Valuable Tax Credits for Restaurants and Franchisors


Many Federal and Georgia tax credits are available to restaurants, franchisors, and caterers, though they are often overlooked and go unused. With proper planning and assessment, these credits can go a long way toward improving a business’s bottom line. Below is a summary of some of the more recognizable credits available. In the coming months we will delve into the details of each type of credit.

Work Opportunity Tax Credit (“WOTC”) The WOTC is a Federal credit provided to employers hiring persons belonging to specific groups, including a higher credit for hiring qualified veterans. In general, the credit can be equal to 40% of first-year wages up to $6,000. The Protecting Americans from Tax Hikes Act of 2015 extended the hiring deadline to January 1, 2020, meaning the employee must be hired and start working before that date to be considered for this credit.

Georgia Retraining Tax Credit The Georgia Retraining Tax Credit is only a Georgia credit. The purpose is to encourage employers to continually invest in their employees by upgrading equipment, acquiring new technology, and completing ISO 9000 training. The annual maximum credit is $1,250 per employee. This credit is available to any business that files a Georgia income tax return.

FICA Tip Credit

The FICA Tip Credit is a federal credit provided to employers who pay FICA tax on employees’ tips over the federal minimum wage. To qualify for this credit, employees must earn the federal minimum wage, which can include their hourly wages, meals furnished to them, and tips received. Employees must provide an accurate report of their tips to the employer and the employer must pay the applicable FICA taxes on those tips.

The three credits described above are not an exhaustive list and there may be more Federal and Georgia credits that apply specifically to your business. HLB Gross Collins, P.C. has been serving some of the Southeast’s most prominent restaurant and catering companies for nearly 50 years. Our Service Practice works closely with the clients to ensure that they are taking advantage of all available credits and savings opportunities.

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