ATLANTA — The Georgia state Senate has shown unanimous support for an ambitious initiative championed by Republican Lt. Gov. Burt Jones aimed at establishing a child tax credit. On Wednesday, the Senate passed Senate Bill 89 with a 49-0 vote, proposing a new state income tax credit of up to $250 for each child under the age of 7. Additionally, the bill seeks to enhance an existing tax credit for child care, allowing parents to receive up to $300 more per child. Employers would also benefit from a larger tax credit for investing in on-site childcare facilities.
This comprehensive tax reform is projected to result in a loss of approximately $180 million in tax revenue annually, as estimated by financial analysts. The child tax credit for children under seven stands out as the costliest element of the plan, expected to account for more than $160 million of that total. The ball is now in the court of House representatives, who must determine their stance on this proposal amid a backdrop of slowing state revenue growth.
According to Senator Brian Strickland, a Republican from McDonough, any extensive tax credit initiative must be assessed for its potential return on investment. He commented, “When evaluating the financial impact of a tax credit, it’s crucial to consider the benefits it delivers.” Strickland emphasized that enabling families to more easily access quality childcare services is a wise investment for the state, enhancing career opportunities for parents and benefiting taxpayers over time.
Jones has been a strong advocate for child tax relief as he contemplates a run for governor in 2026, often targeting a voter base aligned with conservative values typical of former President Trump’s supporters. Nonetheless, he has also made efforts to advocate for children’s welfare, hoping to build a well-rounded profile ahead of a potential general election in a state known for its political competitiveness.
Meanwhile, Democrats have put forth plans for even more substantial tax breaks, proposing a $200 child tax credit for every child under 17, along with a child care tax credit that would match parental expenditures on daycare, preschool, after-school programs, or summer activities.
It’s important to note that tax credits allow taxpayers to reduce their tax liability up to the total amount of the credit, which makes them more beneficial than simple tax deductions. In Georgia, these credits are limited to the amount owed in state income tax, meaning taxpayers with minimal or no tax liability cannot receive refunds from these credits.
Though a federal child tax credit exists, offering up to $2,000 per child for those under 17, Georgia currently lacks a corresponding state-issued credit. At present, Georgia’s existing child care tax credit allows taxpayers to reclaim up to 30% of the federal tax credit for childcare expenses, with a federal cap set at $3,000 per child, establishing Georgia’s limit at $900. The new proposal aims to increase this cap to $1,200, or 40% of the federal maximum, resulting in an estimated additional cost of $14 million annually, on top of the existing $42 million in forgone revenue.
Additionally, the plan includes enhanced tax incentives for companies that invest in developing or equipping childcare facilities. At present, corporate tax credits allow employers to deduct 50% of their expenditure from their corporate income tax, while the proposed legislation increases this rate to 75%.
