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

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.

• 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.

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.

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.

• 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.

1. 2026-02-24House Committee Favorably Reported By Substitute (Cámara de Representantes)
2. 2025-02-24House Second Readers (Cámara de Representantes)
3. 2025-02-21House First Readers (Cámara de Representantes)
4. 2025-02-20House Hopper (Cámara de Representantes)

• Rick Townsend (R, HD-179)Patrocinador principal
• Lehman Franklin (R, HD-160)
• Rob Leverett (R, HD-123)
• Beth Camp (R, HD-135)
• Scott Hilton (R, HD-048)

• income tax credits
• public school funding
• education donations
• state tax policy