As snow and ice blankets the Southeast, many people are confined to their homes unable to get to work. But for the millions of Americans who are set up for telecommuting, it’s business as usual. In addition to the convenience of telecommuting for employees, Georgia employers may be eligible for tax credit if certain criteria are met.
For taxable years 2008 and prior to January 1, 2012, a nonrefundable credit will be available against the Georgia corporation income tax for a percentage of eligible “telework” expenses, up to $1,200 per employee and for 100% of the costs of an assessment of the employer’s telework program up to a maximum credit of $20,000 per employer.
Definitions
Telework— Performance of normal and regular work functions on a workday that ordinarily would be performed at the employer’s principal place of business at a different location, thereby eliminating or substantially reducing the physical commute to and from that employer’s principal place of business.
Eligible telework expenses— Expenses incurred during the calendar year pursuant to a telework agreement, up to a limit of $1,200 for each participating employee.
Telework assessment— An optional assessment leading to the development of policies and procedures necessary to implement a formal telework program which would qualify the employer for the telework credit, including but now limited to a workforce profile, a telework program business case and plan, a detailed accounting of the purpose, goals, and operating procedures of the telework program, methodologies for measuring telework program activities and success, and a deployment schedule for increasing telework activity.
Credit amount
For tax years beginning or ending on or after January 1, 2008 and prior to January 1, 2012, a corporate taxpayer may claim a credit against its income tax liability for a percentage of eligible telework expenses incurred in the corresponding calendar year. The amount of the credit will be calculated as follows:
- The credit will be equal to 100% of the eligible telework expenses incurred pursuant to a telework agreement requiring the participating employee to telework at least 12 days per month if the employer’s principal place of business is located in an nonattainment area as designated by the United States Environmental Protection Agency;
- The credit will be equal to 75% of the eligible telework expenses incurred pursuant to a telework agreement requiring the participating employee to telework at least 12 days per month; or
- The credit will be equal to 25% of the eligible telework expenses incurred pursuant to a telework agreement requiring the participating employee to telework at least five days per month.
An employer will also be allowed a credit in the calendar year of implementation of the employer’s formal telework program for 100% of the cost of the preparation of a telework assessment, up to a maximum credit of $20,000 per employer.
Planning considerations
Application—An employer must submit Form IT-TW, Teleworking Approval Form and attach supporting documentation to the Department for approval between September 1 and October 31 of the year preceding the calendar year for which the tax credit is to be earned. An employer with multiple locations in Georgia must complete multiple Form IT-TWs.
Form—Attach approved Form IT-TW to the employer’s Georgia income tax return.
Carryforward provisions— No unused tax credit may be carried forward to apply to the employer’s succeeding years’ tax liability. The credit may not be applied toward a taxpayer’s prior years’ tax liability.