Telework!VA Tax Credit Webinar 
September 30, 2011                            View slide presentation.                     Listen to the webinar. (Advance audio to 5 minute mark.)

In 2011, Governor Bob McDonnell and the Virginia General Assembly approved new tax credit legislation aimed at encouraging private sector telework. Telework, defined as a work arrangement where an employee is allowed to perform normal work duties at a location other than their central work location, is an effective congestion management strategy to remove cars from the highways and has been shown to improve employee productivity, retention and satisfaction. Learn more about the benefits of telework at our page How to Sell a Telework Program to Your Company.

FAQs

What is the maximum tax credit my organization can receive?
The legislation provides for a tax credit of up to $1,200 per employee, up to $50,000 per organization, for eligible telework expenses incurred during taxable years 2012 and 2013.

What expenses are eligible for the credit?
Expenses incurred during the taxable year that allow an employee to begin teleworking are eligible. These expenses can 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. Eligible expenses may also include up to $20,000 for conducting a telework assessment on or after January 1, 2012.

Does my business qualify for the tax credit?
Any business subject to income tax in Virginia is eligible to apply for the tax credit.

What steps do I need to take to apply for the tax credit?
Between September 1 and October 31 in the year prior to earning the tax credit, businesses must apply for tentative approval through the Virginia Department of Taxation. Download a Telework Expenses Tax Credit Reservation Application (Form TEL-1 pdf) and submit to the Virginia Department of Taxation at Tax.Virginia.gov.  The form must be postmarked on or before October 31.

What guidelines do I have to follow?
The Department of Rail and Public Transportation, the sponsor of the Telework!VA program, established guidelines that must be followed to receive the tax credit. Employees must telework at least once a week in order for expenses incurred under the telework agreement to be eligible. Specific guidelines can be found below.

Policy and Guidance

The purpose of the Telework Tax Credit is to remove auto trips by eliminating commute trips to and from work.  Only employees who travel to an office in Virignia qualify.  Expenses for current teleworkers and teleworkers who start teleworking prior to July 1, 2012 do NOT qualify for the tax credit.  Businesses interested in the tax credit for telework expenses must submit a Telework Expenses Tax Credit Reservation Application (Form TEL-1 pdf) with the Department of Taxation.

Businesses are also encouraged to sign up with Telework!VA for assistance with their telework program.

Telework Policies
Businesses must develop a formal telework policy and employee telework agreement. Assistance with policy and agreement development can be received through the Telework!VA program.  A telework policy and agreement are not needed at the time a business applies for the tax credit.  However, those documents and policies must be developed as part of the business' telework program.

Teleworker
To be counted as a teleworker for the purpose of claiming a telework tax credit, an employee must telework at least one day per week. A teleworking employee must enter into a signed telework agreement on or after July 1, 2012, but before January 1, 2014, and must be a new teleworker (not teleworking previously) to qualify for the tax credit.

Eligible Telework Expenses for Teleworkers (up to $1,200 per teleworker)

Only expenses that are directly needed to enable an employee to telework are eligible.  Expenses that would have been incurred for normal business operations, whether or not there are teleworkers, are NOT eligible.  Eligible expenses may include.

• Computer equipment (laptops/netbooks/tablets)
• Networking equipment and software
• Security and antivirus systems
• Internet access
• Communications equipment and services (VoIP, mobile phones, Smartphones, phone service, routers, modems/web cams, VPN)
• Telework center fees

Telework Assessment Expenses (up to $20,000)
Consultant or other expenses to assess existing teleworking (both formal and informal), equipment and training needs, barriers/issues, management and employee support, and develop telework policies and procedures, determine employee position eligibility and performance measurement.