HR Can Help With Tax Credits, But Be Careful
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Your client's human resource (HR) department can be a tremendous resource to help identify and utilize tax credits. Since most state tax credits are about hiring and retraining employees, HR is on the front lines for spotting and being involved with the activities that quality for the tax credits. For example, if headcount is planned to go up (that is, job tax credit), HR will be hiring these new employees. Or if your client's Enterprise Resource Planning (ERP) system will be upgraded (that is, retraining tax credit), then the HR's training team will be involved with planning employee training.
By keeping HR on the lookout for tax credit opportunities, your client's potential for identifying tax credits increases. BUT BE CAREFUL -- since HR is not involved with your client's income taxes, they may not be aware of the real net after-tax benefits. For example, your client may have minimal income tax liability and can't utilize the tax credits (NOLs, ESOP, "C" corp. professional services and other reasons). We have seen a client's HR team spend a lot of time and money applying for, documenting, and obtaining tax credits only to find out later that the company can't make use of them.
As you come up for air after tax season and talk with your clients and prospective clients, reach out to your client's HR professionals to discuss tax credits. Together you may be able to create added value that goes a long way in strengthening your client relationships!
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State Tax Expenditures = $$ for Your Clients!
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Finding the right credits and incentives for your clients is not easy. Especially if you have clients doing business in more than one state, it can be overwhelming to dig out all of the possible credits and incentives for them. Tax information services such as CCH or others may only scratch the surface. Often there are multiple departments, agencies, and organizations within each state that are responsible for credits and incentives. We found one source that can help. It's the Institute on Taxation and Economic Policy (ITEP) page for "Tax Expenditure Reports" (access it here) that lists reports from each state. It's funny how states call tax credits, exemptions, and incentives "expenditures." That's one way to look at it. But we say those expenditures are just another way you can help make $$ for your clients. Combine that with investigating the state economic development sites, and you will have a pretty good idea of which credits and incentives to pursue. Your clients will appreciate your help in turning state "expenditures" into $$ for them!  |
About Us------------------------------------------------------------------------- Alpharesults has assembled a team with the specialized knowledge and approach required to obtain Georgia income tax credits. We are not a public accounting firm. Rather, our services complement those of public accounting firms and do not create conflicted loyalties, because our professionals do not perform attestation work or other external audit functions. We focus on small to medium-sized businesses and work exclusively in Georgia with a wide variety of in-state and out-of-state accounting firms. For more information on our services, follow this link. |
