Webinar reviews Pa. tax credit programs | News, Sports, Jobs

LEWISTOWN — The various tax credit programs available in Pennsylvania to support businesses in many industries were the topic of a webinar held Tuesday morning. An information session provided by the Innovative Manufacturers Center (IMC) reviewed various options for early-stage companies or established businesses. GIRL Resources Chief Operating Officer Lindsey Bennett was the webinar speaker. KIZ is a tax consulting firm located in Blair County.

Transferable tax credits reviewed included the Keystone Innovation District, Research and Development, Neighborhood Assistance/Enterprise District, PA Historic Preservation Credits, Business Opportunity Tax Credit, and Educational Development Tax Credit.

Tax credits for businesses help local economic development but are not the same as tax deductions.

“Once you receive the tax credit, you must report how you used the credit on your tax return.” Bennett said.

The Keystone Innovation Zone program was established to create designated geographic areas to foster innovation and create entrepreneurial opportunities. There are 28 counties in Pennsylvania, each with an appointed local coordinator. Information is available at https://dced.pa.gov/business-assistance/kiz-coordinator-locations/. Although some regions specialize in certain industries, universal regions include advanced/diversified manufacturing, energy, life/biological sciences, and robotics and technology.

Businesses can apply for assistance online through the Pennsylvania Department of Community and Economic Development (DCED) electronic single application.

Research and Development qualifications include new technology as well as incremental improvements to a product or process. It should involve financial risk, be based on precise science and a qualified purpose, and involve uncertainty and testing at the beginning or during the project.

For R&D credits, businesses apply through MyPATH https://mypath.pa.gov/_/ by December 1.

Neighborhood Assistance projects include affordable housing, job training, crime prevention and other community services. The second chance application period will last until October 25. Enterprise zones are awarded to businesses that fund projects to solve a problem in a designated distressed area of ​​the state. The project must result in job creation or retention of a full-time equivalent.

PA Historic Preservation Credits are modeled after the Federal Historic Preservation Tax Incentives program. The building must be located in a historical district and be a building that contributes to this district. Projects must follow the Department of the Interior’s historic rehabilitation standards.

There are federal programs including the Work Opportunity Tax Credit and the Federal Energy Investment Tax Credit. The WOTC includes a credit of up to $9,600 for employers who hire qualified veterans and other targeted groups.

Fundraising and preservation as well as credits provided through educational improvements were also discussed during the webinar.

Pennsylvania’s Transferable Tax Credits

Keystone Innovation Zone (KIZ) – Non-profit KIZ companies that operate in a targeted industry within a zone, have been in business for less than 8 years, and have created their own intellectual property receive credits based on their gross revenue growth. KIZ loans are limited to $100,000/year/company. Application: December 1 Buying: May 1 Selling: After tax return is completed.

Research and Development (R&D) – Companies receive 10% of the increase in R&D spending from the average spending of the previous 4 years. Smaller companies are eligible for a 20% credit. Application: December 1 Buying: May 1 Selling: After tax return is completed.

Film – Production companies get back 25% of in-state expenses as a tax credit for all national film, TV or commercial production. Application: Before production expenses Purchased: When the film is completed Sold: After filing the tax return.

Video Game Production Tax Credit (VGPTC) – Production companies get back 25% of in-state spending as a tax credit for all video games. Apply: Before production expenses Buy: At the end of the game Sell: After filling out the tax return.

Education – Education donors receive 75-90% of donations to preschool and K-12 scholarships and Education Development Organizations as tax credits, up to $750,000 per taxpayer/year. A new program for Public Schools, the Opportunity Scholarship Program, is also now available. Application: May 15 or July 1 Recruitment: Notification in September and donation by the end of the year.

Enterprise Zone – Businesses in Enterprise Zones receive a tax credit of 25% of building renovation fees up to $500,000 per project. Apply: Before fiscal year expenditures Sell: After expenditure is approved through audit.

Neighborhood Assistance – Nonprofits apply for credit allocations to provide 65-95% tax credits to qualified donors. Apply: Before fiscal year expenditure Sell: One year from the date of investment.

Resource Development and Conservation (REAP) – Farmers receive 50-75% of expenses as a tax credit for no-till equipment and nitrogen reduction planning costs. Each organization can receive up to a total of $250,000 in REAP Credits. Application: From August of each year. Sale: One year after the issuance of the loan document.

Pennsylvania Historic Preservation Tax Credit – Get 25% of improvements to buildings listed on the Historic Register, up to $500,000. A 20% Federal loan is also available. Application: October 1 Sale: Once the expenditure is approved through audit.