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General Business Credits - FAQ
How do I obtain more information on business credits?
For detailed listing of available incentives and credits, please see the tax booklets.
Who gets the benefit of tax credits earned by s-corporations or partnerships?
Usually the benefits are passed through to the shareholders or partners.
How does a company claim withholding tax credits?
Withholding tax credits require multiple steps to claim. First, Form IT-WH must be filed at least 30 days prior to the earlier of the date the tax return will be filed on which the tax credits will be claimed or the due date of the return.
For tax years beginning on or after January 1, 2017, the entity must file Revenue Form IT-WH Notice of Intent through the Georgia Tax Center within 30 days after the due date of the Georgia income tax return (including extensions) or within 30 days after the filing of a timely filed Georgia income tax return, whichever occurs first. Paper filings will no longer be allowed. Failure to file this form as provided will result in disallowance of the withholding tax benefit. However, in the case of a credit which is earned in more than one taxable year, the election to claim the withholding credit will be available for the credit earned in subsequent years.
Then, the taxpayer claims the credits by filing their income tax return. Once the tax return is received, DOR will review the return and make a determination as to the amount of withholding credit that is available. Once a determination is made, a letter will be sent to the taxpayer notifying them of the amount of withholding credit allowed and when and how the credit may be claimed against future withholding payments. NOTE: The withholding credit does not refund any taxes previously paid.
Is there a limitation on the amount of job tax credit that may be claimed against withholding?
Yes, the law limits the amount of credit which may be claimed against withholding by not allowing the Port Traffic Credit or Joint Development Authority credit amounts. If the company is claiming Port Traffic or Joint Development Authority amounts in addition to the Job Tax withholding credit, these amounts may only be applied against income tax liability. NOTE: In the case of a flow-through entity which makes an irrevocable election to claim the withholding credit, the amounts which may not be applied to withholding will be allowed to flow-through since they may not be applied against withholding.
Can credits be used in aggregate to offset 100% of the tax in certain circumstances?
Yes. A taxpayer may apply the 50% limitation of one credit and the 50% limitation of another credit to offset up to 100% of the income tax liability. Please note, however, that some credits have certain requirements when used in this manner and may not allow for 100% offset of liability (i.e. research).
How are investment tax credits claimed?
The investment tax credit requires an application process, which must be approved before the credit can be claimed on the tax return. The regulation requires that the application be filed within 30 days of the completion of the project. For most taxpayers this will be within 30 days of the close of the tax year in which the project was completed. Applicants should allow a minimum of 60 days for the application to be processed. NOTE: Applications filed after the 30-day period must petition the Commissioner for approval to file the application late.
What information should be provided with an investment tax credit application?
The application, which should be signed and dated by an officer of the corporation; a descriptive narrative of the project; a spreadsheet detailing the assets to be claimed with a description of the asset, an explanation of how the asset fits into the manufacturing process, the date placed into service and the purchase price of the asset; and, if the application is being filed by a consultant on behalf of a taxpayer, a properly executed Power of Attorney allowing any questions or correspondence to go through the consultant (without a POA, any questions or correspondence will go through the taxpayer at the address / phone number provided on the application).
What assets qualify for the investment tax credit?
Only real and personal property qualifies for the investment tax credit.
How is the Port Traffic Credit claimed?
The port traffic credit is claimed on the form for the tax credit which it is being claimed in conjunction with or in lieu of (i.e. job tax credit, investment tax credit, or optional investment tax credit). All requirements of the original credit must be met before claiming the port traffic credit. A statement must also be attached to the Georgia return claiming the port increase which reflects the base year traffic and the prior year traffic to substantiate the credit, otherwise the credit will not be allowed. For job tax credit, the port traffic increase must be established in the year of eligibility, with sustained increase shown for subsequent years.
How can I find out about new legislation regarding future business tax credits?
Please see the New Legislation link on the main Rules and Policies Page.
What are the current criteria for qualifying with the Department of Revenue for the Georgia Low Income Housing Credit?
In order to qualify for the Georgia low income housing credit, the qualified Georgia project must be eligible for the federal housing credit, as defined in Section 42 of the IRC of 1986.
What should be included with the tax return when claiming the Georgia Low Income Housing Credit?
For consistency with IRS Regulations, a partnership K-1(if claiming the credit as a flow through from a partnership), the associated Federal Form 8609 tax credit certificate and a schedule that includes each property for which a credit is claimed with a building-by-building allocation should be submitted with the tax return. See Form IT-HC.