---
title: HB 565. Income tax; increase annual aggregate limit for tax credits available for qualified education donations
collection: bills
id: 2025-2026/hb565
cite_as: HB 565, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb565
md_url: https://georgiacommons.org/bills/2025-2026/hb565.md
text_url: https://georgiacommons.org/bills/2025-2026/hb565/text
source_url: https://www.legis.ga.gov/legislation/70618
date: 2026-02-24
status: introduced
corpus_version: bills-2026-09-13
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
up: https://georgiacommons.org/bills/2025-2026.md
previous: https://georgiacommons.org/bills/2025-2026/hb564.md
next: https://georgiacommons.org/bills/2025-2026/hb566.md
index: https://georgiacommons.org/bills/index.md
omitted: votes and history
omitted_chars: 199
omitted_url: https://georgiacommons.org/bills/2025-2026/hb565.md?full=1
bill_number: HB 565
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2025-02-20
last_action: House Committee Favorably Reported By Substitute
sponsors:
  - Rick Townsend
  - Lehman Franklin
  - Rob Leverett
  - Beth Camp
  - Scott Hilton
text_version: Comm Sub
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB565/2025
upstream_id: 1978315
summaries_model: claude-sonnet-5
topic_tags:
  - income tax credits
  - public school funding
  - education donations
  - state tax policy
---

# HB 565. Income tax; increase annual aggregate limit for tax credits available for qualified education donations

## Text

The House Committee on Ways & Means offers the following substitute to HB 565:
A BILL TO BE ENTITLED
AN ACT
To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated,
relating to income tax imposition, rate, computation, exemptions, and credits, so as to
increase the annual aggregate limit for tax credits available for qualified education donations;
to provide for related matters; to provide for an effective date and applicability; to repeal
conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to
income tax imposition, rate, computation, exemptions, and credits, is amended in Code
Section 48-7-29.21, relating to tax credits for donations to nonprofit corporations awarding
grants to public schools, by revising paragraph (1) of subsection (f) as follows:
"(f)(1) In no event shall the aggregate amount of tax credits allowed under this Code
section exceed: <ins>$25 million per calendar year
</ins> <del>(A) $5 million for the tax year ending on December 31, 2023; or
(B) $15 million for the tax year 2024, and for all subsequent tax years."
</del>
SECTION 2.
This Act shall become effective on July 1, 2026, and shall be applicable to all taxable years
beginning on or after January 1, 2026.
SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.

## Summaries written by Georgia Commons

The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.

A House bill would raise the statewide cap on tax credits for donations to nonprofits that award grants to Georgia public schools from $15 million to $25 million per year, starting with the 2026 tax year.

### Plain-language summary

Georgia law currently allows individuals and businesses to claim income tax credits for donations to certain nonprofit corporations that award grants to public schools, but the total amount of credits allowed statewide each year is capped. Under current law (O.C.G.A. § 48-7-29.21), that cap was $5 million for 2023 and $15 million for 2024 and every year after.
This bill raises that annual statewide cap to $25 million per calendar year. It does not change who can donate, how the credit works, or which nonprofits qualify; it only changes the total dollar ceiling on credits available across all taxpayers each year. The change would take effect July 1, 2026, and would apply to tax years beginning on or after January 1, 2026.

### What it does

- Raises the statewide annual cap on tax credits for donations to qualifying school-grant nonprofits from $15 million to $25 million per calendar year.
- Repeals the old tiered cap structure that set $5 million for 2023 and $15 million for 2024 and later years.
- Sets the new cap to apply to tax years beginning on or after January 1, 2026, with the law taking effect July 1, 2026.

### Who it affects

Georgia taxpayers, both individuals and businesses, who donate to nonprofit corporations that award grants to public schools; the nonprofits themselves, which could receive more donations once the higher credit cap opens up; and the state, which would allow more tax credits to be claimed each year.

### Why it matters

Because the tax credit program is capped, donors currently compete for a limited pool of credits each year. Raising the ceiling to $25 million would let more donations qualify for the credit before the annual limit is reached, potentially increasing total giving to these school-grant nonprofits.

### Key provisions

- Section 1 amends O.C.G.A. § 48-7-29.21(f)(1), replacing the prior two-tier cap ($5 million for 2023, $15 million for 2024 and after) with a flat $25 million per calendar year limit.
- Section 2 sets the effective date as July 1, 2026, and applies the change to tax years starting on or after January 1, 2026.
- Section 3 repeals any conflicting laws.

## Status

- Status: Introduced (2025-02-20)
- Last action: House Committee Favorably Reported By Substitute (2026-02-24)
- Sponsors: Rick Townsend, Lehman Franklin, Rob Leverett, Beth Camp, Scott Hilton
- Official page: https://www.legis.ga.gov/legislation/70618

> The history, votes, and amendments (199 characters) are at https://georgiacommons.org/bills/2025-2026/hb565.md?full=1