The Georgia Department of Revenue recently promulgated new regulations expanding the state’s job tax credit program to telecommuting employees. The Georgia Jobs Tax Credit generally provides a statewide tax credit for any business that is engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, research and development industries or services for the elderly and persons with disabilities. The tax credits are available to any headquarters of qualifying businesses. In certain circumstances, the credit is available to all businesses operating in designated counties. Designated counties are determined by unemployment rates, per capita income, and poverty levels. These designated counties also allow businesses to elect to utilize the credits against state payroll withholding taxes. Depending on the location of the employer, the credits range from $750 to $4,000. Manufacturers of personal protection equipment may be eligible for additional job tax credits.

In the new regulations, the department extended the jobs tax credit to telecommuting workers. Qualifying businesses can receive the credit for telecommuting employees who were or are hired in 2020 or 2021. The telecommuter must work at least 35 hours a week and be paid at or over the lowest country average wage. The business must also offer health insurance to the employee. Under the regulations, the telecommuting employee must live and work in Georgia.

Takeaways

As the global pandemic continues, more companies are allowing or requiring employees to telecommute. As businesses hire new employees those employees are likely to telecommute. Georgia is the first state to specifically extend its job credit program to telecommuters. Businesses in Georgia that have hired employees who telecommute in 2020 or will hire such employees in 2021 should be aware of these new regulations. It is possible that Georgia extends the time period for these credits past 2021 depending on the economic conditions. Businesses should be aware that other states may provide jobs tax credits to businesses hiring remote workers.

Middle market relief for businesses impacted by the coronavirus has been accelerating with states establishing targeted relief programs or proposing on new incentives. Businesses in every industry should consider State tax planning in response to economic distress. Taxpayers with questions about the Georgia jobs tax credit or other available state credits and incentives opportunities should consult a state and local tax specialist for more information.