HB98: HB98 Income tax; credit equal to 10 percent of the federal child tax credit; provide

Georgia does not currently offer a state-level version of the federal child tax credit. This bill would add a new section to Georgia's income tax law (O.C.G.A. Chapter 7 of Title 48) creating a state income tax credit worth 10 percent of whatever federal child tax credit a taxpayer qualifies for under Section 24 of the Internal Revenue Code. The credit would only apply if the taxpayer would have received the federal credit after accounting for any net operating loss carryforward used in figuring federal eligibility. If the state credit is worth more than the taxpayer owes in Georgia income tax, the leftover amount would be paid back to the taxpayer as a refund. The Georgia Department of Revenue commissioner would be allowed to write rules to carry out the credit. The law 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 10 percent of a taxpayer's federal child tax credit under Section 24 of the Internal Revenue Code.
• Makes the credit refundable, meaning any amount exceeding a taxpayer's state income tax liability would be paid back to them.
• Limits eligibility to taxpayers who would have actually qualified for the federal credit, including after factoring in net operating loss carryforwards used in that federal calculation.
• Authorizes the state revenue commissioner to create rules and regulations to implement and administer the new credit.
• Sets the effective date as July 1, 2025, applying to tax years beginning on or after January 1, 2025.

Georgia taxpayers who claim the federal child tax credit for their dependent children, particularly parents and guardians filing state income tax returns, as well as the Georgia Department of Revenue, which would administer the new credit.

Families who qualify for the federal child tax credit would see a smaller state tax bill or a refund check, since the credit pays back any amount beyond what they owe. This could modestly increase after-tax income for parents raising children in Georgia.

• Section 1 adds new Code Section 48-7-29.27, creating a state credit equal to 10 percent of the taxpayer's federal child tax credit under Internal Revenue Code Section 24.
• Subsection (a) ties eligibility to whether the taxpayer would have received the federal credit, including after adjusting for certain net operating loss carryforwards.
• Subsection (b) makes the credit refundable, so any excess over the taxpayer's income tax liability is refunded rather than lost.
• Subsection (c) gives the commissioner authority to issue rules and regulations to implement the credit.
• Section 2 sets the effective date at July 1, 2025, applying to taxable years beginning on or after January 1, 2025.

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

• income tax
• child tax credit
• tax credits
• family tax relief
• Georgia Department of Revenue