In 2018, Georgia passed House Bill 918 to modify and expand usage of Georgia tax credits, particularly for credits against Georgia payroll tax withholding.
Georgia law permits taxpayers to elect to use certain income tax credits, such as the Jobs Tax Credit or Research & Development Tax Credit, against their Georgia payroll tax withholding obligations. Such an election makes the credits, in effect, refundable.
Effective March 2, 2018, taxpayers undergoing a sale, merger, acquisition or bankruptcy are permitted to transfer credits against Georgia payroll tax withholding, assigned on or after January 1, 2018, to an affiliated entity. Historically, tax credits were generally treated as non-transferrable absent specific exceptions. However, House Bill 918 dramatically improves tax credit utility for taxpayers undergoing a transition.