diff --git a/.vscode/launch.json b/.vscode/launch.json
index f03b4b177..2708f71c0 100644
--- a/.vscode/launch.json
+++ b/.vscode/launch.json
@@ -3,17 +3,15 @@
     // Hover to view descriptions of existing attributes.
     // For more information, visit: https://go.microsoft.com/fwlink/?linkid=830387
     "version": "0.2.0",
-    "configurations": [        
+    "configurations": [
         {
             "name": "DJL RunServer",
-            "type": "python",
+            "type": "debugpy",
             "request": "launch",
             "program": "${workspaceFolder}/manage.py",
-            "args": [
-                "runserver"
-            ],
+            "args": ["runserver"],
             "django": true,
             "justMyCode": true
         }
     ]
-}
\ No newline at end of file
+}
diff --git a/.vscode/settings.json b/.vscode/settings.json
new file mode 100644
index 000000000..82594303a
--- /dev/null
+++ b/.vscode/settings.json
@@ -0,0 +1,11 @@
+{
+    "python.testing.unittestArgs": [
+        "--settings",
+        "dev_env.settings",
+        "--pattern",
+        "test_*.py"
+    ],
+    "python.testing.pytestEnabled": false,
+    "python.testing.unittestEnabled": true,
+    "python.envFile": "${workspaceFolder}/dev_env/.env"
+}
diff --git a/README.md b/README.md
index eaf53a7c0..538151e07 100644
--- a/README.md
+++ b/README.md
@@ -248,6 +248,14 @@ After setting up your development environment you may run tests.
 python manage.py test django_ledger
 ```
 
+## Running tests inside Visual Studio Core
+If you want to run tests inside Visual Studio Core you will need to create an `.env` file inside `dev_env` with the following content:
+
+```
+MANAGE_PY_PATH=./manage.py
+DJANGO_SETTINGS_MODULE=dev_env.settings
+```
+
 # Screenshots
 
 ![django ledger entity dashboard](https://us-east-1.linodeobjects.com/django-ledger/public/img/django_ledger_entity_dashboard.png)