Georgia State and Local Tax (SALT) Alerts
State and Local Tax Insights
Georgia State and Local Tax Alerts – March 2021
- Governor Brian Kemp has signed legislation that updates Georgia’s Internal Revenue Code conformity to Jan. 1, 2021, with specified exceptions. For taxable years beginning on or after Jan. 1, 2020, Georgia has adopted the provisions of all federal tax acts (as they relate to the computation of federal adjusted gross income or federal taxable income for corporations) that were enacted on or before Jan. 1, 2021. In addition, for 2020, Georgia has adopted the increased Section 179 deduction of $1,040,000, as well as the $2,590,000 phaseout.
- Typos can happen to anyone. In this case, the Georgia Dept. of Revenue has amended the Timber Tax Credit, effective March 3, 2021, to correct a typo in Section (7)(a)(10) of the regulation. The date “2014” is being changed to “2024.” As corrected, the section now reads: “The actual year of completion of the replanting and/or restoration of timber must occur between 2019 and 2024.”
- Could a $140 million state income tax cut be in Georgia’s future? House Bill 593 recently passed unanimously out of a Senate Finance Committee and has moved on to the full Senate for debate. In a nutshell, the bill would increase the amount of earnings a taxpayer makes before being liable for state income taxes. The standard deduction would increase to $5,400 from $4,600 for individuals ($7,100 from $6,000 for married couples filing jointly). A major point of contention is the fact that states will lose $1 in federal aid for every state tax dollar cut through 2024. Stay tuned for additional developments.
- Are you curious to know when you might receive your Georgia state tax refund? The Georgia Dept. of Revenue said that most refunds are issued within 21 days from the date a return is received by the department. However, it may take up to 90 days to process the return. In addition, first-time filers and those who have not filed in five or more years will receive a paper refund check rather than a direct deposit. Use the “Where’s My Refund?” web tool to track your refund. Here’s the link: https://bit.ly/3bUhZ7q
- Georgia extends its individual income tax filing and payment deadline. The Georgia Dept. of Revenue announced that in conformance with the IRS, the state of Georgia is automatically extending the 2020 individual income tax filing and payment deadline from April 15, 2021, to May 17, 2021, without penalties or interest. Individual taxpayers don’t need to file forms or call the department to qualify for this automatic tax filing and payment extension. Taxpayers are encouraged to file their returns any time before the May 17 deadline.
- Even though the Georgia Dept. of Revenue has extended the tax filing and payment deadline to May 17, 2021, it’s important to understand that no extension has been provided for the filing, payment or deposit of any other type of state tax or for the filing of any state information returns. For example, state estimated income tax payments due on April 15, 2021, aren’t included in the extension. For more information: https://bit.ly/3lDHzR2
- Beginning July 1, 2021, Georgia increases the standard deduction amount for taxpayers for all taxable years beginning on or after Jan. 1, 2022. The new standard deduction amounts are: $5,400 (from $4,600) for a single taxpayer or head of household; $3,550 (from $3,000) for a married taxpayer filing a separate tax return; and $7,100 (from $6,000) for a married couple filing a joint return.
- Georgia has increased the amount of the adopted foster child credit. The credit provides that for adoptions occurring in all taxable years beginning on or after Jan. 1, 2021, the credit for the adoption of a qualified foster child is increased to $6,000 (from $2,000) per taxable year commencing with the year that the adoption becomes final. In addition, the new law, effective July 1, 2021, provides that the $6,000 credit will be for the first five taxable years, and will be $2,000 per taxable year thereafter. The foster child credit will end in the year the adopted child reaches age 18.