Georgia’s $1 billion state income tax rebate gets final OK

The Georgia Senate on Tax Break Tuesday gave final approval to a $1 billion income tax rebate, similar to the one the state sent out last year.

The income tax measure — which would mean rebates to millions of Georgians this spring — was one of four tax measures the Senate took up Tuesday. The income tax rebate — House Bill 162 — passed the Senate 46-7.

Gov. Brian Kemp quickly signed the bill into law.

“This bill is about getting money into the pockets of hardworking Georgians rather than staying at the state level,” Sen. Mike Hodges, a Republican from Brunswick and a Kemp Senate floor leader, told colleagues.

The vote came a day after Kemp announced that he had signed a midyear state budget that includes a separate $1 billion property tax rebate.

Both rebates were proposed by Kemp last year when he was running for reelection. He announced his plan once it was clear the state was running a massive surplus in tax collections.

After all the bills were paid and agencies returned leftover funds, the state’s surplus for fiscal 2022, which ended June 30, was a record $6.6 billion.

Sen. Josh McLaurin, D-Sandy Springs, told colleagues the General Assembly has underfunded state government for years by, for example, underpaying workers in critical jobs, such as prison guards and pre-kindergarten teachers, and underfunding programs. Still, McLaurin said he’d vote for the tax rebate.

“Our voters expect our surpluses to get returned to them when they reach these levels,” he said. “But the reason that they expect that is because we have not created a culture of fully sustaining good government at the state level.

“We have created a culture of telling voters we have funded government enough.”

Under the income tax rebate legislation, Georgians who filed tax returns for the 2021 and 2022 tax years will receive up to $250 rebates if single-filing. Head of household filers will get up to $375 and couples filing jointly up to $500.

Georgians who didn’t owe state income taxes — such as seniors living on pensions and/or Social Security — won’t’ receive the rebates.

For instance, under Georgia law, taxpayers from ages 62 to 64 can exclude up to $35,000 of their retirement income — from pensions or investments — on their state return. Taxpayers who are 65 or older can exclude up to $65,000 per person on their returns. Social Security benefits also aren’t taxed.

Last year the same rebates went out starting in May, just before the Republican primary. The state Department of Revenue estimates the rebates will start showing up in bank accounts or sent out within six weeks. The rebates should all be out by July 1.

Under the midyear budget Kemp signed, homeowners would receive an extra one-time exemption on the value of their homes at tax time, a move that Kemp said would save those Georgians, on average, about $500.