Written by Eamonn McElroy, CPA, Atlanta
Published April 28, 2022
On March 23, 2022, Governor Kemp signed Georgia House Bill 1302 (“HB 1302”) into law. HB 1302 directs the Georgia Department of Revenue to return more than one billion dollars in surplus state funds to qualified taxpayers through a one-time credit.
Who is a “qualified taxpayer” for purposes of this one-time credit?
A “qualified taxpayer” is any individual who filed a Georgia individual income tax return for both the 2020 and 2021 tax years by the due date of the 2021 return, including extensions (generally October 17, 2022 with a valid extension).
A qualified taxpayer does NOT include (1) a nonresident alien, (2) an individual who was claimed as a dependent by another taxpayer for the 2020 tax year, or (3) an estate or trust.
Note: The second exception will be the most likely explanation of why a Georgia resident did not receive the one-time credit. If the individual was claimed as a dependent on a 2020 federal or Georgia tax return, they are ineligible for the one-time credit even if no one claims them as a dependent on a 2021 tax return and they filed their 2021 tax returns as not a dependent.
Okay, I’m a qualified individual, how much will I receive?
The amount you’ll receive depends on the filing status listed on your 2020 Georgia income tax return (NOT your 2021 tax year return filed this year, but your 2020 tax year return filed last year). You can find your filing status listed on your 2020 Georgia Form 500, line 5. The amount of the one-time credit by filing status is as follows:
- Single or married filing separate: $250
- Head of household: $375
- Married filing joint: $500
Note: If your 2020 Georgia total tax liability (2020 Georgia Form 500, line 16) is less than your applicable credit amount listed above, you will receive the lesser amount as your one-time credit. For example, if you filed married filing joint on your 2020 Georgia return, and your 2020 Georgia total tax liability was $300, you will receive $300 as your one-time credit (the lesser of $500 or $300).
When and how will I receive this one-time credit?
You will receive the credit after your 2021 Georgia Form 500 has been filed and processed.
If you calculated a refund due on your 2021 Georgia Form 500 and requested that the refund be direct deposited into one of your accounts, the one-time credit will be direct deposited into that same account. If you owed with your 2021 Georgia Form 500 or did not request direct deposit of a refund, the one-time credit will be mailed as a check to the address listed on your 2021 Georgia Form 500.
I make a lot of money; I’m phased out of this right?
No! You’re not! This one-time credit does not have a phase out based on income level. One merely needs to be a “qualified taxpayer” as defined above.
Can a nonresident or part-year resident of Georgia receive this credit?
Yes, as long as the qualifying factors above are met and the nonresident or part-year resident had Georgia tax liability for the 2020 tax year, the nonresident or part-year resident will receive the one-time credit, although it may be prorated based on the individual’s 2020 adjusted gross income from Georgia sources compared to the individual’s 2020 adjusted gross income from all sources.
Is this one-time credit taxable? Do I need to save anything for my CPA?
No, this one-time credit is not taxable income. You do not need to pass along documentation to your CPA.
Copyright © Eamonn McElroy CPA, LLC.
Disclaimer: Tax law, regulation and procedure are constantly changing. Eamonn McElroy CPA, LLC has provided this article as general information only and is under no obligation to update the article for future changes, including but not limited to changes in tax law or procedure. The information contained in the article is not tax, investment or legal advice, nor should it be construed as tax, investment or legal advice. You should consult with your advisors to determine how the information in this article affects you and what actions you may take and should take.