How to gain tax credits for training investments

T+D, Feb, 2003 by Jack Miller

Most U.S. states and the federal government have laws, or are crafting laws, that allow companies to receive tax credits totaling up to half of their investment in approved training programs. Here's how to take advantage of those laws and maximize your tax credits.

Have your financial advisor research training credit regulations for your state and classification. Many states offer a retraining tax credit of up to US$500 per training program for each employee after the first 16 weeks of employment.

Outsource your tax preparation. Your company can maximize return-on-investment by outsourcing the initial analysis and ongoing management of your tax-credit program. Tax credits and other incentives typically generate 180 percent return on time invested.

Don't forget your recent history. Training tax credits can be recovered for the past three years. If your company didn't seek credits for the 1999 tax year, for example, you can receive the credits this year if you provide documentation.

Plan for the future. Training tax credits can be carried forward over 10 years. In Georgia, for example, if a company receives $100,000 in credits, then it can use all of them in the current year or spread them out over a decade.

Used comprehensively, tax credits can be an important tool in helping companies build effective training programs and accelerate growth.

Jack Miller is COO of Learn.net and a former certified public accountant; www.learn.net.