How To Determine if Your Company Is Eligible for State Credits and Incentives
April 22, 2024
What Are State Credits and Incentives?
State governments offer state credits and incentive programs to advance economic growth and investments in their state. These tax credits allow businesses to lessen their tax obligations, improve cash flow, and make investments for growth to foster long-term success.
Missed Opportunities
Taking advantage of state tax credits and incentives is an opportunity many businesses miss due to the lack of knowledge about what makes an organization eligible to receive state credits and incentives. A few factors that contribute to eligibility include paying state taxes in the past or future, investing in a single location and investing in clean energy solutions. Other reasons that could make your business eligible to receive state credits and incentives are making changes to certain business operations such as real estate or management structure.
Do I Qualify for State Credits and Incentives?
It is important to investigate if your company qualifies for state tax credits because the government implemented these with an abundance of incentives to motivate taxpayers to apply. For businesses, the two main benefits of receiving state credits are to reduce upfront and ongoing expenses.
Since the timeframe companies to claim a majority of state credits and incentives is limited, it is crucial to partner with a tax professional to learn if your company qualifies and when you should submit an application.
To help determine if you qualify, review the questions below. If you answer “yes” to any of these questions, you may be eligible for state credits and incentives:
- Have you paid taxes in the past three years or expect to pay taxes over the next two years?
- Are you investing $5 million or adding at least 25 employees at a single location?
- Have there been or are you planning on any changes to your owned or leased real estate?
- Have there been or are you planning on any changes to your human resources or management?
- Are any planned major business events (i.e., mergers and acquisitions (M&A), corporate restructuring or inbound investments) occurring?
- Are you currently under Internal Revenue Services (IRS) or state audits?
- Do you have any renewable or alternative energy projects currently in process or planned for the future?
- Are you planning to expand, relocate or consolidate your current operations?
Your Guide Forward
If any of the above points apply to your company’s financial situation, reach out to Cherry Bekaert’s State Credits & Incentives team. Our trusted professionals are dedicated to helping secure money through state tax credits and incentive programs at no cost to you. We have the necessary software tools to determine if an address is located within a designated area or zone where a state credit and incentive is available, and we have a team knowledgeable about credits and business taxation.