Georgia Retraining Tax Credit Overview

The Georgia Employer’s Credit for Approved Employee Retraining (Credit Type Code 102) is for training employees on new technologies. These technologies can include new software, modifications, upgrades, new modules, and in-house developed applications. In many cases training on new equipment, business process changes such as Lean initiatives, ISO-9000 and quality management programs may qualify.
Key Points to Remember:
  • The tax credit is for up to $1,250 per qualified employee. For example, $62,500 tax credit for 50 qualified employees trained on a new business wide ERP software ($1,250 X 50 = $62,500 tax credit)
  • 3 years of potential – last year, this year and plans for next year.
  • $$ benefits go to any company or pass-through equity owners that pays Georgia income taxes.
  • Administered by The Technical College System of Georgia (TCSG), and must be approved by the local technical college Vice President of Economic Development (Program details click here).
Don’t forget to discuss these activities with your client’s accounting, IT, HR, operations and engineering contacts. We’ve found that most Georgia companies will qualify for this credit, so make sure you ask!

Get Two Years of Tax Credits Instead of One!

Your Georgia clients may be able to get two years of Retraining Tax Credits if they start now. Since this tax credit is capped at $1,250 per employee per tax year, they may start their software roll out now, begin the initial training in 2014 (first tax year), then complete the training in 2015 (second tax year).

Here are some ideas that may help:

  1. Potential training in 2014 (initial training):
    • Overview & introduction to all employees, with coffee & donuts
    • Major business processes affected by the new system(s) – customer records, project management, financial control
    • Departmental platforms/changes
  2. Potential training in 2015 (more specific to your client’s business processes):
    • For employee’s job or task areas, such as accounting, order entry, and customer service
    • Job-specific training; for example, accounts receivable, accounts payable, and journal entry.
    • Software add-ons and specialized modules affecting individual teams.

Your client and their software vendor may be planning the implementation right now, so your input sooner rather than later will go a long way towards helping them double their benefits from tax credits. Instead of getting $1,250 per employee, why not have better-trained employees and get $2,500 per employee in tax credits??



Catch Up Means Tax Credits

We are seeing many companies cautiously coming out of the recession. For example, architects, engineers and construction firms are finally getting new business. As things pick up, they are finding that their software (such as business-wide systems and project management, document management and CAD software) is out of date or no longer supported. In addition, their customers’ and suppliers’ requirements for electronic interfaces (for example, paperless contracts) and e-commerce are driving changes.Your customers are now having to play the “catch up” game to either get current on their installed versions or even buy new versions. These catch up activities may qualify for Retraining Tax Credits in Georgia since many of the company’s employees have to be retrained on the systems. Other states may offer incentives for these activities as well.

So get out there and identify those client activities that happened in 2013 or planned for 2014 that qualify for tax credits.  Your clients will appreciate your proactive followup!


Technical Colleges Can Help Your Clients

We recently visited with Pam Griffin, Director of Organizational Development at Georgia Quick Start (click here). She leads the Retraining Tax Credit program for the entire State of Georgia, working with the Vice Presidents of Economic Development (VP ED) at each technical college.

Pam told us that there are no Retraining Tax Credit program changes planned for 2013. However, the technical colleges are continuing to consolidate, with new VP EDs at some locations.  Also, there is a big drive by the technical colleges to reach out to businesses and provide more training services, focused on local needs.

Best kept secret – the colleges can provide in-house and customized training for your clients. Examples: OSHA training, LEAN Manufacturing, Welding, and Certified Customer Service Specialist program. Many of these training programs also qualify for the Retraining Tax Credits.

So encourage your clients to take advantage of the training services available at their local technical colleges.  They’ll obtain better skills, and maybe tax credits as well.



Moving to the Cloud

We are hearing about many companies moving their business systems to the cloud.  But this change may be more than just moving from a server located at their company to a server “in the cloud.”

Even though your client may be staying with the same software vendor, they may be required to upgrade to a newer version of software.  This upgrade may require employee training, which may qualify for Retraining Tax Credits.

During your reviews with existing clients and visits with prospective clients, ask about their IT plans — you may just find that behind your client’s cloud, there may be a tax credit! (sorry but I had to say it).



Help with Adding New Jobs

As the economy improves (hopefully!) and your clients start adding new jobs, they may want to utilize some beneficial “no-cost” offerings from the State of Georgia:

Work Ready. We met with Ann Sechrist, Director of Economic Development at Gwinnett Technical College. She described a no-cost service provided by the Technical College System of Georgia called Work Ready.   Companies can utilize this service to help find higher quality employees as well as get assistance with EEOC compliance. Job applicants with Work Ready certificates are pre-tested for math, reading and other core skills that companies require. Several other related services might also help your clients get Work Ready employees (click here).

Georgia Works. The Georgia Department of Labor has a program that provides companies with prospective employees at no cost for up to 6 weeks. The company and the prospective employee are be able to evaluate the best fit during this time period. For additional information about this and other related services, click here.

Retraining Tax Credit Update

We talked with Pam Griffin, who administers the Retraining Tax Credit program for the state. Here are some key items she told us that are new for 2009:

$1,250 Cap. There still is a $500 per program per employee per year restriction, but starting in 2009 the most that can be claimed for one employee is $1,250 per year.

Approved Retraining. Narrows the definition of approved retraining to exclude any retraining on commercially, mass produced software packages for word processing, data base management, presentations, spreadsheets, e-mail, personal information management, or computer operating systems, unless it is completed by those providing support or training on such software.

One-Year Look-Back. Requires that the credit be claimed within 1 year, starting with the 2009 tax year, instead of the previous 3-year look-back period.

Technical colleges re-organized. Many of the technical colleges have been consolidated as part of the state’s cost cutting program, and many of the folks who approve the Retraining Credits have or will be changed.  The final changes will be made in July 2010.  We’ll keep you posted.