Each year, based on certain location and economic factors, the Department of Community Affairs (DCA) ranks all 159 Georgia counties into four tiers and provides designations for Less Developed Census Tract (LDCT) and Military Zones (MZ). The county tier-ranking and the designation of LDCT or MZ determines requirements and benefits of the Georgia Job Tax Credit (JTC) for an area. Such annual changes in an area’s ranking and designation could result in a significant impact on the amount of the JTC available and the ability for businesses to claim the benefit for job increases in a particular area.
The new county rankings for the 2020 tax year issued on January 16, 2020, resulted in 13 county tier-ranking changes, 96 LDCT removals, and 11 MZ designation removals. For taxpayers taking no action, these changes may reduce the amount of JTC available, eliminate a business’ eligibility for the credit, or eliminate the ability to claim the credit against Georgia payroll withholding. To preserve the 2019 ranking and designation for tax years 2020, 2021, and 2022, certain businesses can file a Georgia Notice of Intent (NOI) by March 31, 2020.
In addition, new Quality Job Tax Credit (QJTC) regulations lower the eligibility threshold for Tier 1 and Tier 2 counties created in a single rural county. New Manufacturing Investment Tax Credit regulations modify requirements for taxpayers in Tier 1, Tier 2, and rural counties and allow taxpayers to convert investment credits to payments against withholding in some circumstances.
The Georgia JTC offers state tax benefits to businesses, especially in special zones such as Tier 1 counties, the 40 counties in need of the most economic help, Georgia Opportunity Zones (not to be confused with the popular federal Opportunity Zones with the same name in Georgia), Military Zones, and Less Developed Census Tracts where the credits may be used to offset Georgia payroll withholding.
Businesses enjoy that Georgia offers these upfront incentives as they evaluate site selection needs. Timely filing of the NOI by March 31, 2020, may allow a business located in these areas to preserve benefits related to headcount increases for 2020, 2021, and 2022.