GeorgiaHB 1362025-2026 Regular SessionHouseWALLET

Income tax; contributions to foster child support organizations; expand tax credit

Sponsored By: Shaw Blackmon (Republican), Brent Cox (Republican), Sheila Jones (Democrat), Mark Newton (Republican), Brian Prince (Democrat), Trey Rhodes (Republican)

Signed by Governor

Ways & MeansFinanceGeneral Bill

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 4 benefits, 2 costs, 1 mixed.

Bigger care tax credit for families

Beginning with tax years starting January 1, 2025, Georgia's child and dependent care credit equals 50% of your allowed federal credit. You must claim and qualify for the federal credit. Georgia's credit only reduces the Georgia income tax you owe; it does not provide a refund beyond that amount. Unused credit cannot carry forward or pay an earlier year's tax bill.

New tax credit for young children

For tax years starting January 1, 2026, you can claim $250 per child under six who meets federal qualifying-child rules. Only one taxpayer can claim each child. When parents or guardians file separately, the person with custody for more than half the year generally claims it. A noncustodial parent or guardian needs an unconditional court order attached to the return or the custodial person's written assignment. Nonresidents and part-year residents receive a credit prorated by Georgia-taxable income. The credit cannot exceed Georgia income tax owed, carry forward, or pay an earlier year's tax bill.

Foster donors face new credit restrictions

Beginning July 1, 2025, donors cannot claim foster-support credits for donations to organizations with specified contracting ties. The restriction applies when a taxpayer or business operates, owns, or is a subsidiary of an entity contracting directly with the recipient. Donors also cannot direct a qualified donation to a specific purpose or the direct benefit of a particular person.

Employers get credits for child care

For tax years starting January 1, 2026, employers get $500 per qualifying child for direct child-care payments. The first-year credit is $1,000 per child when the employer has never paid, reimbursed, or subsidized employee child care. Payments must total at least $1,000 per employee yearly and go directly to an eligible licensed, permitted, or commissioned provider. The employee's enrolled child must be under six, and payments must add to—not replace—other pay and benefits. Employers need preapproval from a $20 million yearly pool; complete applications are processed within 30 days in application order. Same-day applications share remaining funds proportionally when funds run short. Credits cannot exceed approved amounts or Georgia income tax owed, carry forward, or pay prior-year taxes; the credit ends December 31, 2030.

Insurance businesses gain foster donation credits

Beginning July 1, 2025, eligible insurance companies and insurance-company headquarters can use foster-support donation credits against their state insurance premium tax. Donations need preapproval, and the recipient must qualify both at approval and when the donation is made. The credit cannot exceed that year's applicable tax bill. Unused credit carries forward for the next three years, but cannot pay earlier years' taxes. Credits cannot be transferred.

Foster charities face stricter spending oversight

Beginning July 1, 2025, qualified foster-support organizations can retain at most 20% of credit-program funds for overhead or their own use. A specified pass-through category can retain only 2.5% and must send the rest to other eligible organizations. No one can promise donors a direct or special benefit in exchange for qualified donations. Organizations violating that rule lose qualified status and cannot renew it for at least two years. For other noncompliance, Revenue must send certified-mail notice and allow 90 days after receipt to fix deficiencies. Uncorrected problems require removal from the qualified list, rejection of new preapproval applications, and an end to program spending. Removed organizations must transfer unused funds to a compliant organization within 30 calendar days. Organizations must publicly post prior-year financial details by April 1, with a chief executive's compliance certification attested by an independent accounting firm. By July 15, they must submit their tax-exempt annual return or equivalent and a report on donations, credits, spending, contributors, and spending-rule compliance. Reports remain confidential except for required public disclosures and authorized agency sharing. State officials have oversight and audit access, and suspected misuse can be referred to the Attorney General.

Expanded foster support with donation limits

Georgia expands its foster-support donation credit to cover more organizations, youth, and services. Eligible organizations include specified public college foundation programs, qualifying nonprofits, licensed child-placing agencies and child-caring institutions, and qualifying fund-distributing organizations. Aging foster youth include current foster children ages 16–18 and former foster youth ages 16–25 with six months in care after age 14. Justice-involved youth ages 18–25 must meet the law's juvenile-justice commitment and placement requirements. Supported costs include tuition waivers, high-school completion, vocational education, registered apprenticeships, housing, transportation, medical care, counseling, and daily essentials. Direct cash for personal needs is capped at $200 monthly; mentorship is capped at $100 monthly per mentor or $1,200 yearly per youth. Costs reimbursed or eligible for reimbursement by the state child-welfare division are excluded. The annual credit pool is $20 million in 2025 and $30 million starting in 2026, including at most $10 million for eligible insurance businesses. January–June preapproval limits are $2,500 for single filers or heads of household and $5,000 for joint filers. Specified individual owners or partners have a $5,000 limit; other corporations and entities are limited to 30% of income tax liability. Additional amounts can be approved July–December, first come, first served, while funds remain. Contributors must notify the Department electronically before giving and donate within 60 days after preapproval, or approval expires. When a donation falls below the approved amount, the credit cannot exceed 95% of the actual donation. Organizations must be certified and listed by the state child-welfare division; specified organizations must meet operating-history and service requirements, prove continued eligibility annually, and submit their latest annual audit.

Sponsors & Cosponsors

Cosponsors

Brian Strickland
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 468 • No: 27

Senate vote • 4/4/2025

AGREE TO HOUSE AMENDMENT TO SENATE SUBSTITUTE

Yes: 54 • No: 0

House vote • 4/2/2025

Agree to Senate Sub as Am

Yes: 163 • No: 4 • Other: 2

Senate vote • 3/28/2025

PASSAGE BY SUBSTITUTE

Yes: 50 • No: 0 • Other: 2

Senate vote • 3/28/2025

MOTION TO ENGROSS

Yes: 31 • No: 21 • Other: 2

House vote • 2/24/2025

PASSAGE

Yes: 170 • No: 2 • Other: 2

Actions Timeline

Effective Date
7/1/2025
House Date Signed by Governor
5/13/2025House
Act 182
5/13/2025
House Sent to Governor
4/10/2025House
Senate Agreed House Amend or Sub
4/4/2025Senate
House Agreed Senate Amend or Sub As Amended
4/2/2025House
Senate Engrossed
3/28/2025Senate
Senate Third Read
3/28/2025Senate
Senate Passed/Adopted By Substitute
3/28/2025Senate
Senate Committee Favorably Reported By Substitute
3/27/2025Senate
Senate Read Second Time
3/27/2025Senate
Senate Read and Referred
2/26/2025Senate
House Third Readers
2/24/2025House
House Passed/Adopted By Substitute
2/24/2025House
House Committee Favorably Reported By Substitute
2/19/2025House
House Second Readers
1/29/2025House
House First Readers
1/28/2025House
House Hopper
1/27/2025House

Bill Text

HB 136/AP* (v11)
PDF

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