Brian Kemp plan advances for Georgia income tax rebates

February 24th, 2022

Gov. Brian Kemp’s plan to pay $1.6 billion worth of state income tax refunds is advancing, with lawmakers looking to help the Republican governor fulfill his promise to give some of Georgia’s historic surplus back to taxpayers as both Kemp and legislators seek reelection.

The House Ways and Means Committee voted unanimously to pass House Bill 1302 on Thursday, sending it to the full House for more debate.

“It is an opportunity for the state of Georgia to return tax money to the taxpayers of Georgia,” said Rep. Josh Bonner, a Fayetteville Republican who is one of Kemp’s floor leaders.

The measure promises a $250 rebate for single filers, $375 for single adults who head a household with dependents and $500 for married couples filing jointly. The refund would only be paid to people who filed tax returns for both the 2020 and 2021 tax years. The state began processing 2021 returns on Feb. 1 and returns are due April 18 unless a taxpayer files an extension.

Georgia ran a $3.7 billion surplus in the budget year than ended June 30, filling its rainy day fund to the legal limit and leaving $2.3 billion in additional undesignated surplus. The tax refunds would come out of that money, but even after that, the state would have more than $700 million in the bank. The amended budget for the current year provides the money for the payments.

With revenues flush, lawmakers are also moving forward with Kemp’s plans to give $5,000 raises to state and university employees and $2,000 raises to teachers. Legislators are also likely to consider a more permanent tax cut.

The bill says the refunds would be made against a taxpayer’s 2020 tax liability. No one could get back more money than they paid in taxes that year.

The state will first use the refund to offset current taxes due and then will issue refunds to taxpayers, typically through a direct deposit to a taxpayer’s bank account. However, it would continue intercepting the refunds of people who owe debts, such as delinquent child support.

It’s unclear how long it would take the state to start making payments if the bill passes.

“Certainly we’d like to start delivering those checks right upon signature, but it will be a process,” Bonner said.

Crediting or issuing a refund will be automatic for anyone who files a 2020 and 2021 return, with no further action required. People who have already filed 2021 tax returns won’t have to refile their taxes.

The refund will not count as taxable income for state purposes, but Revenue Commissioner Robyn Crittenden told a subcommittee on Wednesday that it would count as taxable income for federal income taxes.

Follow Jeff Amy on Twitter at http://twitter.com/jeffamy.