Job Tax Credit
A job credit is a tax credit that helps fuel company expansion by rewarding job creation. In Georgia, job credits provide as much as $4,000 in annual tax savings per job for up to five years. They’re available to businesses (or their headquarters) in seven strategic sectors:
- Warehousing & distribution
- Research & development
The exact value of the job credits depends on two factors – how many jobs are created, and where. A downloadable map shows how all Georgia counties and census tracts rank as “economic tiers” based on three factors: unemployment rate, per capita income and percentage of residents whose incomes are below poverty level.
Download the map ▶
Companies can calculate their job credits by referring to: 1) the tiers in the map; and 2) the following table:
HOW THE JOB TAX CREDIT WORKS
Suppose a manufacturer creates 50 jobs in a tier 1 county that participates in a Joint Development Authority with other counties. The table shows the value of this job credit would be $4,000 per job. So the company would receive $1 million in tax credits over a five-year period – bringing a $1 million reduction in Georgia income tax. This is calculated as such:
50 jobs x $4,000 credit per job = $200,000 x 5 years = $1 million
As the table above shows, job credits in tier 1 or tier 2 counties can be used against 100 percent of income tax liability. (In tier 1 counties only, the excess over 100 percent is credited to Georgia withholding tax, with a limitation of $3,500 per job.) Tier 3 and tier 4 counties are limited to 50 percent of tax liability in a given year.
The job credits may be carried forward for up to 10 years.
PLUS: Companies creating jobs in certain areas outside tier 1 counties can still receive job credits equal to tier 1 credits. These areas are:
- Designated Less Developed Census Tracts (LDCTs)
- Opportunity Zones
- Military Zones
And job credits can apply to any business outside the strategic sectors, provided the jobs are created in Opportunity Zones, Military Zones or Georgia’s 40 least developed counties.
Companies should compare the benefits of the job tax credit with those of the investment tax credit, as taxpayers are allowed to claim one or the other, but not both.