Georgia Corporate Tax Credits
Georgia offers a range of corporate tax credits that enable companies to minimize or completely eliminate state corporate income taxes which, at six percent, are already among the lowest in the nation.
For some of the credits, the amounts are dependent on the “tier status” of the community. Tier status refers to an annual four-tier ranking of the economic vitality of Georgia’s counties. The highest credits are offered in the counties with the greatest need (Tier 1 and 2 counties), while the most prosperous counties (Tier 3 and 4 counties) offer lesser amounts.
Job Tax Credit
Strategic industries such as distribution, technology, manufacturing, telecom, processing companies and their headquarters qualify for Georgia’s Job Tax Credit. Depending on the community’s tier, companies must create between five and 25 net new jobs per year to qualify. For each year (up to five years) the jobs are maintained, qualified companies can claim a tax credit with a value of $750 – $3,500 per job, per year. An additional $500 credit is offered in counties that participate in a multi-county joint development authority. Unused job tax credits may be carried forward ten years. Increased job tax credits, equal to Tier 1 credits, are also allowed for companies that create jobs in less developed pockets of metro areas, regardless of the county’s tier. Georgia has 40 counties that offer job tax credits to retail and business operations other than those listed above.
See the 2012 Georgia Job Tax Credit Tiers by County Map.
| Tier | Job Tax Credit $ | Jobs | Use of Credits | Carry Forward |
| 1 | $3,500 - $4,000* | 5 | 100% of Tax Liability Excess to Withholding Tax up to $3,500 | 10 Years |
| 2 | $2,500 - $3,000* | 10 | 100% of Tax Liability | 10 Years |
| 3 | $1,250 - $1,750* | 15 | 50% of Tax Liability | 10 Years |
| 4 | $750 - $1,250* | 25 | 50% of Tax Liability | 10 Years |
In the table immediately above, the (*) denotes the inclusion of the $500 bonus for counties that are members of a Joint Development Authority (JDA). This addition of the $500 bonus creates the maximum Job Tax Credit amount which can be awarded to a business.
Example: Taxpayer creates 50 jobs in a Tier 1 county offering a $4,000 credit, receives $1 million in tax credits over five years to reduce or eliminate Georgia income tax:
50 Jobs x $4,000 x 5 years = $1,000,000.
Opportunity Zone Job Tax Credits
Local governments which undertake redevelopment and revitalization efforts in certain older commercial and industrial areas can now qualify those areas for the State’s maximum state job tax credit of $3,500 per job. The credits are available for areas designated by the Georgia Department of Community Affairs (GA DCA) as “Opportunity Zones”. The incentive – which is available for new or existing businesses which create two or more jobs – are credits which can be taken against 100% of the business’ income tax liability and state payroll withholding. Job Tax Credits (JTCs) awarded in an Opportunity Zone are applicable to all businesses/industries.
Source: Georgia Department of Community Affairs, 2009.
Port Tax Credit Bonus
Available to taxpayers who increase imports or exports through a Georgia port by 10 percent over the previous year. The port tax credit bonus can be used with either the Job or the Investment Tax Credit program. Unused credits may be carried forward 10 years. The Georgia Ports are indicated on the 2012 Georgia Job Tax Credit Tiers by County Map.
Port Job Tax Credit Bonus for Job Tax Credits
The port tax credit is a $1,250 per job bonus for taxpayers with qualified increases in shipments through a Georgia port. The $1,250 is added to the job tax credit.
Example: Taxpayer that creates 50 jobs in a Tier 1 county is eligible to receive the port bonus, adding $1,250 to $4,000 job tax credit for total credit of $5,250 for each job. Taxpayer is eligible for $1,312,500 in tax credits spread over five years to reduce or eliminate Georgia income tax:
50 jobs x $5,250 x 5 years = $1,312,500.
Port Tax Credit Bonus for Investment Tax Credits
The port bonus increases the investment tax credit to the equivalent of a Tier 1 location regardless of the tier level. The port bonus would therefore be equal to 5 percent of the qualified investment in expenses directly related to manufacturing or providing telecommunications services with the credit increasing to 8 percent for recycling, pollution control and defense conversion. The port bonus is limited to 50 percent of income tax liability.
Example: Taxpayer qualifies for a port bonus in a Tier 4 county, invests $100 million in a manufacturing plant plus $25 million in recycling equipment. Taxpayer is eligible for a $7 million investment tax credit to reduce or eliminate Georgia income tax:
[$100 million x 5%] + [$25 million x 8%] = $7,000,000.
Quality Jobs Tax Credit
Companies that create at least 50 jobs and pay wages at least 110% of the county average are eligible to receive a credit of $2500-$5000 per job, per year, for up to five years, based on the scaled system below. Credits may be used to offset the company’s payroll withholding once all other tax liability has been exhausted and may be carried forward ten years.
| Payroll Requirement (% of County Average) | Credit Value per Person |
| 110% | $2,500 |
| 120% | $3,000 |
| 150% | $4,000 |
| 175% | $4,500 |
| 200% or greater | $5,000 |
Mega Project Tax Credit
Companies that employ at least 1,800 net new employees, and either invest a minimum of $450 million or have a minimum annual payroll of $150 million may claim a $5,250 per job per year tax credit for the first 5 years of each net new job position. Credits are first applied to state corporate income tax with excess credits eligible for use against payroll withholding. Credits may be carried forward for 10 years.
Retraining Tax Credits
A company’s direct investment in training can be claimed as a tax credit – 50 percent of the employer’s direct cost up to $500 per, per approved training program. The total amount of credit cannot exceed $1250 per employee per year. Training programs must be approved by the Technical College System of Georgia. This tax credit can be used to offset up to 50 percent of a company’s state corporate income tax liability. The credit is available to all Georgia businesses that file a …Georgia income tax return. The retraining program must be for quality and productivity enhancements and certain software technologies. Unused credits can be carried forward 10 years. These credits can be combined with other tax credits.
Child Care Tax Credits
Child Care credits range from 75 percent to 100 percent of costs. The credits are available to all businesses in the state. The child care facility must be licensed by the state. All child care credits can be used against 50 percent of taxpayer’s income tax liability in a given year.
Employers who purchase or build qualified child care facilities are eligible to receive Georgia income tax credits equal to 100 percent of the cost of construction. The credit for the cost of construction is spread over 10 years [10 percent each year]. Unused child care credits from the purchase or construction of a child care facility can be carried forward three years.
Employers who provide or sponsor child care for employees are eligible for a credit against Georgia income tax equal to 75 percent of employers’ direct costs. Credits that are related to the operating cost of the facility may be carried forward five years.
Example: Taxpayer has direct child care cost of $400,000 in a given year and is eligible to receive a $300,000 tax credit [75% x $400,000]. Taxpayer invests $1 million for the construction of a childcare facility and is eligible for a credit in the first year of $100,000 [10% x $1 million]. The taxpayer can add the $300,000 tax credit and the $100,000 credit if the total credits do not exceed 50% of the tax liability in a given year.
Work Opportunity Tax Credit Program (WOTC):
The Georgia Department of Labor (GDOL) coordinates the federal Work Opportunity Tax Credit Program (WOTC). The WOTC program is a federal tax credit incentive that the U.S. Congress provides to private-sector businesses for hiring individuals from nine target groups who have consistently faced significant barriers to employment. Among others, target groups include certain TANF (Temporary Assistance for Needy Families) and food stamp recipients, and certain residents of an Empowerment Zone (EZ) or Rural Renewal County (RRC). Participating companies are compensated by being able to reduce their federal income tax liability with a tax credit between $1,200 to $9,000 per qualified employee, depending on the target group. The most frequently certified WOTC is $2,400 for each adult new hire. An employer must request and receive certification from the Georgia Department of Labor that the new hire is a member of at least one of the nine WOTC target groups before the employer can claim the WOTC on its federal income tax return. Although veterans are the only target group currently approved to receive these credits, Congress may extend the credits to the other eight target groups, so employers are encouraged to submit the required paperwork for all new hires in any of the nine target groups to Georgia’s WOTC Coordinator no later than 28 calendar days after the new hire begins work.