X
X

Find Your Specialist

X

Contact Us

    Go Back

    Georgia Enacts Tax Refunds, Lowered Flat Rate Income Tax

    Georgia taxpayers will see money in their pockets this election year as a result of the Georgia General Assembly’s recent enactment of HB 1302, a bill to refund 2020 taxes based on the State’s 2021 revenue surplus of $3.7 billion. Georgia’s surplus largely came from federal COVID relief funds. Governor Kemp signed the legislation on March 23, 2022, which provides a maximum refund amount of $250 for single taxpayers and $500 for joint filers based on tax liability shown on the Georgia return.

    Example: A single taxpayer filed a 2020 income tax return and paid a tax liability of $300. The taxpayer files a timely 2021 return and would be eligible to receive a refund of 2020 taxes in the amount of $250.

    If taxpayers owe less than the maximum refund amounts, they will only receive a refund for the amount of the actual tax liability.

    Example: A married couple filed a 2020 income tax return with a tax liability of $400. The taxpayers file a 2021 return and are eligible to receive a refund of 2020 taxes in the amount of $400. Although the maximum allowable refund is $500 for taxpayers who file jointly, the taxpayers cannot receive a refund of more than the actual $400 tax liability.

    To get the refund, taxpayers must have filed their 2020 return and must file their 2021 return by this year’s deadline (including any extension granted by the Georgia Department of Revenue (DOR). Part-year filers and taxable nonresidents are eligible for a prorated refund based on the share of their income taxable in Georgia.

    Flat Rate Income Tax Coming

    The General Assembly did not stop with the refund. On the last day of the session, the lawmakers passed HB 1437, a bill to eliminate Georgia’s bracket system and replace it with a flat tax of 4.99%. Governor Kemp is expected to sign the bill. Georgia’s current income tax has six brackets covering very low income levels, with a maximum rate of 5.75% imposed on over $7,000 of taxable income.

    The rate reductions will be phased in yearly beginning in 2024 and extending through 2029 based on the State’s revenue estimates and revenue collections, with a 3% revenue increase required to move to the next phase. The phase-in also stops in years that revenue collections are lower than any of the previous five years.

    Along with rates, the Georgia standard exemption will be increased from $2,700 to $12,000 for single filers and from $7,400 to $24,000 for joint filers.

    Lawmakers did not release any formal revenue estimates for the tax cut although Senate Finance Committee Chairman Chuck Hufstetler, (R-Rome) estimated the cost at $455 million in its first year, and House Ways and Means Committee Chairman Shaw Blackmon, (R-Bonaire) said it would cost more than $1.2 billion. An independent think tank, the Georgia Budget and Policy Institute (GBPI) estimates the tax cut will cost the State $2 billion in revenues when fully phased in.

    Related Articles

    • 01.25.2023

      A New Year Means New Privacy Laws

      Ever since the General Data Protection Regulation (GDPR) came into effect in May 2018, US state privacy laws have been passed in Virginia, Colorado, Connecticut, Utah and, most pressing of them all, California. The California Privacy Rights Act (CPRA) went…

      Continue Reading
    • 01.19.2023

      The New Rules Under Section 174

      Internal Revenue Code Section 174 has long been used by taxpayers to deduct certain expenses related to research and experimentation (R&E) in the current year.  The code section was originally enacted in 1954 to eliminate uncertainty in the tax accounting…

      Continue Reading
    • 12.20.2022

      IRS Customer Service May Improve in 2023

      With 4,000 new customer service representatives and plans to hire 700 new Taxpayer Assistance Center (TAC) employees, taxpayers soon may get relief from endless hold times, no in-person help and unresolved problems.

      Continue Reading
    • 12.12.2022

      Reduce Taxable Income with IRA Distributions Transfers

      IRA owners who are age 70½ or over can transfer up to $100,000 per year to charity to reduce their taxable income. These transfers, known as qualified charitable distributions or QCDs, offer end-of-the year tax savings and can count toward required minimum distributions (RMDs) that taxpayers who are age 72 must make each year. Think of it as a tax-free charitable rollover of IRA funds.

      Continue Reading
    • 12.02.2022

      UK R&D Tax Reliefs – Where Are We Now?

      In the November 2022 Autumn Statement, the Chancellor announced significant changes to the current Research and Development (R&D) tax reliefs. The key announcements were a change to the applicable rate of the Research and Development Expenditure Credit (RDEC) and a…

      Continue Reading
    • 12.01.2022

      1099s Required for 2022 Tax Year

      Taxpayers earning income from selling goods or providing services may receive a Form 1099-K, Payment Card and Third-Party Network Transactions, for the first time in early 2023, when the 2022 forms are due. The requirement to file Forms 1099 have…

      Continue Reading
    • 11.28.2022

      IRS Uncovers $3.1 Billion in COVID Fraud

      The IRS Criminal Investigation department (IRS-CI) has partnered with the Justice Department to uncover and prosecute fraudulent activities related to the federal government’s COVID relief programs. To date, the IRS has conducted 840 investigations involving fraud amounts totaling more than…

      Continue Reading
    • 10.25.2022

      IRS Inflation Reduction Act Increases Funds

      The Inflation Reduction Act of 2022, enacted in August, increased funding for the IRS by $80 billion through 2031 for enforcement activities, operations support, systems modernization and taxpayer services. The legislative language, Treasury Secretary Janet Yellen and IRS Commissioner Charles…

      Continue Reading

    Privacy Overview

    When you use or access the Site, we use cookies, device identifiers, and similar technologies such as pixels, web beacons, and local storage to collect information about how you use the Site. We process the information collected through such technologies, which may include Personal Information, to help operate certain features of the Site (e.g., to prevent online poll participants from voting more than once), to enhance your experience through personalization, and to help us better understand the features of the Site that you and other users are most interested in.

    You can enable or disable our use of cookies per category.
    Always Enabled