Lt. Gov. Burt Jones pushes to expand child care tax credits in Georgia

ATLANTA - Georgia’s Lt. Gov. Burt Jones is renewing a push to expand child care tax credits.

The new bill, sponsored by Sen. Brian Strickland (R – McDonough), would create a state income tax credit of up to $250 for every child under age 7 and expand an existing tax credit for child care to give parents up to $300 more per child.

What we know:

Tax credits allow someone to reduce their tax bill by up to the full value of the credit, and are more valuable than a tax deduction. However, in Georgia, tax credits can only be used up to the limit of someone’s tax bill. A taxpayer who owes little or no state income tax can’t get money back. 

There’s already a federal child tax credit of up to $2,000 per child for those under 17, but Georgia has not had its own credit. Staffers for Jones said a formal estimate of how much tax revenue the state would give up hasn’t yet been requested, but based on an estimate for a different child tax proposed by House Democratic Minority Leader Carolyn Hugley of Columbus, Jones’ proposal could cost $100 million to $200 million.

Right now, Georgia’s existing child care tax credit lets taxpayers take a credit of up to 30% of the amount they can get off from their federal income taxes for qualifying child care expenses. The federal ceiling is $3,000 per child, which means the Georgia ceiling is $900 per child. Jones’ plan would increase that to 40% of the federal ceiling, or a maximum of $1,200. That would cost an estimated $10 million to $15 million more a year over the $40 million in revenue the state already gets, according to Jones’ office.

The Jones plan would also increase the tax benefits for employers when they invest in building, remodeling or equipping a child care center. Right now, an employer can take a credit of 50% of the spending off their corporate income tax, while the plan would increase that credit to 75%.

What they're saying:

"We must do more to ensure that Georgia’s workers have access to affordable and quality childcare," Jones said while announcing the bill. "Childcare is critical, not only for childhood development, but also for Georgia's economy. The proposed legislation will help families who are struggling to afford the cost of childcare and will encourage more businesses to offer childcare as an employee benefit. My priorities for this session are common sense and clear – supporting Georgia’s educators, businesses who employ them, and parents who are entering or already in the workforce. In Georgia, we will continue to take a strong stand to support our parents, teachers and students."

The other side:

Jones’ announcement comes after Democrats proposed even more generous breaks; a $200 child tax credit for all children under 17 and a child care tax credit worth up to the total amount a parent spends on daycare, preschool, after-school care or summer programs.

"Affordable child care is essential for working families and a strong economy," said House Democratic Whip Sam Park of Lawrenceville, a longtime proponent of more tax relief. "These tax credits ease the burden on parents, help more families access quality care, and ensure no one has to choose between work and caregiving."

What's next:

Senate Bill 89 remains in the Senate Hopper and will be assigned to a standing committee.

You can read the legislation here.