HB316: HB316 Income tax; credit equal to 20 percent of the federal earned income tax credit; provide

Georgia currently has no state-level version of the federal earned income tax credit (EITC), a tax break aimed at helping lower and moderate income workers, especially those with children. 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 credit equal to 20 percent of whatever federal EITC a taxpayer receives under Section 32 of the federal tax code. The credit could only be claimed if the taxpayer would have qualified for the federal credit even after accounting for certain net operating loss carryforwards. If the new state credit is larger than a taxpayer's Georgia income tax bill, the leftover amount would be lost: it could not be refunded or carried forward to other tax years. The Georgia Department of Revenue would be allowed to write rules to administer the credit. The change would take effect July 1, 2025, and apply to tax years starting on or after January 1, 2025.

• Creates a new Georgia income tax credit (O.C.G.A. § 48-7-29.28) equal to 20 percent of a taxpayer's federal earned income tax credit.
• Limits eligibility to taxpayers who would still qualify for the federal credit after certain net operating loss carryforwards are added back in.
• Makes the credit nonrefundable and non-carryforward, meaning any amount beyond a taxpayer's tax bill is simply forfeited rather than paid out or saved for later.
• Authorizes the state revenue commissioner to create rules and regulations to put the credit into effect.
• 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 workers and families, would be eligible for the new state credit. The Georgia Department of Revenue would also be affected, since it must write rules to administer the program.

Eligible Georgia workers would see a reduction in their state income tax bill tied directly to their federal earned income tax credit amount, putting more money back in the hands of lower and moderate income households, though only up to what they already owe in state tax.

• Section 1 adds new Code Section 48-7-29.28, creating a state income tax credit equal to 20 percent of a taxpayer's federal earned income tax credit under Section 32 of the Internal Revenue Code.
• Subsection (a) ties eligibility to whether the taxpayer would have received the federal credit after adding back certain net operating loss deductions.
• Subsection (b) makes the credit nonrefundable and disallows carrying any excess credit to past or future tax years.
• Subsection (c) gives the state revenue commissioner 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. 2025-02-11House Second Readers (House)
2. 2025-02-10House First Readers (House)
3. 2025-02-06House Hopper (House)

• Samuel Park (D, HD-107)Primary sponsor
• Mack Jackson (D, HD-128)
• Tangie Herring (D, HD-145)
• Floyd Griffin (D, HD-149)
• Patty Stinson (D, HD-150)

• income tax
• earned income tax credit
• tax credits
• state taxes