LEWISTOWN — Various tax credit programs available in Pennsylvania to support businesses across many industries was the topic of a webinar Tuesday morning. The informational session provided by Innovative Manufacturers’ Center (IMC) reviewed several options for early-stage companies or long-established businesses. KIZ Resources Director of Operations Lindsey Bennett was the webinar speaker. KIZ is a tax consultant firm in Blair County.

The transferable tax credits reviewed included Keystone Innovation Zone, Research and Development, Neighborhood Assistance/Enterprise Zone, PA Historic Preservation Credits, Work Opportunity Tax Credit and Educational Improvement Tax Credit.

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

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

The Keystone Innovation Zone program was established to create designated geographic zones to foster innovation and create entrepreneurial opportunities. There are 28 zones in Pennsylvania, each with an assigned local coordinator. Information can be found at https://dced.pa.gov/business-assistance/kiz-coordinator-locations/. Though some zones may specialize in certain industries, universal zones include advanced/diversified manufacturing, energy, life/bio sciences and robotics and technology.

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

Research and Development qualifications include incremental improvements to a product or process as well as new technology. It must include a financial risk, must be based on hard science and a qualified purpose and must have uncertainty and process of experimentation at the start of or during the project.

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

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

PA Historic Preservation Credits is modeled after the Federal Historic Preservation Tax Incentives program. The building must be located in and be a contributing building to a historic district. Projects must follow the secretary of the interior’s standards for historic rehabilitation.

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

Credits through educational improvements along with resource enhancement and protection were also discussed during the webinar.

Pennsylvania’s Transferable Tax Credits

Keystone Innovation Zone (KIZ) – For-profit KIZ companies operating in a targeted industry within a zone, in business less than 8 years, and who have created their own IP, receive credits based on gross revenue increases. KIZ credits are capped at $100,000/year/company. Apply: Dec. 1 Receive: May 1 Sell: After tax return is complete.

Research & Development (R&D) – Companies receive 10% of the increase in spending on R&D from the average spending of the previous 4 years. Smaller companies qualify for a 20% credit. Apply: Dec 1 Receive: May 1 Sell: After tax return is complete.

Film – Production companies receive 25% of in-state spending back as a tax credit for all national movies, TV or commercial film production. Apply: Prior to production spending Receive: At film completion Sell: After filing tax return.

Video Game Production Tax Credit (VGPTC) – Production companies receive 25% of in-state spending back as a tax credit for all video games. Apply: Prior to production spending Receive: At game completion Sell: After filing tax return.

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

Enterprise Zone – Businesses in Enterprise Zones receive 25% of building renovation in tax credits up to $500,000 per project. Apply: Before fiscal year spending Sell: After spending is confirmed through audit.

Neighborhood Assistance – Nonprofit Organizations apply for a credit allocation to grant a 65-95% tax credit to qualified donors. Apply: Before fiscal year spend Sell: One year from date of investment.

Resource Enhancement and Protection (REAP) – Farmers receive 50-75% of spending as a tax credit for no till equipment and nitrogen reduction planning costs. Each entity can receive up to $250,000 in REAP Credits total. Apply: Starting August each year Sell: One year after credit certificate is awarded.

Pennsylvania Historic Preservation Tax Credit – Receive 25% of improvements made to buildings registered on the Historic Registry up to $500,000. A 20% Federal credit is also available. Apply: Oct. 1 Sell: After spending is confirmed through audit.