Accordingly, since 2012 is the first year that most companies can apply excess R&D credits to payroll tax withholding, a taxpayer making the election must file the required form by August 16, 2013.
*Note that for the 2011 tax year, certain newly formed companies were allowed to apply excess R&D credits to payroll withholding.
Effective for tax years beginning on or after January 1, 2012, taxpayers can make an irrevocable election to apply excess Georgia R&D credits to payroll tax withholding.
Specifically, the amount that exceeds 50% of a company’s remaining Georgia net income tax liability after all other credits have been applied can be credited toward the company’s payroll tax withholding.
Form to file, when to file
To receive the payroll tax withholding benefit, taxpayers must file Form IT-WH, Notice of Intention to Claim Withholding Benefit, at least 30 days prior to the due date of the Georgia income tax return (including extensions) or at least 30 days prior to filing of the income tax return, whichever occurs first.
For calendar year taxpayers, the extended 2012 return is due September 16, 2013—thus, Form IT-WH must be filed on or before August 16, 2013.
Within 90-120 days after receiving the company’s income tax return for the relevant tax year, the Georgia Department of Revenue will issue a “confirmation of intention to claim withholding benefit” letter. This letter will specify a date that the company can start offsetting withholding payments with the excess credits.
Because the 2012 tax year is the first year that most companies can apply excess R&D credits to payroll tax withholding, taxpayers need to be aware that they can make this election, or that the form needs to be filed by August 16, 2013.
For more information, contact a KPMG State and Local Tax professional: