Can a taxpayer that already claimed Georgia's jobs tax credit for certain jobs later amend its return to claim the quality jobs tax credit using those same jobs?

Plain-English summary

A corporation (fiscal year July 1-June 30) was dually eligible for two Georgia hiring credits: the jobs tax credit (O.C.G.A. §§ 48-7-40, 48-7-40.1) and the quality jobs tax credit (O.C.G.A. § 48-7-40.17). It had claimed the jobs tax credit starting with its year ended June 30, 2009 and, because of limited income-tax liability, had large unused carryforwards it did not expect to use. It later realized it had also qualified for the quality jobs credit starting with the year ended June 30, 2012 but had not claimed it. So it filed an amended return for the year ended June 30, 2013 to establish the quality jobs credit and to remove those jobs from the jobs-tax-credit calculation -- effectively trying to move the same jobs from one credit to the other. It asked whether that was allowed.

The Department ruled no. A taxpayer may claim both credits if it meets all requirements for each, but not for the same jobs. The election of which credit applies to a job is made when the taxpayer first claims either credit, and that election cannot be changed. Jobs claimed for the jobs tax credit are excluded from all quality jobs credit calculations (Regulation 560-7-8-.51(4)(d)1), and the credits are not interchangeable (Regulation 560-7-8-.36(12)). So the taxpayer could not amend to shift the jobs; it may continue its jobs-tax-credit carryforward unmodified. (Because of this, the one-year-claim question under § 48-7-40.17(e) for the amended return was moot, and there was no need to amend the 2011 or 2012 returns.)

What this means for you

Employers eligible for more than one Georgia hiring credit

Decide up front which credit to use for each job. Once you claim a job under the jobs tax credit, you cannot later re-characterize that same job as a quality-jobs-credit job -- even by amended return, and even if the first credit is going unused as a carryforward. You can still use both programs, but on different jobs.

Accountants and tax professionals

The election is irrevocable and is deemed made when the credit is first claimed. Jobs claimed for the jobs credit are carved out of every quality-jobs-credit calculation. The Department stressed it has applied this rule to all taxpayers since the quality jobs credit was enacted in 2009. Note the interplay with the one-year rule in § 48-7-40.17(e): here it did not matter, because the underlying job-switching was impermissible regardless of timing.

Common questions

Q: Can a taxpayer claim both the jobs tax credit and the quality jobs tax credit?
A: Yes, if it meets all statutory and regulatory requirements for both -- but the same jobs cannot be counted for both credits.

Q: We already claimed the jobs credit for certain jobs; can we amend to use the quality jobs credit for them instead?
A: No. The Department held the per-job credit election is made when first claimed and cannot be changed, so those jobs cannot be moved to the quality jobs credit.

Q: What happens to the unused jobs-tax-credit carryforward?
A: The taxpayer may continue to carry forward and claim the jobs tax credit without modification for the quality jobs credit, since those jobs were elected into the jobs credit.

Q: Can another taxpayer rely on this ruling?
A: No. It binds the Department only as to the requesting taxpayer and its specific facts and has no precedential value for others.

Citations and references

Statutes and regulations:

• O.C.G.A. § 48-7-40.17(b), (e) -- quality jobs tax credit; election out of other credits; one-year claim rule
• O.C.G.A. §§ 48-7-40, 48-7-40.1 -- jobs tax credit
• Revenue Regulation 560-7-8-.51(4)(d)1. -- quality-jobs-credit election deemed made when claimed; jobs claimed for the jobs credit excluded from quality-jobs-credit calculations; credits not interchangeable
• Revenue Regulation 560-7-8-.36(12)(a), (b) -- only one credit per project/jobs; jobs and quality jobs credits not interchangeable

Source

• Landing page: Georgia Income Tax Letter Rulings
• Original PDF: LR IT-2015-02

Original ruling text

Georgia Letter Ruling: LR IT-2015-02
Topic: Quality Jobs Tax Credit
Date Issued: September 15, 2015

This letter is in response to your letter requesting a ruling regarding whether Taxpayer can claim
the quality jobs tax credit using jobs that were included when Taxpayer claimed the jobs tax
credit.
Facts as Presented by the Taxpayer
Your letter to the Department states: “The Taxpayer files a Georgia corporation
income tax return annually on a fiscal year basis for the period of July 1-June 30.
“The Taxpayer is dually eligible for the Georgia Quality Jobs Credit under Georgia Code § 48-740.17 and the Georgia Jobs Tax Credit under Georgia Code §§ 48-7-40 and 48-7-40.1. The
Taxpayer first claimed the Georgia Jobs Tax Credit for its year ended June 30, 2009, and has
continued to claim the credit in each succeeding tax year.
“Due to limited income tax liabilities, the Taxpayer’s Georgia Jobs Tax Credit has not been used,
and has been carried forward. The Taxpayer does not foresee utilizing much of the Jobs Tax
Credit carryfoward in future years.
“The Taxpayer also qualified for the Georgia Quality Jobs Tax Credit beginning with the tax
year ended June 30, 2012, but did not claim it on the original return filed for the tax year. The
Taxpayer filed an amended return for the tax year ended June 30, 2013 on March 11, 2015, in
order to (a) establish the Georgia Quality Jobs Credit for that year and (b) revise the Georgia
Jobs Tax Credit calculation to remove jobs that were eligible for the Georgia Quality Jobs Credit.
The amended return was filed prior to submitting this request for a ruling in order to comply with
the provisions set forth in Georgia Code § 48-7-40.17(e). A copy of the amended return is
attached hereto and made part of this request. The amended return did not result in a claim for
refund.
“In calculating the Georgia Quality Jobs Tax Credit, the Taxpayer used the tax year ended June
30, 2011 as its base year, and the tax year ended June 30, 2012 as the first year in which it had an
increase of 50 or more qualifying jobs. The Taxpayer acknowledges that it is not eligible to
actually claim the Georgia Quality Jobs Credit for the tax year ended June 30, 2012, and that its
Georgia Jobs Tax Credit carryforward calculations must be revised to remove jobs that qualified
for the Georgia Quality Jobs Credit. The Georgia Jobs Tax Credit claimed on the amended
return filed for the tax period ended June 30, 2013 is correct as revised.
“Pursuant to Georgia Regulation § 560-7-8-.36(12)(a), the Taxpayer has not claimed any tax
credits under Georgia Code §§ 48-7-40.2, 48-7-40.3, 48-7-40.4, 48-7-40.7, 48-7-40.8, or 48-740.9 for projects for which the Georgia Jobs Tax Credit or the Georgia Quality Jobs Tax Credit
has been claimed.”

Georgia Letter Ruling: LR IT-2015-02
Topic: Quality Jobs Tax Credit
Date Issued: September 15, 2015
Page 2 of 4

Issue #1
Whether Taxpayer’s amended return for tax year ending June 30, 2013 was filed within the one
year rule under the quality jobs tax credit?
Issue # 2
Whether Taxpayer can amend returns filed for tax years ending June 30, 2011, and June 30,
2012, to restate the jobs tax credit calculations and carry forward and show the establishment of
the quality jobs tax credit with a base year of June 30, 2011; or are the adjusted base period
amounts and credit carry forward shown in the amended return filed for the tax year ending June
30, 2013, sufficient to show the change to the jobs tax credit and the establishment of the quality
jobs tax credit?
Issue #3
Whether Taxpayer can continue to carry forward unused job tax credit as revised and continue to
generate job tax credit in years 2-5 from previous job expansions?
Authorities
O.C.G.A. § 48-7-40.17 (b) provides in part that:
“(b) A taxpayer establishing new quality jobs in this state or relocating quality
jobs into this state which elects not to receive the tax credits provided for by
Code Sections 48-7-40, 48-7-40.1, 48-7-40.2, 48-7-40.3, 48-7-40.4, 48-7-40.7,
48-7-40.8, and 48-7-40.9 for such jobs and investments created by, arising from,
related to, or connected in any way with the same project. . .”
O.C.G.A. § 48-7-40.17 (e) provides that:
“(e) Notwithstanding Code Section 48-2-35, any tax credit claimed under this
Code section shall be claimed within one year of the earlier of the date the
original return was filed or the date such return was due as prescribed in
subsection (a) of Code Section 48-7-56, including any approved extensions.”
Revenue Regulation 560-7-8-.51 (4)(d)1. provides that:
“1. The taxpayer must elect not to receive the tax credits provided for by Code
Sections 48-7-40 and 48-7-40.1 for such jobs. This election is deemed to have
been made when the taxpayer claims the quality jobs tax credit on its state
income tax return. Taxpayers may not alternatively claim the jobs credit provided
by Code Sections 48-7-40 and 48-7-40.1 and the quality jobs tax credit with
respect to such jobs. These credits are not interchangeable. Jobs for which the job
tax credit is claimed under Code Sections 48-7-40 and 48-7-40.1 shall be

Georgia Letter Ruling: LR IT-2015-02
Topic: Quality Jobs Tax Credit
Date Issued: September 15, 2015
Page 3 of 4

excluded from all calculations for the quality jobs tax credit under this
regulation.”
Revenue Regulation 560-7-8-.36 (12)(a) and (b) provides that:
“(a) Taxpayers may not claim or carry forward the job tax credit for any given
project for which either an investment tax credit is claimed under O.C.G.A.
Sections 48-7-40.2, 48-7-40.3, or 48-7-40.4, or an optional investment tax credit
is claimed under O.C.G.A. Sections 48-7-40.7, 48-7-40.8, or 48-7-40.9. Neither
may taxpayers alternately elect to claim the investment tax credit or optional
investment tax credit in one year and the job tax credit in the next year for a given
project. These credits are not interchangeable. Taxpayers may elect to take only
one of the investment, optional investment, or quality jobs tax credit for a given
project.
(b) Taxpayers may not claim or carry forward the job tax credit for any jobs for
which the headquarters job tax credit or the quality jobs tax credit is claimed
under O.C.G.A. Section 48-7-40.17. Neither may taxpayers alternatively claim
the jobs credit provided by O.C.G.A. Sections 48-7-40 and 48-7-40.1 and the
headquarters job tax credit or the quality jobs tax credit with respect to such jobs.
These credits are not interchangeable.”
Ruling
Ruling on Issue #1
The Department’s records indicate that Taxpayer filed their tax year ending June 30, 2013 tax
return on March 15, 2014, and Taxpayer filed an amended return for tax year ending June 30,
2013, on March 11, 2015. However, due to the ruling on Issue # 2 this issue is moot and no
ruling needs to be issued.
Ruling on Issue #2
Based on the facts stated herein, it is the opinion of this Department that Taxpayer cannot amend
their tax year ending June 30, 2013 tax return and claim the quality jobs tax credit and include
jobs that Taxpayer has claimed for the jobs tax credit. A taxpayer can claim both
the jobs tax credit and the quality jobs tax credit if they meet all statutory and regulatory
requirements for both credits. However, the same jobs may not be claimed. A taxpayer elects
which credit will be used for the jobs when the taxpayer first claims either the jobs tax credit or
the quality jobs tax credit, and that election cannot be changed. No jobs that were included when
the jobs tax credit was claimed can be included in any calculations for the quality jobs tax credit.
Please note that the Department has applied this rule to all taxpayers since the quality jobs tax
credit was enacted in 2009. Consequently, there is no need to amend the June 30, 2011 or June
30, 2012 tax returns.
Ruling on Issue #3

Georgia Letter Ruling: LR IT-2015-02
Topic: Quality Jobs Tax Credit
Date Issued: September 15, 2015
Page 4 of 4

Based on the facts stated herein, it is the opinion of this Department that Taxpayer can continue
to claim the jobs tax credit without any modifications for the quality jobs tax credit, since
Taxpayer elected the jobs tax credit for these jobs and they cannot be included when the quality
jobs tax credit is claimed.

The opinions expressed in this ruling are based upon the information contained in your request
and are limited to the specific transactions and taxpayer in question. A ruling has no
precedential value except to the person to whom the ruling was issued and then only for the
specific transaction addressed in the ruling. Should the circumstances regarding this transaction
change, or differ materially from those represented, then this ruling may become invalid. In
addition, please be advised that subsequent statutory or administrative rule changes or judicial
interpretations of the statutes and rules upon which this advice is based may subject similar
future transactions to a different tax treatment than those expressed in this response.