Green Job Creation Tax Credit
For taxable years beginning before January 1, 2025, the Green Job Creation Tax Credit allows a credit against the Virginia individual or corporate income tax for each new green job that pays an annual salary of at least $50,000 that is created within the Commonwealth by the taxpayer. The amount of the annual credit for each new green job will be $500 for each job with an annual salary of $50,000 or more.
Each job must:
- Be considered a “green job.” A “green job” means employment in industries relating to the field of renewable, alternative energies, including the manufacture and operation of products used to generate electricity and other forms of energy from alternative sources that include hydrogen and fuel cell technology, landfill gas, geothermal heating systems, solar heating systems, hydropower systems, wind systems, and biomass and biofuel systems.
- Require a minimum of either 35 hours of an employee’s time per week for the entire normal year of such taxpayer’s operations. The “normal year” consists of at least 48 weeks, or 1,680 hours per year.
- Have primary work activity related directly to the field of renewable, alternative energies.
- Provide standard fringe benefits.
- Be continuously filled in the Commonwealth during the respective taxable year.
Green Job Tax Credits may not be used in conjunction with the Major Business Facility Job Tax Credit for the same employee or for federal tax credits for investments in manufacturing facilities for clean energy technologies that would foster investment and job creation in clean energy manufacturing.
- All business taxpayers should be registered with the Department of Taxation before completing Form GJC. Those who are not registered should complete Form R-1.
- Form GJC and any supporting documentation must be completed and mailed at least 90 days prior to the due date of the return. They must apply each year they are eligible to earn credit for each job that is continuously filled (not to exceed five years).
- Taxpayers who do not receive notification of allowable credit amounts before their Virginia income tax return due date may file during the extension period or file their regular return without the credit and then file an amended tax return after receipt of notification of the allowable credit amount to claim the tax credit.
- Taxpayers provide a copy of the W-2 for each eligible employee. Guaranteed payments: provide a copy of the Schedule K-1 (Form 1065) and a statement indicating if the payments were for services or the use of capital.
- Upon receiving notification of the allowable credit amount, taxpayers may claim the allowable credit amount on the applicable Virginia income tax return and compute any carryover credit amount.
- Each pass-through entity files Form PTE with the Department within 30 days after the credit is granted. Credit must be allocated among owners in proportion to each owner’s percentage of ownership or participation in the pass-through entity.
Where is more information as to what qualifies as a “green job”?
Visit the Secretary of Commerce and Trade’s page thoroughly describing eligibility.
What additional documents need to be attached to Form GJC?
The GJC must include a copy of the W-2 for each eligible employee as well as a copy of the Schedule K-1 (Form 1065) and a statement indicating if the guaranteed payments were for services or the use of capital.
If a taxpayer qualifies for both the Green Jobs Creation Tax Credit and the Enterprise Zone Program, may they apply for both?
Yes, if they meet the qualifications for both programs, they are eligible to receive benefits from both programs.
Does an application need to resubmitted each year?
Yes. Form GJC and any supporting documentation must be submitted for each year eligible to earn credit for each job continuously filled (not to exceed five years).