Georgia PPE Manufacturing Tax Credit

The COVID-19 pandemic has had a significant impact on businesses in Atlanta and across Georgia. From the initial forced business closures to new operating guidelines many have had to be flexible and creative to maintain profitability. These rules have not only impacted how businesses serve customers, but also how a safe workplace is developed and maintained. A central theme that is woven into the regulations is a concern for the health and safety of all those involved. To facilitate this personal protective equipment (PPE) which includes facemasks, face shields, eye protection, and gloves have used. As demand for these items has sharply increased, more businesses are shifting operations to focus on the production of PPE. The good news for companies that have made the transition is that Georgia now offers a PPE Manufacturing Tax Credit. Included as part of Georgia House Bill 846, businesses can now receive a $1,250 tax credit for qualifying new production jobs. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.

PPE Manufacturing Tax Credit Summary

Under the new regulations, any PPE manufacturer qualified to claim a job tax credit can also receive an additional credit of $1,250 per employee. Only jobs that are directly related to the production of PPE or hand sanitizer may qualify. If a facility stops production of these items, or if certain jobs are no longer involved in the production, then a business can no longer claim the credit. This means that eligibility extends to the positions exclusively focused on the production of qualifying items. It is important to note that retailers that sell PPE cannot claim the credit.

Eligible Products

As mentioned above, the credit applies to the production of qualifying PPE and hand sanitizer. House Bill 846 provides specific definitions of each, including:

• Hand Sanitizer – This is defined as any hand antiseptic, hand rub, or agent applied to the hands for the purpose of removing common pathogens including, but not limited to, hand cleaners and sanitizers.
• PPE – This includes any protective clothing, helmets, gloves, face shields, goggles, facemasks, hand sanitizers, and respirators designed to protect the wearers from injury or to prevent the spread of infection, diseases, virus, or other illness.

Other Important Details

The credit is effective starting on January 1, 2020, and expires on December 31, 2024. There is a 10-year carryforward period for those who claim the credit but can not use it in the current tax year. When claiming the credit, the business is required to provide information on the number of jobs qualified to claim the credit, verification the business is manufacturing PPE including a description of qualifying activities, the amount (if any) of tax credit carried over from prior years, amount of credit utilized in the current year, and the amount of the credit to be carried over into the future.

Contact Us

It is estimated that over 250 Georgia manufacturing companies have started producing PPE since the beginning of the pandemic. For those considering making a change or adding a new product line, the credit provides a meaningful incentive to do so. If you have questions about the information outlined above or need assistance with a tax or accounting issue, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.