HB1135: HB1135 Education; participate in federal tax credit program for contributions of individuals to scholarship granting organizations; provide

Congress created a federal tax credit (under Section 70411 of federal Public Law 119-21) for people who donate to scholarship granting organizations, groups that give private school scholarships. States have to formally opt in for their residents to use it. This bill directs Georgia to participate. The bill designates the state revenue commissioner to notify the U.S. Secretary of the Treasury each year that Georgia is opting in, and to submit a list of Georgia scholarship granting organizations that qualify. That list must be published on the Department of Revenue's website. No state agency may write rules that go beyond or conflict with the federal program's own rules. The bill also reorganizes Georgia's existing student scholarship organization law into a new article structure and updates a related tax credit definition. It would take effect when signed and apply to tax years starting after January 1, 2027.

• Directs the state revenue commissioner to formally notify the U.S. Treasury each year that Georgia elects to participate in the federal scholarship donation tax credit.
• Requires the commissioner to submit and publish online a list of Georgia scholarship granting organizations that qualify for the federal credit.
• Bars any Georgia state agency from adopting rules that expand, limit, or otherwise diverge from the federal program's own requirements.
• Reorganizes existing Georgia student scholarship organization law (O.C.G.A. Chapter 2A of Title 20) into Article 1, adding a new Article 2 for the federal program provisions.
• Updates the definition of qualified education expense in Georgia's existing state tax credit law (O.C.G.A. § 48-7-29.16) to reference the new article structure.
• Sets the changes to apply to taxable years beginning on or after January 1, 2027.

Scholarship granting organizations operating in Georgia, individual taxpayers who donate to them, the state revenue commissioner and the Department of Revenue, and indirectly students who receive private school scholarships funded through these organizations.

If Georgia does not opt in, residents could not claim the new federal tax credit for donations to these scholarship groups. By having the revenue commissioner submit annual notices and publish a qualifying organization list, the bill sets up the mechanics Georgians would need to actually use the federal benefit starting in 2027.

• Section 1 states legislative intent for Georgia to participate in the federal tax credit created by Section 70411 of federal Public Law No. 119-21.
• Section 2 replaces the word 'chapter' with 'article' in several existing Code sections (20-2A-1, 20-2A-2, 20-2A-2.1, 20-2A-7) as a conforming change.
• Section 3 designates existing sections as Article 1 and adds Article 2, including new Code Section 20-2A-21, which assigns the revenue commissioner to make federal elections and submit annual notice to the U.S. Treasury by the federal deadline.
• Section 3 also requires the commissioner to publish the list of qualifying scholarship granting organizations on the Department of Revenue's website and accept applications from organizations year-round.
• Section 3 bars any state department, agency, board, commission, or authority from adopting rules that expand, limit, or diverge from federal law and guidance on this tax credit.
• Section 4 revises the definition of 'qualified education expense' in O.C.G.A. § 48-7-29.16 to reference the new Article 1 structure.
• Section 5 sets the effective date as upon the Governor's approval (or becoming law without approval), applying to taxable years beginning on or after January 1, 2027.

1. 2026-03-03House Committee Favorably Reported By Substitute (House)
2. 2026-02-04House Second Readers (House)
3. 2026-02-03House First Readers (House)
4. 2026-02-02House Hopper (House)

• Scott Hilton (R, HD-048)Primary sponsor
• Jan Jones (R, HD-047)
• Chuck Efstration (R, HD-104)
• Charles Cannon (R, HD-172)
• Rick Townsend (R, HD-179)
• Houston Gaines (R, HD-120)

• school choice
• tax credits
• scholarship organizations
• education funding
• state revenue department