Year-end Tax Planning and the New Tax Credit Laws
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Did you know that the new tax credit laws give you an opportunity to provide more in-depth year-end tax planning for your clients? Here's how:
Your clients' year-end tax planning sessions should include discussions about 2009 wrap-up as well as planned activities for 2010. Hopefully your clients won't spend most of the meeting discussing the latest Federal/Inside-the-Beltway hype! It may be a struggle to re-direct the topic to get them talking about their business today and how you can help.
Let clients know that some new Georgia tax credit laws are in effect. The main changes you need to discuss deal with the Retraining Tax Credit (RTC) and the Job Tax Credit (JTC).
RTC changes:
As we reported a few months back, we met with Pam Griffin at the Technical College System (TCSG) to discuss the new Retraining Tax Credit law contained in HB 439. As of this writing, still no guidelines for 2009!
The new law excludes certain types of training on "commercially, mass produced software packages for word processing, data
base management, presentations, spreadsheets, e-mail, personal
information management, or computer operating systems," but then makes an exception for "those providing support or
training on such software."
TCSG and DOR are STILL trying to clarify and resolve just what these words mean. What are commercially, mass produced software packages? What counts & what doesn't? What is meant by support? Stay tuned -- we are all keenly interested in their interpretation of the law.
For your clients -- Discuss activities they plan to complete by 12/31/09 and what they plan to do in 2010. Even though the new law imposes a reduced yearly credit cap per employee of $1,250, your clients can still maximize their credits by increasing the number of employees trained.
JTC Changes:
GOOD NEWS -- Provides for the job credit to be claimed in Year One for jobs created in Year One. Eliminated the requirement to maintain the new jobs for a year before utilizing the credit.
BAD NEWS -- Reduced the "look-back" from three years to one year.
The regulation has been heard for public comment (we attended the hearing on 9/27) and will most likely be approved and finalized in October.
For your clients -- Now is a good time to review clients' employment level changes to see if they meet the minimums to qualify THIS year.
In-depth Review Opportunities:
This year / 2009 : If clients have potential for tax credits, dig a little deeper to see if it is worth the effort & investment to get the tax credits now vs. later.
Next year / 2010: Maximize the RTC (potentially using your professional services) and hit the minimum head counts to obtain the JTC.
