In continuation to our last post, we are going to talk about Investment Tax Credit and Retraining Tax Credit. Based upon the same tier system that the Job Tax Credit follows, a taxpayer can obtain a credit against income tax liability. The taxpayer had to have operated an existing manufacturing or telecommunications facility or operated an existing manufacturing or telecommunications support facility for the previous 3 years in the state of Georgia. Here’s where the value of the credits come in: Companies expanding in Tier 1 counties must invest $50k to receive a 5% tax credit, they can then increase that to 8% if they invest in recycling equipment, pollution control, or in converting a defense plant manufacturing facility to a new product. Similar principle for companies expanding in Tier 2, $50k investment for 3% tax credit or 5% if investments go to recycling equipment, pollution control, or defense conversion activities. For both Tier 3 and Tier 4, it’s a $50k investment for 1% tax credit or 3% if their investment goes into recycling equipment, pollution control or defense conversion activities.
Now the Retraining Tax Credit is pretty straight forward. It allows employers to claim certain costs of retraining employees to use new equipment, new tech, and new operating systems. The value of the credit can be 50% of the direct cost of retraining full-time employees with up to $500 per employee, per training program. The annual maximum of the credit amounts to $1,250/employee. Keep in mind though, that the credit cannot exceed 50% of the taxpayer’s total state income tax liability for that tax year. Any claimed credits that go unused can be carried forward for 10 years.