Telework Expenses Tax Credit Reservation Application, must have been filed between September 1 and
October 31 of the year preceding the taxable year for which the tax credit is earned using anticipated telework expenses.
The Department provided a reservation letter to all qualified taxpayers stating the tentative credit amount by December 31.
Form TEL-2, the Telework Expenses Tax Credit Confirmation Application, must be filed by April 1 of the year following the
calendar year when the eligible expenses were incurred. Also, complete the Telework Expenses Tax Credit Worksheet.
Include the Telework Expenses Tax Credit Worksheet and a copy of your reservation letter when submitting Form TEL-2. If
you did not fill out and receive a reservation letter after submitting Form TEL-1, you cannot submit Form TEL-2. Once Form
TEL-2 is approved, the Department will send a certification letter by June 30 providing the amount of the Telework Expenses
Tax Credit that can be claimed on your Virginia return.
1. 	Number of eligible teleworking employees....................................................................... _ ________________________
2. 	Telework expenses (up to $1,200 per teleworking employee).......................................... $_____________________

.00	

3. 	Telework assessment costs. Enter total expenses or $20,000, whichever is less............ $_____________________

.00

4. 	Total credit requested. Add Line 2 and Line 3 or enter $50,000, whichever is less.......... $_____________________

.00

	I certify that:
•		
•		
•		
•		
•		
•		
•		

The telework expenses outlined above would not have been incurred but for the availability of this credit;
The business outlined above is based in Virginia;
The telework agreement between the employer and the participating employee is effective on or after July 1, 2012;
No deduction for telework expenses will be claimed on the Virginia return;
If a deduction for expenses is claimed on the federal return, an offsetting addition will be claimed on the Virginia return;
No other income tax credit will be claimed on the Virginia return for the same expenses; and
No financial incentives from the Telework!VA program will be used for the same expenses.

Under penalty of law, I have read and understand the limitations and restrictions of this credit.
Authorized Signature

Title

Printed Name

Phone Number

Email Address

FAX Number

Date

*File Form TEL-2, the Telework Expenses Tax Credit Worksheet, and a copy of your reservation letter by April 1
for expenses incurred during the preceding year.

Telework Expenses Tax Credit Worksheet
Complete this worksheet to compute the amount that should be entered on Line 2 of Form TEL-2. Be sure to retain the receipts for your records.

Column A

Column B

Name of Eligible Employee

Description of Teleworking Expenses

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Total Employees:

Column C

Column D

Column E

Teleworking Expenses Expenses Limit

Enter the amount
from Column C
or Column D,
whichever is less

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

$

$1,200.00

$

Total $

Telework Expenses Tax Credit Instructions
General Information
The Telework Expenses Tax Credit is an individual and
corporate income tax credit for employers who (1) incur
eligible telework expenses pursuant to a telework agreement
or (2) conduct telework assessments. This credit is equal to
the amount of expenses incurred during the calendar year
that ends during the taxable year, not to exceed $50,000
each calendar year.
To qualify for a credit for eligible telework expenses incurred
pursuant to a telework agreement, the employer must enter into
a signed telework agreement with the teleworking employee
on or after July 1, 2012, but before January 1, 2017. This
telework agreement must be in accordance with policies set
by the Department of Rail and Public Transportation (DRPT).
Such policies are available on the Telework!VA website at
www.teleworkva.org. The maximum amount of expenses
that can be used in determining the amount of this portion
of the credit is $1,200 per employee.
The portion of the credit for telework assessment expenses is
equal to the costs of preparing an assessment, not to exceed
$20,000. This portion of the credit can only be claimed once
by an employer.
Taxpayers may claim this credit for taxable years beginning
on or after January 1, 2012, but before January 1, 2017. The
aggregate amount of tax credits that will be issued is capped
at $1 million annually. If credit applications exceed the $1
million cap, credits will be allocated on a pro rata basis.
The amount of credit claimed cannot exceed the tax liability of
the taxpayer. There is no carryforward of any unused credit.
Accordingly, even if a taxpayer is granted a credit amount,
he must have sufficient tax liability in order to actually claim
the full credit amount. If the amount of credit granted exceeds
the taxpayer’s tax liability, he may only claim the credit up to
the amount of tax liability for the taxable year. To be eligible
for this credit, the employer is not allowed to deduct the
qualified expenses in any taxable year. If these expenses are
deducted for federal purposes, they will need to be included
as an addition on your Virginia return. Taxpayers are not
eligible for this tax credit if any other Virginia income tax credit
is claimed based on the jobs, wages, or other expenses for
the same employee.
Taxpayers are required to apply to the Department of
Taxation to reserve a portion of the credit. The reservation
application (Form TEL-1) must be filed between September
1 and October 31 of the year preceding the calendar year
in which the eligible telework expenses will be incurred. The
Department of Taxation will provide tentative approval by
December 31. If the applications for the credit exceed the cap,
the credits will be allocated to taxpayers on a pro rata basis.
Taxpayers who received a tentative allocation letter must then
confirm the amount of eligible telework expenses actually
incurred by filing Form TEL-2. Any taxpayer who actually
spends the estimated amount that was listed on Line 4 of
Form TEL-1 will be granted a credit equal to or greater than

the amount listed in the tentative allocation letter. Taxpayers
who spend less than the amount estimated on Line 4 of Form
TEL-1 may be granted a credit amount that is less than the
tentative allocation amount. The final allocation amount
depends on the number of applicants and the amount of
eligible expenses incurred by each applicant.
The Department of Taxation and DRPT intend to coordinate
their efforts to carry out the provisions of this credit.
Any credit attributable to a partnership, electing small business
corporation (S corporation), or limited liability company will
be allocated to the individual partners, shareholders, or
members, respectively, in proportion to their ownership or
interest in such business entities.
“Eligible telework expenses” means expenses incurred
during the taxable year pursuant to a telework agreement,
in an amount up to $1,200 for each participating employee,
that enable a participating employee to begin to telework,
which expenses are not otherwise the subject of a deduction
from income claimed by the employer in any tax year. Such
expenses include, but are not limited to, expenses paid or
incurred to purchase computers, computer-related hardware
and software, modems, data processing equipment,
telecommunications equipment, high-speed internet
connectivity equipment, computer security software and
devices, and all related delivery, installation, and maintenance
fees. Such expenses do not include replacement costs
for computers, computer-related hardware and software,
modems, data processing equipment, telecommunications
equipment, or computer security software and devices at
the principal place of business when that equipment is
relocated to the telework site. Eligible telework expenses may
also include up to a maximum of $20,000 for conducting a
telework assessment on or after January 1, 2012. Such costs
shall be ineligible for this credit if they are otherwise taken
as a deduction by the employer from income in any taxable
year. The costs included and allowed to be taken as a credit
include program planning costs, which may include direct
program development and training costs, raw labor costs,
and professional consulting fees. Such costs shall not include
those for which any other income tax credit is claimed. The
credit for conducting a telework assessment shall be allowed
once for each employer meeting the requirements herein.
“Telework” means the performance of normal and regular
work functions on a workday at a location different from the
place where work functions are normally performed and that is
within or closer to the participating employee’s residence. The
term does not include home-based businesses, extensions
of the workday, or work performed on a weekend or holiday.
“Telework agreement” means an agreement signed by the
employer and the participating employee, on or after July
1, 2012, but before January 1, 2017, that defines the terms
of a telework arrangement, including the number of days
per month the participating employee will telework in order
to qualify for the credit, and any restrictions on the location
3101040 REV. 01/16

from which the employee will telework. This agreement
must be in accordance with policies set by the DRPT.
“Telework assessment” means an optional assessment
leading to the development of policies and procedures
necessary to implement a formal telework program that
would qualify the employer for this credit, including but not
limited to a workforce profile; a telework program business
case and plan; a detailed accounting of the purpose,
goals, and operating procedures of the telework program;
methodologies for measuring telework program activities
and success; and a deployment schedule for increasing
telework activity.

When to Submit Application
File Form TEL-1 and any supporting documentation between
September 1 and October 31 of the year preceding the
calendar year for which the tax credit is to be earned.
File Form TEL-2, the Telework Expenses Tax Credit
Worksheet, and any other supporting documentation by
April 1. For any application received without a postmark, the
date received by the Department will be used to determine if
the application was received by the filing deadline.
IMPORTANT: Only those taxpayers who have filed Form
TEL-1 and received a tentative approval letter are permitted
to file Form TEL-2.
All business taxpayers should be registered with the
Department before completing Form TEL-2. If you are not
registered, complete Form R-1.

Where to Submit Application
Submit forms and attachments to the Department of
Taxation, ATTN: Tax Credit Unit, P.O. Box 715, Richmond,
VA 23218-0715 or fax it to 804-774-3902.

What Does the Taxpayer Need to Do
Upon receiving notification of the tentative credit amount,
taxpayers who meet the requirements set forth in the
tentative approval letter, including actually incurring the
estimated eligible telework expenses, may be granted a
credit after submitting Form TEL-2, Telework Expenses Tax
Credit Confirmation Application. This application must be
submitted by April 1 of the year following the calendar year
that the eligible expenses were incurred. See Form TEL-2 for
instructions on claiming this credit on the applicable Virginia
income tax return.

What to Expect from the Department
If the Department needs additional information, we will
contact you by May 1 and you will have until May 15 to
respond. If you have not received acknowledgement of your
application by May 31, call 804-786-2992.
The Department will issue the credit by June 30. If you
have not received your credit certification by July 15, call
804-786-2992.

What Does the Taxpayer Need to Do
If the tax return upon which this credit will be claimed is due
on or before May 1, you may need to submit an extension
along with a payment for any tax due or file an amended
return once you have received the credit certification.
All business taxpayers should be registered with the
Department before completing Form TEL-2. If you are not
registered, complete Form R-1.

Pass-Through Entities
Each pass-through entity must file Form PTE with the
Department within 30 days after the credit is granted. This
information should be sent to: Department of Taxation, Attn:
Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715
or you may fax it to 804-786-3902. Please do not do both.
All pass-through entities distributing this credit to its owner(s),
shareholders, partners or members must give each a
Schedule VK-1, Owner’s Share of Income And Virginia
Modifications And Credits.

Where To Get Help
DRPT is available to help guide businesses through the
development of a telework program. This includes providing
assistance on policy and agreement development, training
for teleworkers and managers, and program assessment. For
questions about developing a telework program or the policies
for telework agreements, visit the Telework!VA website
at www.teleworkva.org or contact DRPT by phone at
804-786-4440 or by e-mail at [email protected]. For
all other questions, write to the Department of Taxation,
ATTN: Tax Credit Unit, P.O. Box 715, Richmond, VA 232180715 or call 804‑786‑2992.