On May 11, 2022 the Georgia Department of Revenue began issuing one-time tax refunds as authorized by House Bill 1302. This legislation allows for an additional refund of income taxes from 2020, due to the state experiencing a revenue surplus. Single filers and married individuals who file separately were able to receive a maximum refund of $250. Head of household filers received a maximum refund of $375. And married individuals who file joint returns were able receive a maximum refund of $500. The refund amount was based on an individual’s tax liability. In order to qualify for the refund taxpayers needed to (1) be a full-year Georgia resident in 2020 and 2021, and (2) to have filed both their 2020 return and their 2021 return by the deadline for filing the 2021 return (including any extension granted by the Department of Revenue). Additionally, if a taxpayer owed less than the maximum amounts listed above, they would only receive a refund for the amount of their actual tax liability.
FEDERAL INCOME TAX:
- If you took the Standard Deduction:
- Then the payment is NOT included in income on your federal tax return.
- If you claimed Itemized Deductions:
- If you claimed a deduction for state income tax payments and did NOT reach the $10,000 deduction limit, then the payment IS included in income on your federal tax return.
- If you claimed a deduction for state income tax payments and reached the $10,000 deduction limit, then the amount that you could not claim is NOT included in income on your federal tax return. (i.e., if deductions over the $10,000 limit exceeded the amount of refund, then full amount is not taxable. If the deductions over the $10,000 limit were not in excess of the amount of the refund, then only the portion that exceeded the $10,000 limit are excluded from income on your federal income tax return.)
STATE INCOME TAX:
H.B. 1302 provided that these tax refunds are not to be included in taxable income for purposes of filing your state taxes. If state income tax refunds, including the special refund, are included in your federal taxable income, subtract them on line 12 adjustment on the schedule 1 on form 500.
If you should have any questions related to the one time tax refund or need help determining if the refund you received is subject to federal income taxes please contact us at (404) 365-5682.