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TAX CREDIT

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Seed-Capital Fund Credit. This provides tax credits for certain qualified investments made on or after July 1, 2008.

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For more information, refer to O.C.G.A. §§ 48-7-40.27 and 48-7-40.28.

This provides a tax credit for the construction, purchase, or lease of clean energy property that is

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Clean Energy Property Credit.

placed into service in Georgia between July 1, 2008 and December 31, 2014. The aggregate amount of tax credits allowed for

both the clean energy property tax credit and the wood residuals tax credit is $2.5 million for calendar years 2008, 2009, 2010,

2011, and $5 million for calendar years 2012, 2013, and 2014. A person receiving a grant from GEFA under O.C.G.A. § 50-23-21

shall not be eligible to claim this tax credit with respect to the same clean energy property. If a taxpayer is denied the Clean

Energy Property Tax Credit because the credit cap has been reached, that taxpayer shall be added to a waiting list and receive

priority for the following years credit allocation. Credits claimed in calendar years 2012-2014 must be taken in four equal

installments over four years. Taxpayer must request preapproval to claim these credits on Forms IT-CEP-AP. For more

information, refer to O.C.G.A. § 48-7-29.14.

Wood Residuals Credit. This provides a tax credit for transporting or diverting wood residuals to a renewable biomass qualified facility

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on or after July 1, 2008. The aggregate amount of tax credits allowed for both the clean energy property tax credit and the wood

residuals tax credit is $2.5 million for calendar years 2008, 2009, 2010, 2011; and $5 million for calendar years 2012, 2013, and 2014.

Taxpayers must request preapproval to claim this credit on Form IT-WR-AP. For more information, refer to O.C.G.A. § 48-7-29.14.

Qualified Health Insurance Expense Credit. Effective for taxable years beginning on or after January 1, 2009, an employer (but only

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an employer who employs 50 or fewer persons either directly or whose compensation is reported on Form 1099) is allowed a tax

credit for qualified health insurance expenses in the amount of $250.00 for each employee enrolled for twelve consecutive months in

a qualified health insurance plan. Qualified health insurance means a high deductible health plan as defined by Section 223 of the

Internal Revenue Code. The qualified health insurance must be made available to all employees and compensated individuals of the

employer pursuant to the applicable provisions of Section 125 of the Internal Revenue Code. The total amount of the tax credit for a

taxable year cannot exceed the employer’s income tax liability. The qualified health insurance premium expense must equal at least

$250 annually.

Quality Jobs Credit. For tax years beginning on or after January 1, 2009, a taxpayer creating at least 50 “new quality jobs” may be

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entitled to a credit provided certain conditions are met. A “new quality job” means a job that: 1) Is located in this state; 2) Has a regular

work week of 30 hours or more; 3) Is not a job that is or was already located in Georgia regardless of which taxpayer the individual

performed services for; 4) which pays at or above 110 percent of the average wage of the county in which it is located; and 5) For a

taxpayer that initially claimed the credit in a taxable year beginning before January 1, 2012, the job has no predetermined end date.

The credit amount varies depending upon the pay of the new quality jobs. The credit must be claimed within 1 year instead of the

normal 3 year statute of limitation period. The taxpayer may claim the credit in years one through five for new quality jobs created in

year one and may continue to claim newly created new quality jobs through year seven and claim the credit on each of those new

quality jobs for five years. The credit may be used to offset 100 percent of the taxpayers Georgia income tax liability in the taxable

year. Where the amount of such credit exceeds the taxpayer’s tax liability in a taxable year, the excess may be taken as a credit against

such taxpayer’s quarterly or monthly w i t h h ol d i n g tax. To claim the credit against withholding,

a taxpayer must file Form IT-WH at least 30 days prior to filing the return on which the applicable jobs are claimed or 30

days prior to the due date of the return if e ar l i er . Once the income tax return is filed, the Department has 120 days to review the

withholding credit being claimed and notify the business of the approved credit and when and how it may be claimed. For more

information, refer to O.C.G.A. § 48-7-40.17.

Alternate Port Activity Tax Credit. O.C.G.A. § 48-7-40.15A provides an alternate port tax credit. The definitions of “base year port

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traffic” and “port traffic” include imports and exports of product. It allows the credit to any business enterprise located in a tier two or

three county established pursuant to O.C.G.A. § 48-7-40 and in a less developed area established pursuant to O.C.G.A. § 48-7-40.1 and

which qualifies and receives the tax credit under O.C.G.A. § 48-7-40.1 and which:

1. Consists of a distribution facility of greater than 650,000 square feet in operation in this state prior to December 31,

2008;

2. Distributes product to retail stores owned by the same legal entity or its subsidiaries as such distribution facility; and

3. Has a minimum of 8 retail stores in this state in the first year of operations.

The business enterprise shall not be authorized to claim both this credit and the port credit provided in O.C.G.A. § 48-7-

40.15, unless such business enterprise has increased its port traffic of products during the previous twelve month period by more

than 20 percent above its base year port traffic, and also has increased employment by 400 or more no sooner than January 1, 1998.

The tax credit, in addition to the tax credit under O.C.G.A. § 48-7-40, shall be limited to an amount not greater than 50 percent of the

taxpayer’s state income tax liability which is attributable to income derived from operations in this state for that taxable year. No credit

may be claimed and allowed under this code section for any jobs created on or after January 1, 2015.

This provides a 35% credit for amounts invested in a registered qualified business. The aggregate

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Qualified Investor Tax Credit.

amount of credit allowed an individual person for one or more qualified investments in a single taxable year, whether made directly or

by a pass-through entity and allocated to such individual, shall not exceed $50,000.00. The credit is available for investments made in

2011, 2012, 2013, 2014, and 2015. The credit is claimed 2 years later, in 2013, 2014, 2015, 2016, and 2017 respectively.

The

aggregate amount of tax credits allowed is $10 million for investments made in calendar years 2011, 2012, and 2013; and $5 million

for investments made in calendar years 2014 and 2015. The taxpayer must get approval as provided in O.C.G.A. § 48-7-40.30

before claiming the credit. This became effective January 1, 2011. See Code Section 48-7-40.30 and Regulation 560-7-8-.52 for

more information.

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Form It 611s Instructions - S Corporation Income Tax - Georgia Department Of Revenue - 2014 Page 16

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