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, telecommunications, processing companies and their headquarters qualify for Georgia’s Job Tax Credit. Depending on the community’s tier, companies must create between two 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 Job Tax Credit Tier by County
 

SPECIAL ZONE JOB TAX CREDITS

Local governments which undertake redevelopment and revitalization efforts in certain older commercial and industrial areas can qualify those areas for the State’s maximum state job tax credit of $3,500 per job. The credits are available in Opportunity Zones (OZ), Less Developed Census Tracts (LDCT), and Military Zones (MZ). 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 corporate income tax liability with excess to payroll withholding. OZs and MZs, as well as the 40 least-developed counties, offer job tax credits to businesses of any nature, including retail, that create at least two net new jobs.

Job Tax Credits are subject to program requirements and rules published by the Georgia Department of Community Affairs.

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. Credits may be used to offset up to 50 percent of the company’s corporate income tax liability. Unused credits may be carried forward 10 years when continuing to meet the levels of port traffic established in year one.

Port Tax Credit Bonus for Job Tax Credits – The port tax credit “bonus” 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: You create 25 jobs in a Tier 1 county and increase port traffic by at least 10 percent then you are eligible to receive the port bonus. You are eligible for $656,250 in tax credits spread over five years to reduce or eliminate Georgia income tax. [25 jobs x ($4,000 job tax credit + $1,250 port tax credit bonus) x 5 years] = $656,250.

Port Tax Credit Bonus for Investment Tax Credits – The port tax credit “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: Your company qualifies for a port bonus in a Tier 4 county, invests $100 million in a manufacturing plant plus $25 million in recycling equipment. You are 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 and maintain at least 50 net new jobs and pay wages at least 110% of the county average during a 12-month period are eligible to receive a Quality Jobs Tax Credit (QJTC) of $2,500-$5,000 per job, per year, for up to five years, based on the scaled system below. QJTC may be used against 100 percent of the state corporate income tax liability, and once that liability has been exhausted, the credits may offset the company’s payroll withholding and may be carried forward 10 years.

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, and pay an average wage above specified minimums or show high growth potential 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 100 percent of 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 full-time employee, 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 which is earned over a 10 year period.Unused credits 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 may be carried forward five years.

WORK OPPORTUNITY TAX CREDIT PROGRAM

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. federal government 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: Unemployed veterans, Food Stamp recipients, certain Temporary Assistance for Needy Families (TANF) recipients, certain residents of an Empowerment Zone (EZ), or Rural Renewal County (RRC) residents.
 
Participating companies are compensated by being able to reduce their federal income tax liability with a tax credit between $1,200 to $9,600 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.