HB136: HB136 Income tax; contributions to foster child support organizations; expand tax credit

Georgia currently offers a tax credit for child and dependent care expenses and a separate credit for donations to organizations that support foster children aging out of care. This bill increases the dependent care credit to 50 percent of the federal credit amount, and creates two new credits starting in the 2026 tax year: a $250 credit for taxpayers with a qualifying child under age six, and a credit of $500 to $1,000 per child for employers who pay at least $1,000 per year toward an employee's child care costs (capped at $20 million total per year, and set to expire at the end of 2030). The bill also expands the existing foster child support organization tax credit (O.C.G.A. § 48-7-29.24), raising the total credit cap to $30 million a year starting in 2026, broadening which organizations and services (including help for 'justice involved youth') qualify, and updating reporting, certification, and confidentiality rules. Most provisions take effect July 1, 2025, and apply to tax years starting January 1, 2026, except the dependent care credit change, which applies starting tax year 2025.

• Raises the existing child and dependent care tax credit (O.C.G.A. § 48-7-29.10) to 50 percent of the federal Section 21 credit amount, starting with the 2025 tax year.
• Creates a new $250 per child tax credit for taxpayers with a qualifying child under age six, starting with the 2026 tax year.
• Creates a new employer tax credit of $500 to $1,000 per child for businesses that pay at least $1,000 per year toward an employee's child care costs, capped at $20 million statewide per year and repealed after 2030.
• Raises the annual cap on the foster child support organization tax credit from $20 million to $30 million starting in 2026, with up to $10 million reserved for insurance company (business enterprise) contributions.
• Expands which organizations and services qualify for the foster child support credit, including support for 'justice involved youth' aged 18 to 25 who were in juvenile justice custody.
• Increases mentor compensation limits (from $500 to $1,200 per year) and monthly cash payment limits (from $150 to $200) for foster children and justice involved youth under the program.

Parents and guardians with young children, taxpayers who pay for child and dependent care, employers who help cover employee child care costs, insurance companies that owe premium tax, nonprofit organizations that support foster children or justice involved youth, and the Georgia Department of Human Services and Department of Revenue, which administer and certify the programs.

Georgia families could see lower tax bills for child care and young children, employers gain a financial incentive to help pay employee child care costs, and more nonprofits and services (including for young adults leaving the juvenile justice system) could receive tax-credited donations, changing how these programs are funded and who benefits.

• Section 1-1 rewrites O.C.G.A. § 48-7-29.10 so the dependent care credit equals 50 percent of the federal credit, rather than a smaller fixed percentage.
• Section 1-2 adds new Code Section 48-7-29.27, creating a $250 per qualifying child (under age six) credit for tax years starting in 2026.
• Section 1-3 adds new Code Section 48-7-29.28, creating an employer child care payment credit worth $500 or $1,000 per child, capped at $20 million annually and repealed December 31, 2030.
• Section 2-1 revises O.C.G.A. § 48-7-29.24 to raise the foster child support organization credit cap to $30 million per year (with a $10 million set-aside for business enterprises) starting in 2026, and expands eligible organizations, services, and reporting rules.
• Section 2-1 raises mentor pay limits from $500 to $1,200 per year and monthly direct cash payments from $150 to $200 for aging foster children and justice involved youth.
• Section 2-2 amends O.C.G.A. § 48-7-60 to let the Commissioner share confidential tax information with other state agencies for tax credit administration purposes.
• Section 3-1 sets the general effective date as July 1, 2025, applicable to tax years starting January 1, 2026, except the dependent care credit change, which applies starting tax year 2025.

1. 2025-05-13Effective Date 2025-07-01
2. 2025-05-13Act 182
3. 2025-05-13House Date Signed by Governor (House)
4. 2025-04-10House Sent to Governor (House)
5. 2025-04-04Senate Agreed House Amend or Sub (Senate)
6. 2025-04-02House Agreed Senate Amend or Sub As Amended (House)
7. 2025-03-28Senate Passed/Adopted By Substitute (Senate)
8. 2025-03-28Senate Third Read (Senate)

• Mark Newton (R, HD-127)Primary sponsor
• Shaw Blackmon (R, HD-146)
• Trey Rhodes (R, HD-124)
• Brent Cox (R, HD-028)
• Brian Prince (D, HD-132)
• Sheila Jones (D, HD-060)
• Brian Strickland (R, SD-042)

1. PassedHouse voteFebruary 24, 2025

   170 yea, 2 nay (2 not voting, 6 absent)

   Passage: House Vote #75

2. PassedSenate voteMarch 28, 2025

   31 yea, 21 nay (2 not voting, 2 absent)

   Motion To Engross: Senate Vote #314

3. PassedSenate voteMarch 28, 2025

   50 yea, 0 nay (2 not voting, 4 absent)

   Passage By Substitute: Senate Vote #320

4. PassedHouse voteApril 2, 2025

   163 yea, 4 nay (2 not voting, 11 absent)

   Agree To Senate Sub As Am: House Vote #397

5. PassedSenate voteApril 4, 2025

   54 yea, 0 nay (0 not voting, 2 absent)

   Agree To House Amendment To Senate Substitute: Senate Vote #449

• income tax credits
• child care
• foster care
• families and children
• tax policy