Employer Tax Credit for Retraining

Can you get tax credits for employee retraining and education expenses?

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Jeff Glickman

State and Local Tax Leader | Tax Partner

How we can help

The U.S. Department of Labor Employment and Training Administration offers several tax credit programs that employers can access by hiring certain workers. Though these credits are great for employers looking to hire new staff, what about the personnel you already have? Are there any tax credits you can receive for training these workers?

No federal program is on the books yet, but you can find a retraining tax credit for employers at the state level. For businesses in Georgia that have recently acquired new equipment and technology, the Georgia Retraining Tax Credit can help offset the cost of teaching your current staff how to use your new hardware and software.

Taking advantage of tax credits means being well-versed in the law, enrolling workers in eligible programs, and simultaneously keeping track of all records. Indeed, things can get so overwhelming in terms of tax credits that it’s easy to leave money on the table. Another easy mistake to make is enrolling employees in training programs that don’t qualify for the retraining tax credit, thinking you’ll get some of your money back in the future.

This is where Aprio comes in.

Why should you care about the retraining tax credit for employers?

Your business is constantly growing, whether you’re adding new workers, moving personnel into new positions, or simply purchasing new equipment and technology. The Georgia Retraining Tax Credit is designed specifically with this last expense in mind.

Whenever you purchase new equipment and technology, you’re not just paying for the hardware and software. You also have to train employees on how to use it, and you have to implement and teach new business processes to ensure they’re used safely and effectively. This is a massive investment, and it’s one you can’t ignore if you want to grow your enterprise or stay competitive. The Georgia tax credit for retraining exists to help your business reduce its tax liability, enabling your company to reinvest more into its success.

Aprio helps companies identify and calculate eligible retraining tax credits. We can also prepare and submit applications for you so your company can claim these credits.

How can Aprio help me claim an employer tax credit for retraining?

Aprio’s SALT team engages in a comprehensive process to ensure that you properly claim and maximize your retraining tax credit. First, we identify eligible training programs that are used in conjunction with newly installed equipment or newly implemented technology. Second, we work with the appropriate personnel in your company to determine factors such as:

  • Total employees trained
  • Total hours trained
  • Average wages of employees trained

This information is key to ensuring that you receive the tax credits you’re owed. Third, depending on the information we uncover, we can estimate potential credit benefits. The results will indicate whether a credit study to uncover additional credits would be a worthwhile investment for your company.

Is my business eligible for these tax credits? and is the cost of retraining worth it?

Aprio has specialized experience in helping companies find the most beneficial credits possible, even in a niche industry or under circumstances that may make claiming credits difficult. For example, if a business wants to claim retraining credits for new technology or software, it can’t be for commercially, mass produced software packages for things like word processing and database management. In these cases, we can work with companies to find the most beneficial credits from sources such as new enterprise resource planning software and eligible enterprise solutions.

We can also save you money before you decide to invest in training. We do this by looking at the eligible retraining programs available for your company compared to the potential credit available. Under the Georgia Retraining Tax Credit, you’re only allowed to utilize credits to offset a maximum 50 percent of your income tax liability. If you’re a corporation, this is your tax liability. If you’re a pass-through entity, this is the tax liability of your partners and shareholders. Comparing the credit potential and the cost of training, Aprio can determine whether pursuing eligible credits makes sense in your case.

Our thorough calculation includes evaluating each employee for the credit. For example, training and education for management personnel and new hires can’t be included in the credit calculation. Each employee also has per-course and annual credit limits that we factor into the calculation. Failing to consider these variables, which is never a problem when working with Aprio, could lead to receiving fewer tax credits than you had anticipated and can negatively impact the return on your retraining investment

Let Aprio go to work for you

As mentioned above, Aprio’s SALT team engages in a comprehensive analysis of your potential retraining tax credit.  This includes all assistance necessary for qualifying for and claiming the credit, such as:

  • Preparing and submitting tax credit applications to the appropriate college within the Technical College System of Georgia.
  • Claiming as close to the maximum 50 percent of eligible retraining costs as possible. For manufacturing companies with new equipment, this includes both training to use the equipment and training to learn new business processes.
  • Accurately calculating retraining costs, which primarily consist of Georgia-resident employees’ time spent in qualified retraining on the basis of the employees’ average hourly pay rate.
  • Preparing the tax credit forms and supporting documentation for your tax return.

Aprio’s service is ideal for any company that retrains Georgia-resident employees on newly installed equipment or newly implemented technology and software. It’s likely that if you run a modern business in Georgia, your enterprise falls under this category. You can optimize your tax credits for retraining, even if you’ve claimed Georgia Retraining Tax Credits in the past, by working with Aprio.

Employer Tax Credit for Retraining


How Can I Get Started?

Is your company purchasing new equipment or technology? Contact Aprio’s SALT team. We’ll determine if a retraining tax credit can be pursued and is worth the effort. We can also help you decide if the retraining tax credit makes sense for your business based on its size and the scale of training you’d undertake. We’ll also provide templates and guidance to streamline the retraining tax credit documentation gathering process.

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