In 2013, Governor Deal signed legislation related to our program, allowing the owners of pass-through entities to receive a Georgia income tax credit for up to $10,000.
GOAL has received clarifying rules from the Georgia Department of Revenue (DOR) as well as instructions regarding how to apply for the $10,000 tax credits. Some important points are below:
- The paperwork must be submitted to the DOR in the name of the individual owner, rather than in the name of the business (pass through entity).
- An individual taxpayer may only receive a maximum tax credit of $10,000, regardless of ownership in multiple pass through entities;
- If the taxpayer's spouse is also owner in a pass through entity (or entities), the couple may be allowed a tax credit of $10,000 each, for a total of $20,000;
- All Georgia income, loss and expense from the taxpayer-selected pass through entities will be combined to determine Georgia income for purposes of this credit. Note: even W2 income from the entity may be included as well as K-1 income (i.e., salaries and profits may be counted). Such combined Georgia income shall be multiplied by 5.75% (Georgia's 2019 income tax rate) to determine that tax that was actually paid.
- Helpful example: the taxpayer’s Georgia income from pass through entities in 2019 must be at least $173,913 to take advantage of the full $10,000 tax credit ($173,913 * 5.75% = $10,000).
- Please note: 5.75% of the Georgia income from pass through entity (or entities) is the maximum amount that may be claimed as a tax credit, and any excess amounts may not be claimed in the current year and may not be carried forward.