HB 136: Income tax; contributions to foster child support organizations; expand tax credit

Georgia currently offers a state tax credit for child and dependent care expenses and a separate credit for contributions to organizations that support foster children aging out of care. This bill changes both and adds two brand-new credits. It raises the existing child and dependent care credit to 50 percent of the federal credit amount, starting with the 2025 tax year. It creates a new $250 per child credit for taxpayers with a qualifying child under age six, starting in 2026. It also creates a new credit for employers that pay at least $1,000 per year toward an employee's child care costs, worth $500 to $1,000 per child, capped at $20 million total per year and set to expire at the end of 2030. The bill also rewrites the foster child support organization credit. It expands eligible organizations and adds 'justice involved youth' (ages 18-25 who were committed to the Department of Juvenile Justice) as a covered group, raises the total credit cap to $30 million a year starting in 2026 (with $10 million reserved for insurance companies), lets insurance companies claim the credit against their premium tax, and tightens reporting, certification, and spending rules for the nonprofits involved. Most provisions take effect July 1, 2025 and apply to tax years starting in 2026, except the child care credit increase, which applies starting in 2025.

• Increases Georgia's child and dependent care tax credit (O.C.G.A. § 48-7-29.10) to 50 percent of the federal credit, replacing the old 10 to 30 percent phase-in, starting in the 2025 tax year.
• Creates a new $250 per child tax credit for taxpayers with a qualifying child under age six, starting with the 2026 tax year.
• Creates a new tax credit for employers that pay at least $1,000 a year per employee toward child care, worth $500 to $1,000 per child, capped at $20 million statewide per year and repealed after December 31, 2030.
• Expands the foster child support organization tax credit to cover 'justice involved youth' (young people aged 18-25 previously committed to juvenile justice) alongside aging foster children.
• Raises the overall cap on the foster child support credit from $20 million to $30 million a year starting in 2026, and lets insurance companies claim up to $10 million of that against their insurance premium tax.
• Tightens rules for the nonprofits that receive these donations, including certification and decertification standards, spending caps on overhead, and new public reporting and audit requirements.

Parents of young children who claim state tax credits, employers that help pay for employee child care, insurance companies that donate to qualifying nonprofits, and nonprofit organizations, child-placing agencies, and child-caring institutions that serve foster children and justice-involved youth in Georgia.

Families with children under six and those using licensed child care would see larger state tax breaks, and employers that subsidize child care could get new credits. Nonprofits serving foster and justice-involved youth would gain a bigger pool of tax-credited donations but face stricter oversight on how they spend the money.

• Section 1-1 changes the child and dependent care credit (O.C.G.A. § 48-7-29.10) to a flat 50 percent of the federal Section 21 credit, applicable to tax years starting in 2025.
• Section 1-2 adds new Code Section 48-7-29.27, a $250 per qualifying child (under age six) credit for tax years starting in 2026, with rules for divorced or separated parents.
• Section 1-3 adds new Code Section 48-7-29.28, an employer credit of $500 to $1,000 per child for eligible child care payments, capped at $20 million statewide per year, requiring preapproval and expiring December 31, 2030.
• Section 2-1 rewrites Code Section 48-7-29.24 to add 'justice involved youth' as a covered group, expand qualified organizations to include licensed child-caring institutions, and raise mentor pay caps to $100 per month and $1,200 per year.
• Section 2-1 raises the aggregate credit cap to $30 million per year starting in 2026, reserving up to $10 million for insurance companies (business enterprises) claiming the credit against their premium tax under Code Section 33-8-4.
• Section 2-1 requires qualified organizations to spend at least 80 percent of contributions on qualified expenditures, submit annual reports and audited financial certifications, and face decertification for noncompliance.
• Section 2-2 adds a new subsection to Code Section 48-7-60 letting the state tax commissioner share confidential taxpayer information with other state agencies to help administer these tax credits.
• Section 3-1 sets the Act's effective date as July 1, 2025, applying to tax years starting in 2026, except the child and dependent care credit change, which applies starting in 2025.

1. 2025-05-13Effective Date 2025-07-01
2. 2025-05-13Act 182
3. 2025-05-13House Date Signed by Governor (Cámara de Representantes)
4. 2025-04-10House Sent to Governor (Cámara de Representantes)
5. 2025-04-04Senate Agreed House Amend or Sub (Senado)
6. 2025-04-02House Agreed Senate Amend or Sub As Amended (Cámara de Representantes)
7. 2025-03-28Senate Passed/Adopted By Substitute (Senado)
8. 2025-03-28Senate Third Read (Senado)

• Mark Newton (R, HD-127)Patrocinador principal
• Shaw Blackmon (R, HD-146)
• Trey Rhodes (R, HD-124)
• Brent Cox (R, HD-028)
• Brian Prince (D, HD-132)
• Sheila Jones (D, HD-060)
• Brian Strickland (R, SD-042)

1. AprobadaVotación: Cámara de Representantes24 de febrero de 2025

   170 a favor, 2 en contra (2 sin votar, 6 ausentes)

   Passage: House Vote #75

2. AprobadaVotación: Senado28 de marzo de 2025

   31 a favor, 21 en contra (2 sin votar, 2 ausentes)

   Motion To Engross: Senate Vote #314

3. AprobadaVotación: Senado28 de marzo de 2025

   50 a favor, 0 en contra (2 sin votar, 4 ausentes)

   Passage By Substitute: Senate Vote #320

4. AprobadaVotación: Cámara de Representantes2 de abril de 2025

   163 a favor, 4 en contra (2 sin votar, 11 ausentes)

   Agree To Senate Sub As Am: House Vote #397

5. AprobadaVotación: Senado4 de abril de 2025

   54 a favor, 0 en contra (0 sin votar, 2 ausentes)

   Agree To House Amendment To Senate Substitute: Senate Vote #449

• income tax credits
• child care
• foster care support
• juvenile justice
• family tax benefits