Talk of tax credits often focuses exclusively on IRS breaks that lower federal income tax. Lost in these discussions is the value of state credits that can also create meaningful tax savings. Individual states offer a multitude of credits that, if claimed, can significantly lower overall tax liability for individuals and businesses.
Like most state tax credits, the breaks that southeastern states provide vary widely in value and eligibility. While many federal credits are widely applicable, states tend to maintain a narrower focus with credits designed to boost specific industries and support job creation in targeted regions. Here’s a small sample of the credits tax-savvy filers are taking advantage of this year:
Tennessee’s strong business tax policy includes a fast-track infrastructure grants, job training grants and economic development funds to support businesses that relocate to or expand in the state. In addition, TN provides a variety of tax credits for companies that develop any of several types of facilities and create new jobs in the process; qualified facilities include corporate headquarters, manufacturing plants, data centers, call centers, and warehousing and distribution facilities.
If there isn’t a credit that’s right for you on this list, don’t despair. The credits cited here represent only a handful of the many tax credits and incentives available in each state. State tax codes are constantly changing, with new credits added as others sunset. It isn’t always easy to find detailed information about current credits or their expected longevity. However, if you’ll file a tax return in a southeastern state, taking the time to research the state-specific tax credits available to businesses and individuals could pay off handsomely.
For help locating and utilizing state credits to benefit your individual tax picture, turn to the experienced tax professionals at Mauldin & Jenkins.
For more information, please visit our Specialty Tax page.
*This credit may be affected by future IRS actions addressing workarounds to the SALT limitation imposed by the Tax Cuts and Jobs Act.