Georgia Makes Favorable Changes to Job Tax Credits and Adopts PPE Tax Credit Regulation

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Recent changes to Georgia’s jobs tax credit rules may provide businesses with an opportunity to benefit from these credits even in cases where job numbers are down and more employees are telecommuting.  In addition, the state adopted regulations for its new jobs tax credit aimed at manufacturers of PPE.

By: Jeff Glickman, J.D., LL.M., Partner-in-Charge of Aprio’s State and Local Tax Practice

In response to the COVID-19 pandemic, Georgia is providing additional tax relief to businesses through favorable changes to its Job Tax Credit (JTC) programs, as well as the adoption of final regulations for the recently enacted Personal Protective Equipment Manufacturer Jobs Tax Credit (or the “PPE Credit”).

Here is a comprehensive breakdown of those changes.

Changes to the Job Tax Credit programs

There are two main changes to Georgia’s JTC programs that will help businesses continue to receive benefits:

  • Pursuant to House Bill 846 enacted last year: for the purposes of calculating a JTC or Quality Jobs Tax Credit (QJTC) for tax years 2020 and 2021, taxpayers that claimed a JTC or QJTC in 2019 will have the option to utilize the number of new full-time employee jobs or new quality jobs (as the case may be) claimed in 2019 (subject to certain modifications), or to calculate such jobs as currently provided by such credit provisions. In other words, Georgia businesses that claimed one of those credits in 2019 will not be penalized for job losses sustained in 2020 or 2021 due to COVID-19.
  • The Georgia Department of Community Affairs revised its JTC regulations, effective December 24, 2020, to allow telecommuting jobs within the state of Georgia to be eligible for the JTC if the job otherwise qualifies but the employee is not physically working from the business establishment location. Only those telecommuting jobs created in 2020 or 2021 will qualify, including qualifying jobs created prior to 2020 that became telecommuting jobs in 2020 or 2021.[1]

New regulations for the PPE Manufacturer Jobs Tax Credit

The Georgia Department of Revenue adopted final regulations for the PPE Credit that was enacted last year by the legislature to assist manufacturers that pivoted their manufacturing activities to PPE.[2]

The PPE Credit is effective for tax years beginning on or after January 1, 2020. There are two basic eligibility requirements for the PPE Credit:

  1. The manufacturer must otherwise qualify and claim the JTC (based on the tier/zone in which it is located), and
  2. It must be engaged in manufacturing PPE.

A “PPE Manufacturer” is defined by the Georgia Department of Revenue as “any business enterprise which is engaged in manufacturing PPE in this state,” and it includes businesses that, in response to COVID-19, began manufacturing PPE in Georgia. Excluded from this definition are:

  1. Retailers of PPE,
  2. Manufacturers of materials used to make PPE but not the PPE itself and
  3. Manufacturers of equipment used to make PPE.

“Personal protective equipment,” or “PPE,” is defined by the Occupational Safety and Health Administration (OSHA) as “…any protective clothing, helmets, gloves, face shields, goggles, facemasks, hand sanitizer and respirators or other equipment designed to protect the wearer from injury or to prevent the spread of infection, disease, virus or other illness. Such term shall include equipment identified under 29 C.F.R. Section 1910, Subpart I.”

The credit amount is $1,250 for each job that qualifies for the JTC and that is engaged in the qualifying activity of PPE manufacturing. The determination of whether a job is engaged in PPE manufacturing is conducted monthly, along with the calculation of qualifying jobs for the JTC.

For example, when calculating the JTC, we look at the number of qualifying jobs for each month and then divide that number by 12 (with a few exceptions) to get the average number of qualifying jobs for the year. For the PPE Credit: for each of those qualifying jobs in a given month, we will calculate the number of those qualifying jobs that are engaged in the qualifying activity of PPE manufacturing. Under the regulation, a qualifying job will also qualify for the PPE Credit if at least 50% of the time spent working that month was on manufacturing PPE.

The number of qualifying PPE manufacturing jobs will be determined each month (that number can be no greater than the number of qualifying jobs for the JTC), and the total will be divided by 12 to obtain the average number of qualifying PPE manufacturing jobs. The average number is then multiplied by $1,250 to determine the PPE Credit amount for that tax year.

The PPE Credit is calculated and reported on Form IT-CA — the same form used to calculate and report the JTC — and it has already been updated to include an additional page for the PPE Credit calculation. Any jobs created on or after January 1, 2025, are not eligible; however, jobs created before that date but maintained beyond that date are still eligible provided that the maintained job is eligible for the JTC.

The PPE Credit also provides for more favorable utilization benefits. Regardless of the tier/zone in which the business is engaged, which can limit the utilization of the JTC, all PPE Credits are eligible to be used to offset 100% of Georgia income tax liability, and unused credits may be carried forward for 10 years.  In addition, if the taxpayer still has excess PPE Credits for the year after offsetting the Georgia income tax liability, the taxpayer may also elect to offset their Georgia payroll tax liability.

Unpacking the PPE Credit and the corresponding rules and determining your eligibility can be a complex process — but that’s where Aprio can help. Our experienced team of tax experts constantly monitors these and other important state tax topics, and publishes significant developments in our monthly SALT Newsletter.

If you have questions about these credits and would like to see if you qualify, please reach out to the Aprio SALT group, and keep an eye out for more updates in future editions of the SALT newsletter.

Contact Jeff Glickman, partner-in-charge of Aprio’s SALT practice, at for more information.

This article was featured in the January 2021 Newsletter.

[1] Ga. Rule. 110-9-1-.02(6).

[2] Ga. Rule 560-7-8-.66. The legislation was enacted as part of House Bill 846 and the PPE Credit is codified at O.C.G.A. 48-7-40.1A.