ATLANTA — Senators in Georgia are supporting a substantial initiative introduced by Republican Lt. Gov. Burt Jones aimed at establishing a new child tax credit.
On Wednesday, the Senate unanimously approved Senate Bill 89, with a vote of 49-0.
This legislation proposes a state income tax credit of up to $250 for each child under the age of seven, as well as an expansion of the existing childcare tax credit, which would allow parents to claim an additional $300 for each child.
Furthermore, it would enable businesses to earn a larger tax credit for their investments in on-site childcare facilities.
The implementation of these three components is projected to cost the state over $180 million annually in lost tax revenue, with the new child credit for younger children being the most significant expense, estimated to exceed $160 million each year.
The decision now rests with members of the House as they weigh their support for this change, especially in light of a slowdown in state revenue growth.
Sen. Brian Strickland, a Republican from McDonough and the bill’s sponsor, emphasized the importance of considering the return on investment when evaluating such tax credits.
“Providing families with greater flexibility to work and pursue careers, while ensuring access to quality childcare for young children, is undeniably a long-term benefit for our state and taxpayers,” he stated.
He added that supporting this initiative is also the morally right choice.
Jones, amid his aspirations for a gubernatorial run in 2026, has advocated for child tax breaks, appealing to a conservative base aligned with Trump for a potential Republican primary.
However, his focus on initiatives to aid children is also strategically aimed at creating a strong platform for a general election in a state that is politically competitive.
In contrast, Democrats have proposed even more expansive tax relief options, including a $200 child tax credit for every child under 17, along with a childcare tax credit that could match parental spending on various child care services.
Tax credits, which allow individuals to decrease their tax liabilities up to the full amount of the credit, hold more value compared to tax deductions.
In Georgia, these credits are only applicable up to the individual’s total tax bill, meaning that taxpayers with minimal or no state income tax cannot receive refunds.
Currently, there exists a federal child tax credit of up to $2,000 for each child under the age of 17, but Georgia has not yet instituted its own version of this credit.
At present, Georgia’s child care tax credit enables taxpayers to recover up to 30% of the federal income tax credit allocated for childcare expenses.
With the federal cap set at $3,000 per child, Georgia’s maximum benefit is $900; however, the proposed plan aims to elevate this amount to $1,200, which equates to 40% of the federal cap.
This enhancement is anticipated to add an extra $14 million in costs annually to the already foregone $42 million in state revenue.
In addition to these measures, the proposal looks to amplify the tax advantages available to employers who invest in the building or equipping of childcare centers.
Presently, employers can receive a credit amounting to 50% of their expenditures off their corporate income tax, but the new plan seeks to increase that to 75%.
