Important Guidance on Georgia’s Job Tax Credit

The Georgia Department of Revenue (DOR) has issued new guidance regarding the state’s Job Tax Credit, a valuable incentive for businesses that create new jobs. This guidance is particularly relevant for companies with questions about meeting minimum wage requirements and how to treat jobs transferred between locations. The recent changes’ central focus is the minimum wage requirements and the treatment of transferred jobs. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key points below.

What’s the Georgia Job Tax Credit? 

The Georgia Job Tax Credit provides financial incentives to businesses that create new, full-time jobs in certain industries, such as manufacturing, distribution, and data processing. Depending on where the jobs are located, businesses can earn between $1,250 and $4,000 per job per year for up to five years. 

The recent guidance from the Georgia DOR focuses on two critical aspects of credit: minimum wage requirements and the treatment of transferred jobs. The clarification helps ensure businesses meet the conditions for claiming the credit while accurately addressing how wage levels and job relocations impact eligibility.

Issue #1: Minimum Wage Requirement 

The first issue relates to whether jobs that did not initially meet the minimum wage requirement can later qualify for the Credit if wages are increased, even if the responsibilities remain unchanged. To understand this, it’s necessary first to define what qualifies as a new full-time employee job under Georgia law.

The position requires at least 35 hours per week. It pays at or above the average wage in the county with the lowest average wage (according to the Georgia Employment and Wages Averages Report). To make a claim, these criteria must be met when the job is created.

Additionally, if part-time positions are converted to full-time, businesses may be able to claim the credit, depending on timing and circumstances. Businesses may not combine multiple part-time jobs to count as one full-time position to make a claim.. 

The guidance also clarifies that jobs cannot retroactively qualify for the Job Tax Credit based solely on salary increases. Raising the salary later will not make it eligible for the credit if a job did not meet the wage requirements when it was initially created. All conditions, including salary, must be met when the job is created.

In short, businesses cannot claim the credit for jobs that only become eligible after increased wages. The job must meet all requirements at the time it is created.

Issue #2: Transferred Jobs

Another question businesses often face is whether jobs created in one location while similar jobs are eliminated in another can be considered new or transferred jobs. This is particularly relevant for businesses with operations in multiple locations. The recent guidance addressed this by clarifying that jobs are considered new full-time employee positions, not transferred jobs, when a company makes separate, unrelated decisions about creation and elimination.

Guidance on Special Circumstances

The Department of Revenue also guided special situations requiring additional clarification before submitting a claim. These include:

• Use of Purchased or Leased Assets: If a business purchases or leases existing assets for a new or substantially different purpose, the jobs created through that use may qualify for the credit, even if the assets are not new. For instance, if a company leases an existing warehouse and converts it into a distribution center, the jobs created to staff the new center could still qualify, even though the building is not new.
• Seasonal Business: For seasonal businesses, if purchased or leased assets have been out of service for at least a year, the jobs created using those assets can qualify for the credit. However, if the assets have been out of service for less than a year, approval from the commissioner of community affairs may be needed.

In these cases, “assets” refer to physical or operational resources such as machinery, equipment, buildings, or vehicles. If a business repurposes old assets for a new line of business or expansion, the jobs created may still qualify. However, businesses must verify their eligibility carefully.

Contact Us

Navigating Georgia’s Job Tax Credit rules can be challenging, especially when dealing with salary adjustments, transferred jobs, and special circumstances. To ensure your business maximizes its tax benefits and complies with state requirements, working with a qualified tax advisor is essential to determine how you will be impacted. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information, call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.