Tennessee Standard Job Tax Credit
Tennessee Department of Revenue / Tennessee Department of Economic and Community Development (TNECD)
$4,500/job (Tier 4: $22,500)
Tennessee's per-job F&E tax credit
Tennessee's per-job franchise and excise (F&E) tax credit system — available in Standard and Enhanced tiers based on county designation. Standard tier: requires 25 net new full-time jobs and $500,000 investment; credit is $4,500 per qualifying job (one-time credit year); offsets up to 50% of annual F&E liability; 25-year carryforward. Enhanced Tier 4 (most economically distressed counties): requires only 10 net new jobs and $500,000 investment; credit is $4,500 per qualifying job PER YEAR for 5 consecutive years (total $22,500 per qualifying job over 5 years); offsets up to 100% of annual F&E liability. Tier 3 requires 20 jobs at 100% offset. County tier designations change annually — verify with TNECD.
- Funding type
- Tax Credit
- Level
- State
- Amount
- Standard tier: credit of $4,500 per net new full-time position (one-time credit, applied in the year qualifying jobs are verified). Offsets up to 50% of combined TN F&E tax liability. Minimum: 25 jobs + $500K investment within 36 months. A company creating 100 qualifying jobs earns $450,000 in credits. Enhanced Tier 4 (distressed counties): same $4,500 per job BUT earned for 5 consecutive years — total $22,500 per qualifying job over 5 years. Offsets up to 100% of annual F&E liability. Minimum: 10 jobs + $500K investment. Unused credits in either tier carry forward up to 25 years.
- Realistic amount
- Standard tier: 50-job expansion earns $225,000 in credits; 100-job expansion earns $450,000 (50% F&E cap applies). Enhan…
- Deadline
- Rolling — credit is claimed on the annual Tennessee franchise and excise tax return after jobs are verified. No pre-approval application cycle.
- Status
- active
- States
- TN
- Payment model
- tax offset
Who qualifies
- Standard tier: create at least 25 net new full-time positions (37.5+ hours/week with health coverage) within any 36-month period + $500,000 investment; credit offsets up to 50% of F&E liability
- Enhanced Tier 4 (most distressed counties): create at least 10 net new qualifying full-time positions within 36 months + $500,000 investment; credit offsets up to 100% of F&E liability for 5 consecutive credit years
- Enhanced Tier 3: 20+ jobs, 100% offset; Enhanced Tier 2: 25+ jobs, 100% offset — county designation verified with TNECD annually
- Positions must be maintained for 12 consecutive months to qualify in that credit year
- Jobs must be at or above the county average wage
- Business must be subject to Tennessee franchise and excise tax (C-corps, S-corps, partnerships, LLCs with Tennessee nexus)
- TNECD certification of the project and job counts required before credit is claimed on the tax return
- Tier 4 county designation must be verified annually — tiers can change
Hard requirements
- Must be incorporated
- Minimum project size: $500,000
What it covers
Eligible expenses
- Credit offsets Tennessee franchise and excise tax — no restriction on underlying business activities
- Qualifying new full-time jobs (37.5+ hours/week with health coverage) are the basis for credit calculation
- Capital investment of $500,000+ in qualified Tennessee business assets (equipment, machinery, real property)
Ineligible expenses
- Part-time positions (fewer than 37.5 hours/week) do not count as qualifying jobs
- Temporary or seasonal employment does not qualify
- Jobs transferred from another Tennessee location do not count as net new
- Credit cannot offset Tennessee sales tax or personal income tax
- Credit is non-refundable (excess credits carry forward, no cash refund)
- Businesses not subject to Tennessee F&E tax (e.g., pass-throughs not taxed at entity level in TN) cannot use the credit
How to apply
-
1
Notify TNECD of the planned expansion
Contact the Tennessee Department of Economic and Community Development (TNECD) before or early in the expansion. TNECD certifies the project and tracks the 36-month job creation window. Early engagement also allows evaluation for Enhanced tiers (county-dependent).
~3 hrs
-
2
Create qualifying jobs and maintain for 12 months
Hire net new full-time Tennessee employees (37.5+ hours/week) offering health benefits. Maintain positions for 12 consecutive months. Document new hire dates, wages, and hours.
~3 hrs
-
3
Complete minimum capital investment
Invest at least $500,000 in qualified business assets in Tennessee (machinery, equipment, facility improvements, real property). Retain documentation of investment.
~3 hrs
-
4
Obtain TNECD certification
TNECD verifies qualifying job counts and wages and issues a certificate confirming credit eligibility. This certification is required before claiming on the tax return.
~3 hrs
-
5
Claim credit on TN franchise and excise tax return
File the Tennessee franchise and excise tax return with the credit applied (up to 50% of F&E liability). Unused credits carry forward up to 25 years and can be claimed in future years.
~3 hrs
Tier 4 dramatically changes the math: instead of a one-time $4,500/job credit, you earn $4,500/job/year for 5 years = $22,500 total per qualifying job, applied against 100% of F&E (not just 50%). Check the TNECD county tier map before finalizing site selection — one county over can double your credit value and halve the job minimum.
Deadline & timing
No competitive application — the credit is an entitlement for businesses meeting the statutory thresholds. Qualifying jobs must be created within a 36-month window. Credit is claimed on TN DOR Schedule F&E (or equivalent) when the return is filed. TNECD certification of the project is required before claiming.
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Last reviewed 2026. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.