By: Stephen Bradshaw | 06/22/26
• Georgia businesses may be able to claim a credit for approved retraining programs tied to new equipment, technology or software.
• The credit can equal 50% of qualified retraining costs, subject to a $500 per employee, per program limit and a $1,250 annual maximum per employee. It may offset up to 50% of Georgia income tax liability.
• AI adoption, automation, ERP implementations, CRM upgrades and new operational systems can create retraining needs for existing employees.
• Eligibility depends on the nature of the training, the employees being trained, the costs claimed and approval through the Technical College System of Georgia. TCSG notes a 30-day approval turnaround after submission.
• Documentation should connect the business change, the retraining activity, employee participation, qualified costs and program approval.
AI is starting to show up in places where employees used to rely on manual review, spreadsheets, email routing, disconnected reports and institutional memory. For many businesses, the first AI conversation sounds futuristic. The second conversation is usually much more practical: Who is going to use this? Who needs to be retrained? What changes in the workflow?
That is why the Georgia Retraining Tax Credit is getting a closer look from companies investing in technology. The credit is not designed only for companies building technology. It is designed for Georgia employers retraining existing workers because the business has implemented new equipment, new technology or new software.
That distinction matters. A company may not think of itself as a technology business, yet still be in the middle of a significant digital shift. A manufacturer may add AI enabled quality review. A healthcare practice may implement a new practice management system. A construction supplier may roll out an inventory platform. A professional services firm may introduce workflow automation, document management tools or new client reporting software.
In each case, the cost is not just the software license. The real cost is often the transition from old habits to new processes. Employees need to learn different screens, different approval paths, different exception reports and different ways of handling work that used to be manual. That is where a new technology training tax credit analysis can be useful.
Georgia’s Department of Revenue describes the credit as available for employers with approved employee retraining, subject to statutory limits. The credit may be used against up to 50% of the taxpayer’s total state income tax liability for the year.
The basic credit mechanics are straightforward. Georgia businesses can receive a credit equal to 50% of direct retraining expenses, capped at $500 per full time employee, per approved retraining program. The annual maximum credit is $1,250 per employee. Georgia’s economic development materials describe the credit this way, and the Georgia statute also provides the 50% liability limitation and five-year carryforward treatment for unused credits generated on or after January 1, 2025 .
For practical purposes, the retraining tax credit eligibility generally starts with four questions.
First, is the employer a Georgia business with Georgia income tax liability? The credit is designed to offset Georgia income tax, so the business must have the right filing and liability profile.
Second, are the employees eligible? Employees generally should be Georgia residents, current full-time employees (defined as a minimum of 25 hours per week), continuously employed for at least 16 weeks, and first line employees or immediate supervisors. Those details should be confirmed against the company’s employee records before a claim is prepared.
Third, does the training relate to qualifying retraining rather than ordinary employee development? Training tied to newly installed equipment, newly implemented technology or newly implemented software is much more relevant than general management training, routine professional development, soft skills training or continuing education.
Fourth, has the program been approved and documented? The Technical College System of Georgia provides registration, approval application and completion form resources for the program, and notes that Economic Development staff coordinate with applicants after registration.
A simple way to think about it is this: the credit is not a reward for having training. It is a credit for qualifying retraining connected to a business change.
AI related training may support an AI employee training tax credit assessment when it is part of a qualifying implementation of new technology, new software or new systems. The analysis should focus less on the phrase “AI” and more on what changed inside the business.
For example, a company that gives employees a general seminar on AI trends may have interesting training, but not necessarily qualifying retraining. The training may be too broad, too general or too disconnected from a specific implementation.
By contrast, consider a finance department that implements a new reporting platform with AI assisted variance analysis. Employees must learn how to use the new system, interpret exception reports, validate automated outputs and change the monthly close process. That type of training has a clearer connection to newly implemented software and changed job procedures.
A healthcare group might implement AI supported scheduling tools that predict appointment gaps, route reminders and flag capacity issues. Front desk staff and supervisors may need retraining on the new scheduling workflow. If the training is tied to the new technology and properly documented, it may be worth evaluating.
A warehouse or logistics company might introduce AI assisted demand forecasting or inventory replenishment tools. Employees may need to learn new dashboards, exception handling, scanning procedures and approval steps. Again, the question is not whether the tool is impressive. The question is whether the training is tied to the new system and meets Georgia’s program requirements.
Examples that are generally not eligible for the Georgia Retraining Tax Credit include routine software refresher courses, general productivity training, common office software instruction, certification testing, soft skills development, and cross-training on existing technologies. Training focused on widely used office applications or basic workplace skills is typically not considered qualifying retraining for the credit.
This is where State and Local Tax Services can help separate promising opportunities from training that looks good operationally but may not support a defensible credit.
The documentation burden is often where promising credits either hold together or fall apart. A company might have legitimate retraining activity, but if the records do not connect the training to the implementation, the credit position can become difficult to defend.
Businesses should be prepared to document several things.
First, document the business change. What new equipment, technology, software, module or functionality was implemented? When did it go live? Which employees or departments were affected? What process changed?
Second, document the training program. Keep agendas, training materials, instructor information, slide decks, manuals, sign in sheets, attendance records and completion records. If the training was conducted internally, document who provided the instruction and what content was covered.
Third, document employee eligibility. The company should be able to support that claimed employees were current full-time (min 25 hours per week) employees, Georgia residents and otherwise eligible based on the program requirements.
Fourth, document costs. Qualified costs may include employee wages during retraining, instructor wages, training materials, program development costs, instructional media, equipment used solely for retraining and reasonable travel costs for off-site retraining. Costs that do not qualify should be separated early so they do not contaminate the analysis.
Fifth, document approval and completion. TCSG provides the approval application and completion form process, and the Georgia Department of Revenue provides Form IT-RC for claiming the credit.
Internal coordination matters because the necessary information rarely sits in one department. Operations may know what changed. IT may know what system was implemented. HR may know who attended. Payroll may have wage data. Finance may know the tax liability limitation. Tax may understand the credit mechanics.
When those groups do not coordinate, the company risks chasing the credit after memories have faded and training records have scattered. It is a little like trying to build a receipt file from a conference tote bag six months later. Something important is probably in there, but nobody wants to be the person digging for it.
The retraining credit should not be reviewed in isolation. It is one part of a broader Georgia incentives landscape that may include job credits, investment credits, research credits and industry specific opportunities. Georgia’s Department of Revenue maintains separate guidance for credits such as the research tax credit, which has its own calculation, limitations and requirements.
That broader view matters because a company’s operational changes may create several incentive questions at once. A business adding new technology may also be expanding headcount, investing in equipment, entering new counties, changing apportionment factors or making research related investments.
For start-ups and growth companies, Tax Credits for Start-Ups can be especially important because early decisions about hiring, technology, training and location may affect future tax planning. The retraining credit may not be the largest available benefit in every case, but it can be a meaningful piece of the overall picture.
Established companies should take the same holistic approach. A mature business may have repeated rounds of software implementations, automation projects and equipment upgrades across several departments. Individually, each training program may seem modest. Together, they can represent a recurring opportunity that deserves a process rather than a one-time scramble.
A broad review can also help identify State and Local Tax Issues before they become expensive. Credits, nexus, apportionment, sales and use-tax, local incentives and compliance obligations often move together when a company changes how and where it operates.
Companies evaluating whether AI and new technology training may qualify should start with the operational facts.
• Inventory recent and planned technology changes. Include AI tools, automation platforms, ERP modules, CRM systems, dashboards, workflow tools, equipment software and industry specific systems.
• Identify affected employee groups. Focus on existing employees who had to learn new tools, processes or responsibilities because of the implementation.
• Gather training records early. Collect agendas, dates, attendance lists, employee roles, wage data, instructor costs, materials and system implementation records.
• Separate qualifying retraining from general development. Do not assume every training session qualifies. Routine management training, soft skills, continuing education and common office software training should be reviewed carefully.
• Coordinate before filing. Tax, finance, HR, operations and IT should align before the credit is calculated and claimed.
• Review approval requirements. The program should be evaluated through the TCSG process before the company relies on the credit. TCSG’s retraining credit page includes registration, approval and completion resources.
• Model the credit limitation. The credit may offset up to 50% of Georgia income tax liability, and unused credits may be carried forward for five years under Georgia law.
• Review credits holistically. The retraining credit should be considered alongside other Georgia business tax credits, especially when technology investment, hiring or expansion are happening at the same time.
No. The credit is not limited to technology companies. It may apply to Georgia businesses in many industries when existing employees are retrained because of qualifying new equipment, technology or software implementations, subject to approval, documentation and Georgia income tax limitations.
Software retraining is usually tied to a new system, module, feature or workflow employees must learn to perform their jobs. General development is broader, such as leadership training, soft skills, routine refreshers or professional education not tied to qualifying technology implementation.
Yes, internal upgrades can support an assessment when they change employee job processes and require qualifying retraining. Examples may include ERP modules, CRM automation, reporting platforms or operational systems. Routine updates, common office software and general productivity training require closer review.
Tax, finance, HR, operations, payroll and IT should usually be involved. Operations and IT know what changed, HR and payroll can support employee and wage records, and tax and finance can evaluate eligibility, documentation, credit limits and filing requirements.
Technology projects often overlap with hiring, equipment investment, process changes and expansion. Reviewing credits together helps businesses identify available incentives, avoid duplicate or unsupported claims, and build a more complete Georgia tax planning strategy rather than treating each credit separately.
For more than four decades, Bennett Thrasher has provided businesses and individuals with strategic business guidance and solutions through professional tax, audit, advisory, and business process outsourcing services. Contact Stephen Bradshaw, partner in charge of Bennett Thrasher’s State and Local Tax (SALT) practice, or call us at 770.396.2200.
Back to insights
Never miss an update. Sign up to receive our monthly newsletter to unlock our experts' insights.
Subscribe Now