GA State Income Tax Cut, Foster Care Reform Signed Into Law: Kemp

ATLANTA, GA — Georgians who use the standard deduction when filing their tax returns will get a state income tax cut, Gov. Brian Kemp said Monday.

Kemp signed House Bill 593 into law Monday, which increases the amount of standard deduction from state taxable income for individual tax filers. Essentially, it reduces the amount of income the state taxes — despite a provision in the $1.9 billion American Rescue Plan Act that removes states' abilities to fund tax breaks with the federal relief money.

Republican legislators and officials across the country, including Kemp and Ralston, balked at the idea — the Ohio attorney general even sued the Biden administration in part over that provision.

However, the U.S. Treasury Department said last week that the tax cuts provision wouldn't apply to those that didn't use COVID-19 relief money — and since HB 593 was in the legislature prior to the passage of the relief bill, state officials say it won't use the relief dollars.

"As we return to normal here in the Peach State, and look to fully restore our economy, it is critical that Georgians keep as much of their hard-earned money as possible to revive small businesses and industries still struggling under the weight of COVID[-19]. HB 593 does just that," Kemp said at a news conference Monday.

For example, the standard deduction for a single taxpayer would increase by $800 under the new bill, and $1,100 for a married couple filing a joint return. Georgians age 65 and older by the close of the taxable year, and Georgians who are blind get an additional $1,300 deduction.

The tax cut — which is estimated to cost the state $140 million per year — will primarily benefit lower- to middle-income families across the state, House Speaker David Ralston said during the news conference.

However, while Kemp signed the bill into law Monday, the higher deductions won't affect Georgians' tax returns until 2022.

Additionally, Kemp signed HB 114 into law Monday as well, which triples the tax credit for families who adopt children from the foster care system. HB 114 is part of a series of bills supported by Kemp to reform the state's foster care system.

HB 114, which passed unanimously, raises the tax credit for families adopting a child (or multiple children) out of foster care from $2,000 to $6,000 per child, per year for five years.

"Placing our kids in caring families is not controversial or partisan, and making that process easier is the least we can do as public officials to serve some of our most vulnerable citizens," Kemp said at the news conference.