Finding Money & Increasing ProfitThrough Tax Credits

David McMillian, President

Starting Point

Our Purpose: Help Business create new opportunities.

Business Activities create Tax Credit Opportunities. (Hiring, Training, Job Creation, Investment, Research & Development, etc.)

Agenda

1. Tax Credit Background2. Key Federal Tax Credit Opportunities3. Key Georgia Tax Credit Opportunities4. Action Plan/Recommendations5. Q & A

Greater than 80% of companies do not capture every tax credit opportunity.

Why Tax Credits?

1. Economic Development

2. Awareness

3. Focus

How are Tax Credits Designed?

• Activity – Training, Capital Expenditures, R&D, Hiring• May be limited by Industry

• Location– Located in Targeted Area for Economic Development

• Hybrid (Location & Activity)– Located in Targeted Area & Hire or Create Jobs, etc.

Key Federal Tax Credit Opportunities

Federal New Hire Tax Credit

• Work Opportunity Tax Credit– Up to $2,400 or up to $9,600 per new hire• 9+ Employee Target Groups

– Recipients of Foods Stamps, Unemployment Benefits, SSI Benefits, Temporary Assistance for Needy Families, Unemployed/Disabled Veterans, Felons, etc.

– Tax Credit based on Hours Worked & Wages Earned during first year of employment• Minimum 120 hours worked to be eligible.

More than you Think

• Examples– 46 Million People on Food Stamps– 4+ Million People on TANF– 5.5 Million People on SSI Benefits– 500,000+ Unemployed Veterans

*USDA, Social Security, VA, Dept. of Labor

New Hire Process

• New Hire Completes Digital/Manual Questionnaire – Most Companies handle during New Hire

Onboarding– New Hire Answers Questions Related to Target

Groups– New Hire gets approved by State of Residence

(Process Similar to Insurance Claims Verification)

Key Georgia Tax Credit Opportunities

Georgia Retraining Tax Credit• Capture up to 50% of qualified training costs

up to $1,250 per eligible employee– Retroactive for 1 year– Training Costs include Employee Wages, Trainer

Wages, Vendor Fees for Training, Travel Expenses, Development Time, Training Equipment, etc.

– Software, Technology, Equipment (New or Upgraded)– GA Residents Only, Full-Time, Existing Employees,

Non-Owner/Senior Management

Qualified Examples

• OmniTracs• McLeod• Truckmate• ELD Software• Phone Systems• Marketing/Analytics

Software• Payroll/HRIS Software

• Orbcomm• Driver Cameras• Symphony• Keep Trucking• Four Kites• Security Systems

• Vendor Portals

Georgia Retraining Tax Credit Cont.• Programs (DNQ)– Best Practices/Industry Conferences– Compliance/Safety Training– Customer Service/Soft Skill, etc.

• Training Costs (DNQ)– Hardware/Software Cost– Implementation/Data Migration– Support Fees

Recent Tax Credit Projects

• Trucking Company (12 Office Employees) Implemented McLeod = $15,000– All Qualified Employees Reached the $1,250 per

Employee Maximum

• Trucking/Logistics Company (20 + Office Employees) Standard Year = $21,000+

What’s your Tax Credit Gold Mine?

• BHAG (Big Hairy Audacious Goal)– Steven Covey & Jim Collins

• _________ Employees x $1,250 Max =

___________________.

Georgia Job Tax Credits• Georgia Job Tax Credit (Must be in Favored Industry**

except Tier 1-Bottom 40 Counties)– Tier 1– Tier 2– Tier 3– Tier 4– Less-Developed Census Tract (LDCT)

• Georgia Military Zone Tax Credit (Any Business)• Georgia Opportunity Zone Tax Credit (Any Business)

Job Creation ThresholdsLevel Jobs Created Benefit Tax Notes

Tier 1 5 $3,500 Income/WH Wait 1

Tier 2 10 $2,500 Income Wait 1

Tier 3 15 $1,250 Income Wait 1

Tier 4 25 $750 Income Wait 1

LDCT 5 $3,500 Income Wait 1

Military Zone 2 $3,500 Income/WH Same Year

Opportunity Zone

2 $3,500 Income/WH Same Year

GA JTC: Notes• Qualifying Jobs– Work at least 35 hours per week– Be offered Healthcare at time of employment– Higher Weekly Wages than county with lowest weekly

wages• Bonuses– Joint Development Authority Bonus: Additional $500/job.• Essentially all GA Counties (But 1)

Withholding Tax Options

• Tax Credits– Opportunity Zone Tax Credit– Military Zone Tax Credit

• Process– File Application/Notice through Georgia Online

Tax Credit within 30 Days of Filing Corporate Income Tax Return

– Once approved, applied to next payment

Georgia Parolee Tax Credit• Through 1/1/2020, $2,500 per qualified new

hire. – Works 40 Consecutive Weeks in 12 Month Period– Full-Time (30 Hours/Week) and Earns Minimum

Wages Equal to or Above the GA County with the Lowest Average Weekly Wages

– Granted Parole within 12 months of Hire Date– **Can be Tracked through Federal New Hire Tax Credit

Program

Other Georgia Tax Credits

• Headquarters Tax Credits• Basic Skills Tax Credit• Childcare Property & Childcare Tax Credits• Research Tax Credit• Film Tax Credit

Action Plan & Recommendations

Action Plan

1. Begin Pursuing & Capturing Every Tax Credit Opportunity

2. Look at Previous Years for Potential Tax Credits3. Implement Process to Track Business Activities4. Maximize Tax Credit Opportunities

Resources

• https://dor.georgia.gov/documents/tax-credits• https://www.irs.gov/businesses/small-businesses-

self-employed/work-opportunity-tax-credit• https://www.georgia.org/competitive-

advantages/incentives/tax-credits• https://www.dca.ga.gov/community-economic-

development/incentive-programs/job-tax-credits

Questions?

About McMillian• Our purpose & passion is to help businesses create

new opportunities.• Core Values– Family, Integrity, Excellence, Teamwork

• Founded in 1998 & history goes back to 1972• Client Goals: Find More & Make it Easy• Over 800 clients around the country.

Contact Information

• David McMillian, President– (706) 302-7095– dmcmillian@mcataxcredits.com