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 A Tax Professional's Guide to Credits and Incentives, Courtesy of Alpharesults
 Vol. VIII No. 6 June 2014
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In this issue
Which Employees Count for Tax Credits?
Spotlight on New York Credits and Incentives

Hello!

Welcome to Alpha-Mail, the monthly newsletter about tax credits and incentives for tax professionals.

This month, learn more about how to decide which of your clients' employees count for tax credits.  Also, some of you may have clients with operations in New York, so be sure to see our overview of New York credits and incentives. We hope you can use this information to strengthen your client relationships! 

 

Thank you for reading Alpha-Mail -- please click reply to tell us what you think.

 

All the best, 

Dale&JimSigsSM1     

 Dale Stapler    Jim Tinsley
     Alpharesults, LLC 

 

 

 

Which Employees Count for Tax Credits?                   
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As your clients' business improves, they may start to hire additional employees or need to retrain their existing employees.  As with many states, there is a lot of confusion about the Georgia tax credits and employment levels. Here is a high level overview that may help in determining which employees count for the credits:

 

All tax credits:

  • Can NOT count 1099s, contractors, or employees of third party firms

Retraining Tax Credit:

  • Georgia resident (for example, CANNOT reside in South Carolina and commute to Augusta)
  • Existing employee (employed with the company a minimum of 16 weeks)
  • Full time (employed for a minimum of 25 hours per week)
  • Leased employees okay (for example, PEO)

Job Tax Credit (including Opportunity Zones, Military Zones and Less Developed Census Tracts):

  • Georgia withholding (for example, CAN reside in South Carolina and commute to Augusta)
  • All employees (new and existing)
  • Full time (regular work week of 35 hours or more) and not seasonal (no predetermined end date) 
  • Leased employees okay (for example, PEO)
Check with your clients about their plans to add jobs and train employees. They may have potential $$ tax credits!  

 

 

JimSig  

 

 


New York Credits and Incentives            
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As we've mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

 

We were recently asked about credits and incentives in New York. I was able to speak with some New York economic development professionals and learned some of their details (New York's Business First site click here).

 

A big difference between New York and most other states is that they have some of the highest corporate and personal tax burdens.  New York ranks 50th in the The Tax Foundation's 2014 Business Tax Climate Index (click here).

That being said, New York has a vast array of incentives, credits, and programs to assist businesses, education, nonprofits, and communities for "investment" in New York jobs and development.  The Regional Economic Development Council (REDC) initiative yearly application round closed on June 16.  It covers up to $750 million in grants, tax credits, loans, and "other resources."  A Consolidated Funding Application (CFA) serves as a single application for state economic development resources from numerous state agencies and regional councils.  START-UP NY is a new initiative that sets up university-sited or connected tax-free zones for new and expanding businesses (click here).  You may have seen the TV advertisements for this program, and it sounds great, but there are a LOT of hoops to jump through, including business type and location.

Another big consideration -- a long application and approval process is required for all of New York's primary incentives.  And, New York's credits and incentives are far more complicated than most other states.
 
Compared to Georgia, New York has:
  • Higher taxes:  Higher corporate income tax.  Far higher personal state income taxes.  Higher sales taxes and far higher property taxes.
  • A narrower range of industries eligible for incentives if adding jobs, a narrower range for capital investments, and a far narrower range for training incentives.     
  • NO opportunities for incentives unless pre-approved by state and/or regional council officials.
  • Location, location, location -- if that's what is important to the business 
To summarize, New York is not very competitive for new and expanding businesses, unless those businesses really need New York's prime location for global finance, corporate headquarters, global media and culture. 
 
Do any of your clients have New York connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

 
DaleSig

   

 


About Us
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Alpharesults has assembled a team with the specialized knowledge and approach required to obtain state tax credits and incentives.  We are not a public accounting firm.  Rather, our business 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 with a wide variety of accounting firms.  For more information on our services, follow this link. 

 
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Contact Information
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email:  alpha-mail@alpharesults.com                   phone: 770-667-1332
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