HB99: HB99 Income tax; credit based upon the federal qualified child and dependent care tax credit; revise

Georgia already offers a state income tax credit tied to the federal qualified child and dependent care tax credit, which helps offset costs like day care or after-school care so parents can work. Under current law, the state credit equals 30 percent of whatever federal credit a taxpayer claims, and if the credit is bigger than the taxes owed, the extra amount is simply lost. This bill rewrites that formula. For tax years starting on or after January 1, 2025, the state credit would jump to 100 percent of the federal credit amount. It also adds a new rule so that if the credit exceeds a taxpayer's state income tax bill, the state would refund the difference instead of letting it go unused. The change would take effect July 1, 2025, and apply to taxable years beginning on or after January 1, 2025.

• Increases the state child and dependent care tax credit from 30 percent to 100 percent of the federal credit amount, starting with the 2025 tax year.
• Adds a new provision allowing taxpayers to receive a refund if the credit is larger than their Georgia income tax liability, instead of losing the excess.
• Keeps the existing rule that the credit cannot be carried forward to future tax years or applied to past years' taxes, except for the new refund allowance.
• Directs the state revenue commissioner to create rules needed to administer the updated credit.
• Sets the law to take effect July 1, 2025, and apply to tax years beginning on or after January 1, 2025.

Georgia taxpayers who claim the federal qualified child and dependent care tax credit for costs like day care, after-school programs, or care for a dependent, and the Georgia Department of Revenue, which administers the credit and would need to issue refunds for excess amounts.

Parents and caregivers who pay for child or dependent care could see a much larger state tax credit, and for the first time could get money back if the credit exceeds what they owe, rather than forfeiting the unused portion as under current law.

• Section 1 revises O.C.G.A. § 48-7-29.10 to set the credit percentage at 100 percent of the federal credit for taxable years beginning on or after January 1, 2025, up from 30 percent previously.
• Section 1 adds subsection (b.1), creating a refund for any credit amount that exceeds the taxpayer's income tax liability, starting in tax year 2025.
• Section 1 keeps subsection (b)'s existing bar on carrying unused credit forward to future years or applying it to past years' taxes.
• Section 1 retains the commissioner's authority to issue rules and regulations to implement the credit.
• Section 2 sets the effective date as July 1, 2025, applying 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)

• Carolyn Hugley (D, HD-141)Primary sponsor
• Karen Bennett (D, HD-094)
• Debbie Buckner (D, HD-137)
• Tangie Herring (D, HD-145)
• Jasmine Clark (D, HD-108)
• Mary Williams (D, HD-037)

• income tax credits
• child care costs
• dependent care
• tax refunds
• Georgia tax law