2023 CODE OF GEORGIA › Title 48 - REVENUE AND TAXATION (§§ 48-1-1 — 48-18-1) › Chapter 7 - INCOME TAXES (§§ 48-7-1 — 48-7-170) › Article 2 - IMPOSITION, RATE, AND COMPUTATION; EXEMPTIONS (§§ 48-7-20 — 48-7-42) › Section 48-7-29.16 - [Effective 1/1/2025] Tax credits for contributions to student scholarship organizations

(a)
As used in this Code section, the term:
(1)
"Business enterprise" means any insurance company or the headquarters of any insurance company required to pay the tax provided for in Code Section
33-8-4
.
(2)
"Eligible student" shall have the same meaning as in paragraph (1) of Code Section
20-2A-1
.
(3)
"Qualified education expense" means the expenditure of funds by the taxpayer or business enterprise during the tax year for which a credit under this Code section is claimed and allowed to a student scholarship organization operating pursuant to Chapter 2A of Title 20 which are used for tuition and fees for a qualified school or program.
(4)
"Qualified school or program" shall have the same meaning as in paragraph (2) of Code Section
20-2A-1
.
(5)
"Student scholarship organization" shall have the same meaning as in paragraph (3) of Code Section
20-2A-1
.
(b)
An individual taxpayer shall be allowed a credit against the tax imposed by this chapter for qualified education expenses as follows:
(1)
In the case of a single individual or a head of household, the actual amount expended or $2,500.00 per tax year, whichever is less;
(2)
In the case of a married couple filing a joint return, the actual amount expended or $5,000.00 per tax year, whichever is less; or
(3)
Anything to the contrary contained in paragraph (1) or (2) of this subsection notwithstanding, in the case of an individual who is a member of a limited liability company duly formed under state law, a shareholder of a Subchapter "S" corporation, or a partner in a partnership, the amount expended or $25,000.00 per tax year, whichever is less; provided, however, that tax credits pursuant to this paragraph shall only be allowed for the portion of the income on which such tax was actually paid by such member of the limited liability company, shareholder of a Subchapter "S" corporation, or partner in a partnership.
(c)
A corporation or other entity shall be allowed a credit against the tax imposed by this chapter for qualified education expenses in an amount not to exceed the actual amount expended or 75 percent of the corporation's income tax liability, whichever is less.
(c.1)
A business enterprise shall be allowed a credit against the tax imposed by Code Section
33-8-4
in an amount equal to its qualified education expenses or 75 percent of the business enterprise's state insurance premium tax liability owed pursuant to Code Section
33-8-4
, whichever is less; provided, however, that the amount of such credit shall not exceed $1 million.
(d)
(1)
The tax credit shall not be allowed if the taxpayer or business enterprise designates its qualified education expense for the direct benefit of any particular individual, whether or not such individual is a dependent of the taxpayer or business enterprise.
(2)
In soliciting contributions, a student scholarship organization shall not represent, or direct a qualified private school to represent, that, in exchange for contributing to the student scholarship organization, a taxpayer or business enterprise shall receive a scholarship for the direct benefit of any particular individual, whether or not such individual is a dependent of the taxpayer or business enterprise. The status as a student scholarship organization shall be revoked for any such organization which violates this paragraph.
(e)
In no event shall the total amount of the tax credit allowed to any taxpayer or business enterprise under this Code section for a taxable year exceed such taxpayer's income tax liability or such business enterprise's state insurance premium tax liability owed pursuant to Code Section
33-8-4
, provided that any unused tax credit shall be allowed the taxpayer or business enterprise against up to its succeeding three years' tax liability. No such credit shall be allowed the taxpayer or business enterprise against prior years' tax liability.
(f)
(1)
The aggregate amount of tax credits allowed under this Code section shall not exceed:
(A)
Fifty-eight million dollars for the year ending on December 31, 2018;
(B)
For 2019 through 2022, $100 million per year; and
(C)
For 2023 and all subsequent years, $120 million per year.
(1.1)
In no event shall the aggregate amount of tax credits allowed under this Code section to all business enterprises for state insurance premium tax liability owed pursuant to Code Section
33-8-4
exceed $6 million for any year.
(2)
The commissioner shall allow the tax credits on a first come, first served basis.
(3)
For the purposes of paragraph (1) of this subsection, a student scholarship organization shall notify a potential donor of the requirements of this Code section. Before making a contribution to a student scholarship organization, the taxpayer or business enterprise shall electronically notify the department, in a manner specified by the department, of the total amount of contributions that the taxpayer or business enterprise intends to make to the student scholarship organization. The commissioner shall preapprove, deny, or prorate the requested amount within 30 days after receiving the request from the taxpayer or business enterprise and shall provide notice to the taxpayer or business enterprise and the student scholarship organization of such preapproval, denial, or proration which shall not require any signed release or notarized approval by the taxpayer or business enterprise. In order to receive a tax credit under this Code section, the taxpayer or business enterprise shall make the contribution to the student scholarship organization within 60 days after receiving notice from the department that the requested amount was preapproved. If the taxpayer or business enterprise does not comply with this paragraph, the commissioner shall not include this preapproved contribution amount when calculating the limit prescribed in paragraph (1) of this subsection or the additional limitation specific to business enterprises prescribed in paragraph (1.1) of this subsection. The department shall establish a web based donation approval process to implement this subsection.
(4)
Preapproval of contributions by the commissioner shall be based solely on the availability of tax credits subject to the aggregate total limit established under paragraph (1) of this subsection or the additional limitation specific to business enterprises prescribed in paragraph (1.1) of this subsection. The department shall maintain an ongoing, current list on its website of the amount of tax credits available under this Code section.
(5)
Notwithstanding any laws to the contrary, the department shall not take any adverse action against donors to student scholarship organizations if the commissioner preapproved a donation for a tax credit prior to the date the student scholarship organization is removed from the Department of Education list pursuant to Code Section
20-2A-7
, and all such donations shall remain as preapproved tax credits subject only to the donor's compliance with paragraph (3) of this subsection.
(6)
In addition to the reporting requirements in Code Section
20-2A-3
, each student scholarship organization shall file an annual report with the department showing any fees or assessments retained by the student scholarship organization during the calendar year.
(g)
(1)
In order for the taxpayer to claim the student scholarship organization tax credit under this Code section, a letter of confirmation of donation issued by the student scholarship organization to which the contribution was made shall be attached to the taxpayer's tax return or a business enterprise's tax return provided for in Code Section
33-8-6
.
(2)
(A)
However, in the event the taxpayer files an electronic return permitted by this chapter, such confirmation shall only be required to be electronically attached to the return if the Internal Revenue Service allows such attachments when the data is transmitted to the department. In the event the taxpayer files an electronic return and such confirmation is not attached because the Internal Revenue Service does not, at the time of such electronic filing, allow electronic attachments to the Georgia return, such confirmation shall be maintained by the taxpayer and made available upon request by the commissioner.
(B)
With respect to a business enterprise's tax return provided for in Code Section
33-8-6
, the Commissioner of Insurance is authorized to promulgate rules and regulations regarding the manner in which such letters of confirmation of donations shall be filed in the case of tax returns filed electronically.
(3)
The letter of confirmation of donation shall contain the taxpayer's or business enterprise's name, address, tax identification number, the amount of the contribution, the date of the contribution, and the amount of the credit.
(h)
(1)
No credit shall be allowed under this Code section with respect to any amount deducted from taxable net income by the taxpayer or business enterprise as a charitable contribution to a bona fide charitable organization qualified under Section 501(c)(3) of the Internal Revenue Code.
(2)
The amount of any scholarship received by an eligible student or eligible pre-kindergarten student shall be excluded from taxable net income for Georgia income tax purposes.
(i)
The commissioner shall be authorized to promulgate any rules and regulations necessary to implement and administer the tax provisions of this Code section.
Amended by 2024 Ga. Laws 598,§ 1-7, eff. 1/1/2025, app. only to unused tax credits generated during taxable years beginning on or after 1/1/2025.
Amended by 2023 Ga. Laws 353,§ 7, eff. 7/1/2023.
Amended by 2022 Ga. Laws 722,§ 2-1, eff. 1/1/2023, app. to all taxable years beginning on or after 1/1/2023.
Amended by 2018 Ga. Laws 424,§ 1, eff. 5/7/2018.
Amended by 2013 Ga. Laws 335,§ 33D, eff. 5/7/2013.
Amended by 2011 Ga. Laws 170,§ 2, eff. 7/1/2011.
Amended by 2009 Ga. Laws 174,§ 6, eff. 5/5/2009.
Added by 2008 Ga. Laws 773,§ 2, eff. 5/14/2008.
This section is set out more than once due to postponed, multiple, or conflicting amendments.