HB 479: Income tax; allow for tax credits in excess of the amount that can be claimed in a given year to be carried forward to subsequent years

Georgia offers several income tax credits for contributions to specific causes, including student scholarship organizations, rural hospital organizations, nonprofit school grant organizations, foster child support organizations, and law enforcement foundations. Each program caps the credit at a percentage (75 percent or 10 percent, depending on the program) of the contributing entity's income tax liability. This bill rewrites five sections of Georgia's tax code (O.C.G.A. §§ 48-7-29.16, 48-7-29.20, 48-7-29.21, 48-7-29.24, and 48-7-29.25) so that the cap is based on the entity's estimated income tax liability, as reported to the Department of Revenue, rather than the corporation's actual liability. It also broadens the language from 'corporation' to 'such entity,' covering other business structures like partnerships or LLCs that pay under this chapter. The changes would take effect July 1, 2025, and apply to tax years beginning on or after January 1, 2026.

• Replaces 'the corporation's income tax liability' with 'such entity's estimated income tax liability' as the basis for calculating the cap on five separate tax credit programs.
• Requires entities to report their estimated income tax liability to the Department of Revenue as part of claiming these credits.
• Broadens each credit provision from applying only to 'corporations' to applying to 'such entity,' extending eligibility language to other business entity types.
• Sets the changes to take effect July 1, 2025, applying to tax years starting on or after January 1, 2026.

Businesses and other entities that claim Georgia income tax credits for donations to student scholarship organizations, rural hospital organizations, nonprofit school grant programs, foster child support organizations, or law enforcement foundations, along with the Georgia Department of Revenue, which administers these credits.

By basing the credit cap on an estimated tax liability reported upfront to the state rather than actual liability determined later, entities and the Department of Revenue would calculate allowable credits differently, which could affect how much businesses can claim and how the department verifies those claims.

• Section 1 revises O.C.G.A. § 48-7-29.16 (student scholarship organization credits) to base the 75 percent cap on 'such entity's estimated income tax liability' reported to the department.
• Section 2 makes the same change to O.C.G.A. § 48-7-29.20 for rural hospital organization credits.
• Section 3 makes the same change to O.C.G.A. § 48-7-29.21 for donations to nonprofits that award grants to public schools.
• Section 4 revises O.C.G.A. § 48-7-29.24 to apply the 10 percent cap for foster child support organization credits to an entity's estimated liability reported to the department.
• Section 5 revises O.C.G.A. § 48-7-29.25 to apply the same estimated-liability standard to law enforcement foundation credits.
• Section 6 sets the effective date as July 1, 2025, applicable to tax years beginning on or after January 1, 2026.

1. 2025-02-20House Second Readers (House)
2. 2025-02-19House First Readers (House)
3. 2025-02-18House Hopper (House)

• John Carson (R, HD-046)Primary sponsor
• Matt Dubnik (R, HD-029)
• Trey Kelley (R, HD-016)
• Kasey Carpenter (R, HD-004)
• Clint Crowe (R, HD-118)
• Ginny Ehrhart (R, HD-036)

• income tax credits
• student scholarship organizations
• rural hospitals
• law enforcement funding
• foster care