Childcare Tax Credit from Georgia: Increased to $4,000

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Georgians will get more in childcare tax credits now that the governor has signed into law new legislation. The childcare tax credit from Georgia will now be $4,000 per dependent, compared to $3,000 earlier. In addition to boosting the childcare tax credit, the governor signed into law four more tax relief bills.

More childcare tax credit from Georgia

Last week, Gov. Brian Kemp signed into law House Bill 1021, which increases the amount that would be allowed to deduct per dependent from $3,000 currently to $4,000. The increased credit will result in about $50 in tax savings per child for parents.

HB1021 passed the House in February by a unanimous vote 165–0, while the Senate approved it on March 28 (50–0). Specifically, HB1021 increases the state income tax dependent exemption by 33%. The new childcare tax credit from Georgia will be effective for the 2024 tax year, i.e., when people file their tax returns early next year.

Rep. Lauren Daniel is the sponsor of the bill, and it has been signed by Chairman Bruce Williamson, Chairman Shaw Blackmon, Chairwoman Deborah Silcox, Rep. Scott Hilton and Speaker Jon Burns. The bill was carried in the Senate by Chairman Russ Goodman.

“Faced with rising costs for all things from groceries to childcare, this will provide a meaningful relief for families fighting the negative effects and bad policies we’ve seen come out of Washington D.C.,” Gov. Kemp said in a press release.

Other tax relief bills that the governor signed

In addition to increasing the childcare tax credit from Georgia, the governor signed four more tax relief bills, including the bill (House Bill 1015) that reduces the state tax rate.

HB1015 has been a priority for Atlanta lawmakers since it was announced last December. The bill accelerates the largest state income tax cut in Georgia’s history. HB1015 builds upon HB1437, which reduces the income tax rate by 10 basis points starting in 2025.

HB1015 accelerates the reduction in the income tax rate for Tax Year 2024 to 5.39%, instead of 5.49% set by HB1437. The reduction in the tax rate marks 36 basis points cut from the 5.75% for Tax Year 2023.

Gov. Kemp also signed into law HB1023, which reduces the corporate income tax rate to 5.39% from 5.75% for Tax Year 2024. HB1023 matches the state’s individual and corporate income tax rate.  

Another tax relief bill that the governor signed into law is HB 581. The bill gives counties the authority to decide on a homestead valuation freeze, which limits the appreciation of property value to the inflation rate. Also, the bill offers a special local option sales tax for counties and municipalities to offer property tax relief.

Lastly, Gov. Kemp signed into law SB496, which expands the requirements for a home to be certified as historic. Also, the bill extends the credits for the rehabilitation of historic homes and structures to Dec. 31, 2029, as well as for rural zone revitalization to Dec. 31, 2032.