Senate · Introduced · 2025-2026 Regular Session

SB 67: Income Taxes; income tax credit equal to 20 percent of the federal earned income tax credit; provide

Last action February 3, 2025 · Senate Read and Referred

A Georgia Senate bill would create a new state income tax credit equal to 20 percent of the federal earned income tax credit, with any excess amount refunded to the taxpayer.

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In plain language

Georgia currently has no state-level match of the federal earned income tax credit (EITC), a tax break aimed at low- and moderate-income workers. 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 worth 20 percent of whatever federal EITC amount a taxpayer qualifies for under federal tax law (Section 32 of the Internal Revenue Code). Taxpayers could only claim the credit if they would have qualified for the federal credit after accounting for certain net operating loss carryforwards. If the credit is larger than what a taxpayer owes in state income tax, the state would refund the difference rather than just reducing the tax bill to zero. The Georgia Department of Revenue would be authorized to write rules to administer the credit. The law would take effect July 1, 2025, and apply to tax years starting on or after January 1, 2025.

What the bill does

Creates a new Georgia income tax credit equal to 20 percent of a taxpayer's federal earned income tax credit under Section 32 of the Internal Revenue Code.
Limits eligibility to taxpayers who would have qualified for the federal credit even after certain net operating loss carryforwards are added back in.
Makes the credit refundable, meaning taxpayers get the excess amount paid to them if the credit exceeds their state income tax owed.
Authorizes the state revenue commissioner to create rules and regulations to implement the new credit.
Sets the effective date as July 1, 2025, applying to tax years beginning on or after January 1, 2025.

Who it affects

Georgia taxpayers who qualify for the federal earned income tax credit, generally low- to moderate-income working individuals and families, would be able to claim the new state credit. The Georgia Department of Revenue would also be affected, since it must administer and issue refunds under the new provision.

Why it matters

Eligible low- and moderate-income workers in Georgia could receive extra money back at tax time, since the credit is refundable even if it exceeds what they owe in state income tax. This could provide additional take-home income for working families who already qualify for the federal credit.

Key provisions

Section 1 adds new Code Section 48-7-29.28, setting the state credit at 20 percent of the taxpayer's federal earned income tax credit amount.
Subsection (a) ties eligibility to whether the taxpayer would have received the federal credit after adding back certain net operating loss carryforwards.
Subsection (b) makes the credit refundable, requiring the state to refund any amount exceeding the taxpayer's income tax liability.
Subsection (c) gives the commissioner authority to issue rules and regulations to implement the credit.
Section 2 sets the effective date of July 1, 2025, applying to tax years beginning on or after January 1, 2025.

From the bill

“A taxpayer shall be allowed a credit against the tax imposed by Code Section 48-7-20 in an amount equal to 20 percent of the federal credit that such taxpayer is allowed under Section 32 of the Internal Revenue Code.”
This is the core rule establishing the new state tax credit tied to the federal earned income tax credit.

“If the total amount of the tax credit provided for in this Code section exceeds the taxpayer's income tax liability for a taxable year, such excess funds shall be refunded to the taxpayer.”
This makes the credit refundable, so taxpayers get money back even if the credit exceeds what they owe.

Status timeline

2025-02-03Senate Read and Referred (Senate)
2025-01-30Senate Hopper (Senate)

Topics

income taxes
earned income tax credit
tax credits
low-income workers
state budget

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