We help companies all over Georgia identify and obtain tax credits. Tax credits maximized. Risk minimized.

HR Can Help With Tax Credits, But Be Careful

Filed under: Job Tax Credit, Other Incentives, Retraining Tax Credit, Withholding Tax Credit
April 30, 2013

Your client’s human resource (HR) department can be a tremendous resourceto help identify and utilize tax credits. Since most state tax credits are about hiring and retraining employees, HR is on the front lines for spotting and being involved with the activities that quality for the tax credits. For example, if headcount is planned to go up (that is, job tax credit), HR will be hiring these new employees. Or if your client’s Enterprise Resource Planning (ERP) system will be upgraded (that is, retraining tax credit), then the HR’s training team will be involved with planning employee training.

By keeping HR on the lookout for tax credit opportunities, your client’s potential for identifying tax credits increases.  BUT BE CAREFUL — since HR is not involved with your client’s income taxes, they may not be aware of the real net after-tax benefits. For example, your client may have minimal income tax liability and can’t utilize the tax credits (NOLs, ESOP, “C” corp. professional services and other reasons). We have seen a client’s HR team spend a lot of time and money applying for, documenting, and obtaining tax credits only to find out later that the company can’t make use of them.

As you come up for air after tax season and talk with your clients and prospective clients, reach out to your client’s HR professionals to discuss tax credits. Together you may be able to create added value that goes a long way in strengthening your client relationships!

JimSig

State Tax Expenditures = $$ for Your Clients!

Filed under: Policy
April 30, 2013

Finding the right credits and incentives for your clients is not easy. Especially if you have clients doing business in more than one state, it can be overwhelming to dig out all of the possible credits and incentives for them.  Tax information services such as CCH or others may only scratch the surface.  Often there are multiple departments, agencies, and organizations within each state that are responsible for credits and incentives.

We found one source that can help.  It’s the Institute on Taxation and Economic Policy (ITEP) page for “Tax Expenditure Reports” (access ithere) that lists reports from each state.

It’s funny how states call tax credits, exemptions, and incentives “expenditures.”  That’s one way to look at it.  But we say those expenditures are just another way you can help make $$ for your clients. 

Combine that with investigating the state economic development sites, and you will have a pretty good idea of which credits and incentives to pursue.  Your clients will appreciate your help in turning state “expenditures” into $$ for them!

 

DaleSig

Snail Mailing Amended Returns?

Filed under: Management
March 28, 2013

We have heard several issues related to snail mailing Georgia amended income tax returns to DOR, especially when tax credits have been added. Make sure you send it to the correct address (AND use a USPS CertifiedMail Receipt form).

Here are the mailing addresses:
Georgia Department of Revenue
Processing Center
 
Form 500X (individual):  
P.O. Box 740318
Atlanta, GA 30374-0318
 
Form 600 (C corporation):  
P.O. Box 740397
Atlanta, GA 30374-0397
 
Form 600S (S corporation):  
P.O. Box 740391
Atlanta, GA 30374-0391
 
Form 700 (partnership):  
P.O. Box 740315
Atlanta, GA 30374-0315
 
(Click here for details)
Good luck with tax season!

JimSig

Legislative Update

Filed under: Opportunity Zone Credit
March 28, 2013

The Georgia Legislature is about to wrap up this year’s session, and there have been few changes that relate to business incentives or tax credits. But an interesting one is for the Opportunity Zones. SB 137makes changes that allow Opportunity Zones to be designated by the commissioners of the departments of Economic Development and Community Affairs – IF they agree! (click here for details)

DaleSig

Do NOT Over-utilize Tax Credits!

Filed under: Investment Tax Credit, Job Tax Credit, Management, Retraining Tax Credit
February 28, 2013

Utilizing state tax credits against income taxes can be complex, especially for pass-throughs such as S corporations and partnerships.

Many state tax credits (such as Georgia’s Retraining Tax Credit, credit type code = 102) can be utilized up to 50% of the income tax liability per year and have a 10 year carry forward.

We have heard about tax software not correctly calculating the 50% utilization limit. For example, the CPA is not aware of the 50% limit, assumes the tax software is correct, and submits an amended return for a Retraining Tax Credit and $ refund for the client. DOR takes a long time to process the amended return and FINALLY replies that the amended return is not correct. You know the rest of the story!

If your clients are applying for tax credits, do not assume the tax software is correct. Double check the old fashioned way with a calculator — your clients’ refund checks will be appreciated sooner rather than later!

JimSig

Amend or Extend for Tax Credits?

Filed under: Management
February 28, 2013

With the March 15 tax filing date approaching, you may be facing a dilemma for a pass-through entity, especially if your client wants to file shareholder individual returns by 4/15.  What if they plan to submit tax credits but may not have the tax credit documents completed on time?  Here are some options to consider:

  • Extend the state corporate income tax return (only need to extend state, not federal), then file individual returns on 4/15
  • File the state corporate income tax return by 3/15 without tax credits, then amend the state corporate return for tax credits applied, distribute amended K-1s, and file individual tax returns on time by 4/15

Tax planning with your client really pays off in keeping your clients happy!

 

DaleSig

Optional Investment Tax Credit

Filed under: Investment Tax Credit
January 31, 2013

The Optional Investment Tax Credit is like the regular Investment Tax Credit, but it is targeted to large projects and has greater potential tax credit $ benefits. However, it may be complex to calculate and administer.  The following are the threshold investment criteria and tax credit percentages:

  • Tier 1: $5 million, 10% tax credit
  • Tier 2: $10 million, 8% tax credit
  • Tier 3 or 4: $20 million, 6% tax credit

The tax credit may be claimed for 10 years, provided the qualifying property remains in service throughout that period. The tax credit $ available to your client is calculated each year based on increases in tax liability and other factors (click here).

JimSig

Legislative Update

Filed under: Policy
January 31, 2013

We’ve been checking our sources and can report no major changes are planned for Georgia’s corporate income tax credits.  We attended the recent 2013 Georgia Chamber ”Eggs and Issues” breakfast, the Georgia Economic Developer’s Association Legislative Luncheon, and we discussed current legislation with representatives of the Georgia Department of Economic Development.

Bottom line:  No plans for significant changes to tax credits.  Some new credits will be proposed for development in historic downtown districts as well as some new wrinkles for angel investors and clean energy initiatives, but that’s it.

That being said — things can change during the legislative session. We will keep you posted.

 

DaleSig

2013 Job Tax Credit Ranking Details Available

Filed under: Job Tax Credit
December 31, 2012

Time-critical 2013 Job Tax Credit ranking details have been released by the Department of Community Affairs (click here). Also, please note:

  • Census Tracts have changed: due to the transition from the 2000 Census boundaries to the 2010 Census boundaries, your clients’ locations may be impacted. This applies to regular JTC, Less Developed Census Tract, Opportunity Zone, and Military Zone tax credits.
  • Notice Of Intents need to be filed: to maintain your clients’ tier, zone, or Less Developed Census Tract designations, the form must be filed by Feb. 15, 2013 (click here)!!!!

If you haven’t done so, please review your clients’ plans for 2013. Job Tax Credits may be available if they plan to increase employment levels, open new or change locations in Georgia, or buy another company.

 

DaleSig

Change Management Means Tax Credits!

Filed under: Retraining Tax Credit
November 30, 2012

With increasing pressure to cut costs, reduce non-value added activities, and improve quality, all companies must continuously change to stay competitive.

How do your clients drive changes through their companies? Change Management involves the planning and implementation of these changes. And change activities require a lot of your clients’ resources, including time, facilities, technologies, and costs. These resources can be very expensive! The good news is that these expensive activities may also qualify for the Retraining Tax Credit.

We recently worked with a medical billing call center. They had a room full of employees with headsets and computers. After we talked with the operations executive and the training manager, we found that they were constantly changing their work flow and in-house customized software. Most changes required employee training as part of their change management initiatives, which resulted in a large Retraining Tax Credit $$ (for example, HIPAA 5010 work flow and software changes).

It was interesting that these changes did not materially increase the client’s costs as indicated on their balance sheets, income statements or tax returns. Their CPA discovered this by asking their new client to give them a tour of their operations and asking a few questions. You will never know until you ask.

JimSig

Older Posts »