On Wednesday, March 23, Governor Brian Kemp of Georgia signed House Bill 1302 (the Bill), which would approve the use of $1.1 billion from state surplus funds toward an income tax refund for the state. The refunds are expected to be available and issued within the next six to eight weeks.
How Much Will I Receive from My Georgia Tax Refund?
According to the Bill, qualified taxpayers (those who file individual tax returns for 2020 and 2021, excluding non-U.S. individuals, estates/trusts and dependents – nonresidents and partial residents may qualify at a prorated amount) will receive one-time refunds from the Department of Revenue based on their 2021 filing status. The amounts are:
- $250 for single taxpayer or married taxpayer filing a separate return
- $375 for head of household with dependents
- $500 for couples married filing jointly
Additional highlights of HB 1302 for taxpayers:
- If a taxpayer’s 2020 tax liability in the state of Georgia was less than the maximum amounts referenced above, the refund will be limited to tax liability. For example, if a married person’s 2020 Georgia tax was $400, their refund is limited to $400.
- If a taxpayer is a part-year resident or non-resident, their resulting refund will be prorated.
- Refunds are expected to be issued between now and August 2022 for those who have already filed their 2021 tax return for the state of Georgia.
- If a taxpayer paid their 2021 Georgia due by Automated Clearing House (ACH) or used direct deposit for a refund, the refund associated with HB 1302 will be directly deposited into taxpayer’s account. All others will receive their refunds by check via mail to the address shown on 2021 tax return.
When Will I Receive My Refund?
Taxpayers who already filed their taxes for the 2021 taxable year can expect to receive money back in a later separate payment. Taxpayers who have not yet filed for 2021 may see the money applied collectively to any refund they are due or payment they owe. The refund does not count as state taxable income, however, the funds would count as taxable income for federal income taxes.
Why Did Georgia Reach a Surplus of Funds?
At the end of the 2021 fiscal year (ending June 30), the state of Georgia had a historic surplus of $3.7 billion, which is the source of the Bill’s funding. The surplus reached the legal limit to fill the state’s rainy day fund, leaving $2.3 billion in undesignated surplus. In addition to the Bill, Kemp is also using some of the funds to implement a gas tax holiday.
View House Bill 1302’s FAQs.
For more information, contact your Windham Brannon advisor, or reach out to Tim Clancy.
