ATLANTA — Georgia’s state senators have endorsed a significant initiative led by Republican Lt. Gov. Burt Jones aimed at establishing a child tax credit.
On Wednesday, the Senate passed Senate Bill 89 with a unanimous vote of 49-0. This legislation proposes a state income tax credit of up to $250 for each child under the age of 7. Additionally, it seeks to expand an existing tax credit for childcare, allowing parents to receive up to an additional $300 per child, and increases tax credits for employers who invest in on-site childcare facilities.
The implementation of all three components of this plan is projected to cost the state upwards of $180 million annually in lost tax revenue. The new tax credit for children under 7 represents the bulk of this finance commitment, exceeding $160 million each year. The House now faces the task of determining whether to endorse this initiative, especially considering the recent slowdown in state revenue growth.
Sen. Brian Strickland, a Republican from McDonough and a sponsor of the bill, emphasized the importance of weighing the costs of a tax credit against its potential benefits. “Investing in childcare allows more families the flexibility to pursue careers, which is crucial for long-term growth for our state and its taxpayers,” he stated. “It’s not only an investment worth making; it’s also a moral obligation.”
Jones’s advocacy for child tax credits occurs as he contemplates a potential run for governor in 2026, appealing to a conservative base aligned with Trump in the upcoming Republican primaries. Simultaneously, he is taking steps to foster a positive legacy regarding child welfare in the politically contested landscape of Georgia.
In contrast, Democrats are proposing even more substantial tax relief, including a $200 child tax credit applicable to all children under 17 and a childcare tax credit equivalent to the total amount spent by parents on daycare, preschool, after-school care, or summer programs.
Tax credits permit individuals to lower their tax obligations, often more beneficially than tax deductions. In Georgia, tax credits can only offset the individual’s tax liability; thus, taxpayers with minimal or no state income tax cannot receive refunds.
While a federal child tax credit exists, providing up to $2,000 for each child under 17, Georgia has not previously implemented its own version. Currently, Georgia’s childcare tax credit enables taxpayers to claim up to 30% of the federal income tax credit for childcare, capped at $900 per child based on a federal limit of $3,000. The new proposal would elevate that cap to $1,200, reflecting 40% of the federal limit, resulting in an estimated additional cost of $14 million beyond the $42 million loss the state already incurs.
Furthermore, the bill aims to enhance tax incentives for employers investing in childcare facilities. Presently, employers can deduct 50% of their expenses from corporate income tax; under the new legislation, this credit would increase to 75%.
