$5,000 New Tax Credit from Georgia: How You Can Receive It

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New Tax Credit from Georgia

Georgia taxpayers can benefit from a lesser-known credit that can give them up to $5,000. The new tax credit from Georgia is for taxpayers who help young adults leave the foster care system. This credit is part of the Fostering Success Act (FSA) – House Bill 424 – that the state General Assembly approved in 2022.

New tax credit from Georgia – how does it work?

HB424 established the Qualified Foster Child Donation Credit program that allows taxpayers to redirect some of their income toward organizations offering support services to young adults wanting to start a new life out of foster care.

Under the program, Georgia taxpayers can receive up to $2,500 dollar-for-dollar in tax credit, while couples can get up to $5,000 per year that they contribute to the program. Also, corporate donations are limited to 10% of the company’s annual tax liability.

Taxpayers need to electronically notify the state Department of Revenue of the total contribution they intend to make to a Qualified Organization. Within 30 days of receiving the request from the taxpayer, the department will have to approve or deny the request based on the availability of the new tax credit from Georgia.

Within 60 days of receiving the approval, or by Dec. 31 (whichever comes first), the taxpayer will have to contribute the approved amount to the Qualified Organization.

How much funds are available?

Last year, lawmakers approved $20 million for the program. A bill was introduced this year to raise the tax credit to $30 million, but it failed due to the disagreement between the House and Senate. So, the annual cap still remains at $20 million. The authorities, as of March last year, have approved $153,000 for the 2024 tax year.

The number of qualified organizations in the program increased from 20 last year to 39 this year. Funds for these organizations will go toward all types of needs, including tuition, books, food, transportation, healthcare and more.

“Funds will be distributed to carefully vetted, accountable organizations directly to young people actively enrolled in Georgia’s public colleges or vocational training programs,” the program’s website says.

It is estimated that about 700 young adults age out of Georgia’s foster care system each year. Most of them have no family to return to. Also, data from several studies show that most young adults who leave foster care end up homeless or fall victim to human trafficking. Georgia currently has more than 11,000 children in foster care.

In separate news, CareSource, which is a mission-driven managed care plan, announced an investment of $1 million in the Fostering Success Act (FSA) in February this year. The investment will go toward the upliftment of Georgia families.

Also, the investment will benefit the young adult population in foster care who may be eligible to register in the state’s Families managed care plan or Medicaid Fee-for-Service.

This article originally appeared on ValueWalk and was syndicated by MediaFeed.

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