This opportunity expired on June 1, 2021, less than four weeks after House Bill 451 was signed. 14 Taxpayers were required to file an Application For Freeport Inventory Exemption (PT50PF) to obtain the benefit, ranging from 50% to 100% depending upon the date on which the application was made. The bill allows for a freeport exemption for those who claimed an exemption to finished goods inventory in 2020 to apply for their 2021 exemption based on fair market value as of either Jan. House Bill 451 provided a very brief, yet significant opportunity for taxpayers utilizing the freeport exemption to determine the amount based on the current or prior year fair market value. 12 An additional $2,000 credit per taxable year is available thereafter until the child reaches the age of 18. The bill increases the amount from $2,000 to $6,000 per qualified foster child per year for the first five years beginning in the year in which the adoption becomes final. House Bill 114 revises the Georgia Code relating to the tax credit for adoption of foster children for the 2021 tax year and thereafter. 10 The legislation increases the standard deductions from $4,600 to $5,400 for single or head of household filers, from $3,000 to $3,550 for married taxpayers filing separately, and from $6,000 to $7,100 for married taxpayers filing jointly. ![]() House Bill 593, the Tax Relief Act of 2021, revises the standard deductions applicable to tax years beginning on or after Jan. 9 The legislation was effective April 29, 2021, and applies only to proceedings commenced on or after such date. ![]() Similar language was added to matters relating to refunds, appeals, payments, and bonds, as well as the conduct of trials, evidence, and recordings. The legislation provides that “all questions of law decided by a court or the Georgia Tax Tribunal on matters arising from the state board of equalization and matters arising from refunds and appeals of state administration of Title 48 be decided without deference to determinations or interpretations of the Department of Revenue except without any effect on the judicial standard of deference.” 8 The text specifically mentions deference regardless of whether the Department’s guidance is written or unwritten. Senate Bill 185 significantly alters state tax litigation matters by reducing the amount of deference afforded to decisions and interpretations by the Department. 6 Instead, the income that is taxed under the PTE tax is excluded from the calculation of taxable net income for the individuals. 5 The legislation provides that resident partners and shareholders of electing entities are not permitted a credit for taxes paid under the new PTE tax. 4 The electing entity will pay a 5.75% tax on its Georgia taxable income under current rules, less any deduction for income and gross receipts taxes. 1, 2022, S corporations and partnerships may make an annual irrevocable election to be taxed at the entity level on or before the due date of the return, including extensions. ![]() ![]() With the enactment of House Bill 149, Georgia joins many other states providing for an optional PTE tax for flow-through entities. For businesses, both loans forgiven under the PPP and amounts used to pay qualifying expenses are excluded from the calculation of Georgia taxable income. 3 As a result, cancellation of indebtedness income resulting from a loan forgiven under the Paycheck Protection Program (PPP) is exempt from the Georgia corporate income tax and the personal income tax to the same extent as for federal purposes. 2 This conformity update did not include any addition or removal of legacy decoupling provisions addressing federal tax provisions including bonus depreciation, interest expense limitation and net operating loss carrybacks.īased on the update in conformity to the IRC, Georgia now conforms to both the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Consolidated Appropriations Act (CAA). 1, 2020, House Bill 265 updates Georgia’s tax statute to conform to changes made to the IRC through Jan. 1įor tax years beginning on or after Jan. In addition to Georgia’s annual effort to conform its income taxes to recent changes in the Internal Revenue Code (IRC), the state has created an elective pass-through entity (PTE) tax regime, adopted a policy directing courts and the Georgia Tax Tribunal to eschew deference to decisions and interpretations by the Georgia Department of Revenue, and enhanced, renewed and restated several credit programs. The 2021 Georgia legislative session produced sweeping changes to personal and business income taxes on a variety of fronts.
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