HB95: HB95 Income tax; credit equal to 20 percent of the federal earned income tax credit; provide

Georgia currently does not offer a state-level version of the federal earned income tax credit, a benefit for lower and moderate income working people. This bill would add a new section to Georgia's tax code (O.C.G.A. § 48-7-29.28) creating a state income tax credit equal to 20 percent of whatever federal earned income tax credit a taxpayer qualifies for under Section 32 of the federal Internal Revenue Code. The credit is refundable, meaning if it is worth more than the taxpayer owes in state income tax, the state would pay out the difference rather than just erasing the tax bill. The Georgia Department of Revenue would be allowed to write rules to administer the credit. The change would take effect July 1, 2025, and would apply to tax years starting on or after January 1, 2025.

• Creates a new Georgia income tax credit equal to 20 percent of a taxpayer's federal earned income tax credit under Section 32 of the Internal Revenue Code.
• Makes the credit refundable, so if it exceeds a taxpayer's state income tax bill, the state refunds the difference.
• Ties eligibility to whether the taxpayer would have qualified for the federal credit, including after accounting for certain net operating loss carryforwards.
• Authorizes the state revenue commissioner to create rules and regulations to implement the credit.
• Sets the effective date as July 1, 2025, applying to tax years beginning on or after January 1, 2025.

Georgia taxpayers who qualify for the federal earned income tax credit, generally lower and moderate income working individuals and families, would benefit directly. The Georgia Department of Revenue would also be affected, since it would administer the new credit and write implementing rules.

Eligible working Georgians could see a larger refund or a lower tax bill each year, since the credit pays out any excess above what they owe. The size of the benefit depends on the federal earned income tax credit amount, which varies by income and number of children.

• Section 1 adds new Code Section 48-7-29.28, creating a state credit equal to 20 percent of the taxpayer's federal earned income tax credit under Internal Revenue Code Section 32.
• Subsection (a) requires that the taxpayer would have received the federal credit even after including certain net operating loss carryforwards in the eligibility calculation.
• Subsection (b) makes the credit refundable, requiring the state to refund any amount that exceeds the taxpayer's income tax liability.
• Subsection (c) authorizes the commissioner to issue rules and regulations to implement and administer the credit.
• Section 2 sets the effective date as July 1, 2025, applicable to taxable years beginning on or after January 1, 2025.
• Section 3 repeals any conflicting laws.

1. 2025-01-28House Second Readers (House)
2. 2025-01-27House First Readers (House)
3. 2025-01-17House Hopper (House)

• Samuel Park (D, HD-107)Primary sponsor
• Mack Jackson (D, HD-128)
• Floyd Griffin (D, HD-149)
• Tangie Herring (D, HD-145)
• Jasmine Clark (D, HD-108)
• Mary Williams (D, HD-037)

• income tax
• earned income tax credit
• tax credits
• working families
• state tax policy