Georgia Research and Development Tax Credit

Program Overview

Georgia allows businesses that increase qualified research spending in the state to claim a credit against Georgia income tax, subject to an annual limitation based on a percentage of the taxpayer's liability. Unused credits may also be applied against Georgia payroll withholding tax, subject to applicable requirements. This provision may allow eligible businesses with limited Georgia income tax liability to utilize the credit against state payroll withholding. The base amount is calculated using a Georgia-specific ratio of research spending to gross receipts.

Eligibility

• Businesses conducting qualified research in Georgia may qualify.
• The research activities must satisfy the applicable requirements for the Georgia research credit and generally align with the federal research credit rules.
• The business must meet the applicable requirements for the credit based on increases in qualified research spending.
• Businesses seeking to apply excess credits against payroll withholding tax must submit the required application before applying the credit.

Benefits

• Offsets up to 50% of Georgia net income tax liability, subject to applicable limitations.
• Excess credits may be applied against Georgia payroll withholding tax, subject to applicable requirements.
• The payroll withholding provision may provide an alternative way for eligible businesses to utilize credits that cannot immediately be used against Georgia income tax.