Kemp signs state income tax cut for many Georgians into law

Gov. Brian Kemp on Monday signed into law a small state income tax cut for Georgians who use the standard deduction when they file their returns.

House Bill 593 cuts what filers pay by reducing the amount of income the state taxes.

The General Assembly approved HB 593 despite a provision in the federal $1.9 billion relief plan that Republicans worried would scuttle it.

Congress put a provision into the plan saying money sent to states couldn’t be used for tax cuts, as some in Republican-led states had proposed. The Ohio attorney general sued the Biden administration in part over that provision.

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But the U.S. Treasury Department said last week that the prohibition on tax cuts wouldn’t necessarily apply to those that didn’t use COVID-19 relief funds. HB 593 was in the works before Congress passed the relief bill, so state officials maintain it won’t use relief funds.

The tax cut would be relatively small — less than $100 for a married couple filing jointly — but would cost the state $140 million a year.

Under the bill, the standard deduction for a single taxpayer would increase by $800, for a married couple filing a joint return, $1,100. Georgians who are over 65 or blind would get an additional $1,300 deduction. The new, higher deductions would have no impact on filers this year since they take effect in 2022.

“A year ago it would have seemed far-fetched that Georgia would be able to cut taxes in the middle of a once-in-a-lifetime global pandemic,” Kemp said. “House Bill 593 provides a tax break for hardworking Georgians when they need it and they deserve it.”

House Speaker David Ralston, R-Blue Ridge, said, “This will benefit primarily lower- and middle-income families across this state.”

Kemp also signed a bill to increase the tax credit for families who adopt children from the foster care system.

Part of a package of legislation supported by Kemp to overhaul the state’s foster care system, House Bill 114 would increase the tax credit for families that adopt a child from foster care from $2,000 to $6,000 per year for five years. The measure passed unanimously.


About the new deductions

Under the bill, the standard deduction for a single taxpayer would increase by $800, for a married couple filing a joint return, $1,100. Georgians who are over 65 or blind would get an additional $1,300 deduction. The new, higher deductions would have no impact on filers this year since they take effect in 2022.

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