Georgia Research and Development Tax Credit Summary

The R&D Tax Credit is a valuable benefit for companies developing new products and services in Georgia. The R&D Tax Credit is available to any company that increases its qualified research spending. New companies, start-ups, existing and established companies embarking on R&D for the first time or expanding their R&D budget are all eligible for the R&D Tax Credit. Below are the R&D Tax Credit details for the state of Georgia:

  • Qualified Research Expenses (QREs) have the same meaning as in IRC § 41, except that such expenses must be for research conducted within Georgia.
  • The credit is equal to 10 percent of the excess of the QREs over the base amount.
  • The credit can be used to offset up to 50 percent of net Georgia income tax liability, after all other credits have been applied.
  • Excess R&D Tax Credit can be used against state payroll withholding.
  • Any unused R&D Tax Credit can be carried forward for up to 10 years.
  • To claim the credit, a company must submit Form IT-RD and Federal Form 6765 with its Georgia income tax return for each tax year in which the QREs were incurred.

Georgia R&D Tax Credit Case Study
An Atlanta company designs and develops industrial components for the oil and gas industry. The company claims R&D Tax Credits each year for the development activities of its engineers. This project involved a multi-year study.

The Company qualified for federal R&D Tax Credits of $219,917 and an additional $145,750 of state R&D Tax Credit in Georgia.

Year
Total QREs
FEDERAL
Credit
Total QREs Total Georgia
Gross Receipts
GEORGIA
Credit
Year 4 $ 800,000 $ 72,917 $ 800,000 $ 600,000 $ 62,000
Year 3 650,000 57,750 650,000 500,000 43,750
Year 2 575,000 51,917 575,000 400,000 27,500
Year 1 450,000 37,333 450,000 250,000 12,500
Total $2,475,000 $219,917 $2,475,000 $1,750,000 $145,750