Georgia Retraining Tax Credit
The Georgia Retraining Tax Credit is a state income tax credit available to businesses that train Georgia-based employees on new software, technologies, or equipment. It is designed to encourage businesses to invest in workforce development and is administered by the Georgia Department of Economic Development under O.C.G.A. § 48-7-40.18.
Program at a Glance
| Credit amount | Up to 50% of eligible training costs, capped at $1,250 per employee per year |
| Who qualifies | Georgia businesses of any size or industry that conduct eligible employee training |
| Applies against | Georgia state income tax |
| Carry forward | Up to 10 years |
| Statute | O.C.G.A. § 48-7-40.18 |
Eligibility
Any Georgia business that trains employees on new technologies, software, or equipment may qualify. The program is not limited to a specific industry — manufacturers, healthcare organizations, distribution companies, professional services firms, and others have successfully claimed this credit. The training must involve new skills tied to a specific technology, software platform, or piece of equipment introduced to the workplace.
What Training Qualifies
- Training employees on new enterprise software platforms (ERP, CRM, accounting, operations management systems)
- Training on new manufacturing equipment, industrial machinery, or specialty tools
- Training on new healthcare technology platforms, electronic medical records systems, or clinical equipment
- Training on new warehouse management, supply chain, or logistics software
- Any formal structured training program tied to the introduction of a new technology or system in the business
What Does Not Qualify
- Training that maintains existing skills rather than developing new ones tied to a specific technology change
- General management, leadership, or soft-skills training not connected to a qualifying technology
- College or university tuition reimbursement programs not tied to a qualifying training activity
Credit Calculation
The credit equals the lesser of (a) 50% of the employer’s direct costs for qualifying training or (b) $1,250 per trained employee per year. Direct costs include fees paid to trainers or training providers and certain materials costs directly associated with the training. Internal labor costs for time spent in training are generally not included in the cost base.
How to Claim
The credit is claimed on the Georgia income tax return. The business must obtain pre-approval from the Georgia Department of Economic Development before the training begins for certain training programs, or submit documentation of completed training depending on the program type. Contemporaneous records of the training content, participants, costs, and qualifying technology should be maintained.
Key Notes
- The $1,250 per-employee cap applies per tax year — a business training many employees can generate a substantial aggregate credit
- Both the cost percentage limit (50%) and the per-employee cap ($1,250) apply — whichever is lower governs
- Credits exceeding the current year’s Georgia income tax liability carry forward for up to 10 years
- The program applies to businesses of all sizes — there is no minimum or maximum employee count
- Training on AI tools, automation software, and other emerging technologies increasingly qualifies as businesses adopt these systems
Schedule a time to connect and take a closer look HERE.
FAQs
Georgia Retraining Tax Credit
The Georgia Retraining Tax Credit rewards Georgia businesses that invest in training employees on new or enhanced software, equipment, technologies, or business processes. Eligible companies can receive a credit of up to 50% of qualifying training costs, capped at $1,250 per eligible W-2 Georgia-based employee per year.
Common qualifying examples include training employees on new software systems, equipment, artificial intelligence, and new technologies. Qualifying trainings vary widely, and include ERP or CRM upgrades, learning new manufacturing equipment, AI automation tools, new medical equipment, Lean / Six Sigma, ISO 9001, and more. Training may include vendor-led training, online/self-paced training, on-the-job training, or employee instruction led by knowledgeable team members.
Eligible employees generally must be Georgia-based W-2 employees, work at least 25 hours per week, have been employed for at least 16 weeks at the time of training, and must be independent contributors or first-level managers.
Qualifying costs may include employee wages for time spent in eligible training, wages for employees leading the training, fees paid to third parties to develop or deliver the training, and the cost of developing training materials.
No. The program can be valuable for companies of any size, as long as they have qualifying Georgia employees and eligible retraining activity. We have completed Georgia Retraining Tax Credit projects for businesses with 5 employees, thousands of employees, and every size in between.
Yes. One of the best things about the Georgia Retraining Tax Credit is that all credits get approved by the Technical College System of Georgia before any credits appear on the Georgia tax return. Approval can happen after training has been completed.
The overall process generally takes 6 to 12 weeks, depending on the availability of information and response times from the company and government agencies. Trove's process is designed to minimize the client's time commitment, often requiring only a few hours from the HR or leadership team.
After approval and completion documentation, the credit is typically claimed on a Georgia income tax return using the applicable Georgia retraining credit forms. Trove works with the company and tax preparer to provide the information needed to claim the credit.
Yes. Businesses that continue investing in eligible employee training may be able to claim the credit annually, creating a recurring tax savings opportunity.
Georgia Retraining Tax Credits can offset up to 50% of the tax liability at the entity level. For businesses that are pass-through entities that don't elect to pay Georgia income tax at the entity level, the credits pass through to owners via their K-1s.
Businesses can amend Georgia income tax returns to retroactively claim credits within one year of the filing date of the original return, as long as it was timely filed (including extensions).
Yes. Any Georgia Retraining Tax Credits can be carried forward for 5 years. Any credits earned in 2024 or earlier can carry forward for 10 years.