Did you know that Georgia offers businesses a tax break for investing in your employees? If you are a business owner, under the Georgia Retraining Tax Credit program, your business can receive a tax credit of 50 percent of your direct training expenses, with up to $500 credit per full-time employee, per training program, with an annual maximum of $1,250 per employee.
How can you tell if you might be eligible for the Retraining Tax Credit?
• Have you purchased any business software in the last three years?
o Most essential software tools qualify for a retraining credit, such as:
– Remote work software – a common expense during COVID
– Practice management and health records software
– Back office software such as payroll, finance, accounting and employee management software
– Project management
– Sales and Marketing software
• Converted any manual processes to Digital?
– Such as your customer relationship management system (CRM)
– Appointment scheduling, reminders, etc.
– Digital document storage, management and collaboration
• Upgraded any existing technology?
– Newer versions of existing software could qualify
• Added new or additional features for existing software or technology?
– Examples – your CRM added new features, your banking software was upgraded
• Increased the number of users of an existing software program or technology?
– Example – you added additional seats to your CRM software
• Switched technology vendors for your existing technology solutions?
– Switching providers for an existing solution could qualify
If you answered “Yes!” to one or more of these questions, your eligible expenses could include:
• costs of instructors and teaching materials
• employee wages during retraining
• reasonable travel expenses
Once you calculate the credit you are eligible for, retraining tax credits can be used to offset up to 50 percent of a company’s Georgia corporate income tax liability. If the earned credit exceeds that limit, then the unused credit can be carried forward for up to 10 years and applied to future years’ tax liability. Any business that files a Georgia income tax return is eligible for the retraining tax credit.
If you are interested in learning more about this often-overlooked tax benefit, reach out to your AFA advisor today. We can connect you with a specialist in this area to help you understand how you might be able to take advantage of the Georgia Retraining Tax Credit to reduce your state tax liability and help offset the cost of your investment in your employees.