Retraining Tax Credits

One of the Georgia Business Expansion Support Act (BEST) tax incentives, the Retraining Tax Credit allows eligible employers to claim certain costs of retraining employees to use new equipment, new technology, or new operation systems. The credit can be worth 50% of the direct costs of retraining permanent employees up to $500 per employee per approved retraining program per year. The credit cannot be more than 50% of the taxpayer's total state income tax liability for a tax year. Credit claimed but not used may be carried forward up to 10 years.

"Cost of retraining" means direct instructional costs which include instructor salaries, materials, supplies, textbooks, manuals, video tapes or other institutional media and training equipment purchased or rented for and utilized exclusively for the company's employee retraining purposes. Employee wages are also an allowable retraining cost. Such costs are adjusted to reflect wages paid only for time devoted exclusively to retraining during paid working hours. To be eligible, the employee must not be producing a product or providing a service during the retraining.

"Employee" means any worker who resides in the State of Georgia, who is employed for a minimum of 25 hours per week, and who has been continuously employed by the employer for at least 16 consecutive weeks. For purposes of the retraining tax credit, "employee" means workers involved in direct labor and their immediate supervisors.

Examples of "new technology" include implementation of new equipment, new production processes, and new operating systems such as total quality management and ISO 9000 standards.

Executive training, management development training, career development, and personal enrichment training are not eligible.

An employer may not receive a credit if the employer requires that the employee reimburse or pay the employer for the cost of retraining either directly or indirectly or through use or forfeiture of leave time, vacation time, or other compensable time.

Retraining programs may be either employer-provided or employer-sponsored.

The Technical College System of Georgia as authorized and directed by law sets standards to approve retraining programs. Georgia Piedmont Tech's Vice President of Economic Development, Richard Smith, can provide program approval and additional information about the Retraining Tax Credit.

For more information on the Retraining Tax Credit, as well as various worksheets and forms, visit the Retraining Tax Credit page of the Technical College System of Georgia website.

For Retraining Tax Credit information, contact Georgia Piedmont Tech's Newton Campus Building D & Conference Center at (770) 786-9522 Ext. 5000.