If my Virginia tax credit application arrives late and has no postmark, can I rely on my own statement that I mailed it on time?

Plain-English summary

Virginia's Research and Development Expenses Tax Credit application (Form RDC) must reach the Department no later than September 1 of the year following the taxable year the research expenses were paid or incurred. A corporation's 2021 application arrived on September 8, 2022 -- a week after the deadline -- and the envelope bore no postmark. The Department denied the application as untimely. On appeal, the taxpayer said it had actually mailed the application through the U.S. Postal Service on September 1, the deadline itself.

The Department explained that Form RDC's own instructions specifically address this exact scenario: when an application arrives with no postmark, the Department uses the date it actually received the application to decide whether the deadline was met -- a taxpayer's own statement about when it mailed something isn't treated as equivalent to a postmark, and doesn't substitute for one. This tracked a prior ruling holding the same thing for tax returns generally. Since the application here had no postmark and wasn't received until September 8, it was considered filed on that (late) date, one week past the deadline. Consistent with the same hard-deadline policy the Department applies to every capped tax credit it administers -- since the R&D credit, like the Farm Wineries credit, has an annual dollar cap -- the late application was properly denied.

What this means for you

Anyone mailing a Virginia tax credit application near a filing deadline

Use a mailing method that generates an actual, verifiable postmark or delivery record -- certified mail, a dated postal receipt, or a private delivery service with tracking. Simply mailing something and later telling the Department you did so on time will not help if the envelope itself doesn't show a postmark; without one, the Department will use the date it physically received your application.

Businesses claiming the Research and Development Expenses Tax Credit

Don't wait until the September 1 deadline itself to mail your Form RDC. Even mailing exactly on the deadline date carries real risk if the postmark doesn't clearly show that date or is missing altogether -- submit early enough to build in a buffer.

Accountants and tax professionals handling capped-credit filings for clients

Confirm the specific proof-of-timely-filing rules for each credit program you handle; some, like this one, explicitly disregard a taxpayer's unsupported claim about when something was mailed in favor of an objective postmark or receipt date.

Common questions

Q: If my Virginia tax credit application has no postmark, what date does the Department use to decide if it was on time?
A: The date the Department actually received the application, not the date you say you mailed it -- per the Form RDC instructions and consistent Department precedent.

Q: Does telling the Department I mailed something by the deadline count as proof, if there's no postmark?
A: No -- a taxpayer's own statement about when an item was mailed is not a substitute for an actual postmark or other objective proof of mailing date.

Q: Why are these credit application deadlines enforced so strictly?
A: Because credits like this one are subject to an annual statewide dollar cap, the Department applies a firm, no-exceptions deadline to every capped credit it administers, to avoid approving more credit than the cap allows.

Citations and references

• Va. Code § 58.1-439.12:08 (Research and Development Expenses Tax Credit; September 1 filing deadline)
• Research and Development Expenses Tax Credit Guidelines, reissued as P.D. 20-120 (7/7/2020)
• P.D. 16-146 (7/6/2016) (a taxpayer's statement about mailing date is not a substitute for a postmark)
• P.D. 04-201 (11/4/2004), P.D. 13-189 (10/18/2013), P.D. 15-201 (10/19/2015), and P.D. 20-26 (2/27/2020) (Department's consistent hard-deadline policy for all capped tax credits)

Subject

Credit: Research and Development - Deadline, Filing Date Based on Receipt When Application Bears No Postmark

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 23-10

Original ruling text

January 18, 2023

Re: § 58.1-1821 Application: Corporate Income Tax

Dear *:

This will reply to your letter submitted on behalf of * (the “Taxpayer”), in which you appeal the denial of its application for the Research and Development Expenses Tax Credit (the “Credit”) for the 2021 taxable year.

FACTS

The Department received the Taxpayer’s Form RDC, Application for Research and Development Expenses Tax Credit (the “Application”), for the 2021 taxable year on September 8, 2022. The Application did not bear a postmark. The Department denied the Application on the basis that the Taxpayer had not submitted the Application by the September 1, 2022, deadline. The Taxpayer appealed, contending that it mailed the Application on September 1, 2022, using the United States Postal Service.

DETERMINATION

Pursuant to Virginia Code § 58.1-439.12:08, an individual, corporation, or pass-through entity may apply for the Credit. Virginia Code § 58.1-439.12:08 E provides that applications for the Credit “ must be received by the Department no later than September 1 of the calendar year following the close of the taxable year in which the expenses were paid or incurred.” [Emphasis added] See also Research and Development Expenses Tax Credit Guidelines, as updated and re-issued as Public Document (P.D.) 20-120 (7/7/2020).

This requirement is also clearly set forth in the Form RDC instructions, in the income tax instructions, and on the Department’s website. The Form RDC instructions specifically state that “[f]or 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.”

Because the Credit is subject to an annual cap, the Department must have a deadline for tax credit applications. Adopting a policy of approving late applications for the Credit could result in the amount of tax credit exceeding the tax credit cap for a particular year. The Department’s policy of establishing a hard deadline for capped tax credits has been applied to all capped tax credits that are administered by the Department. See P.D. 04-201 (11/4/2004), P.D. 13-189 (10/18/2013), P.D. 15-201 (10/19/2015), and P.D. 20-26 (2/27/2020). Accordingly, the Department cannot accept an application for the Credit after the deadline.

In this case, the Department received the Application on September 8, 2022, and the Application did not bear a postmark. A taxpayer’s statement that a return was mailed from a United States post office on a given date is not a substitute for a postmark. See P.D. 16-146 (7/6/2016). Therefore, the Application was considered filed on the date it was received, which was after the September 1, 2022, deadline. Accordingly, I find that the Application was properly denied.

The Code of Virginia sections and public documents cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department’s web site. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/4371.X

Related Documents

04-201

13-189

15-201

16-146

20-26

20-120