How to receive

Georgia taxpayers can take advantage of a little-known tax credit that can provide up to $5,000. Georgia’s new tax credit is for taxpayers who help youth leave the foster care system. This credit is part of the Fostering Success Act (FSA) (House Bill 424), which the General Assembly approved in 2022.

Georgia’s New Tax Credit – How Does It Work?

HB424 establishes the Qualified Foster Child Donation Credit Program, which allows taxpayers to dedicate a portion of their income to organizations that provide support services to young people seeking to move out of foster care and start a new life.

Under this program, Georgia taxpayers can receive a tax credit of up to $2,500 on the dollar, and couples can receive up to $5,000 per year for their contributions to the program. Additionally, corporate contributions are limited to 10% of the company’s annual tax liability.

Taxpayers must electronically notify the State Department of Revenue of the total contribution they intend to make to an eligible organization. Within 30 days of receiving a request from a taxpayer, the department must approve or deny the request based on whether new tax credits are available in Georgia.

Taxpayers must donate the approved amount to an eligible organization within 60 days of receiving approval or by December 31, whichever comes first.

How much funding is available?

Last year, lawmakers approved $20 million for the program. This year, a bill was proposed to increase the tax credit to $30 million, but it was defeated due to differences of opinion in the House and Senate. Therefore, the annual limit remains at $20 million. As of March last year, authorities had approved $153,000 for the 2024 tax year.

The number of eligible organizations participating in the program increased from 20 last year to 39 this year. Funds for these organizations will be used for all types of needs, including tuition, books, food, transportation, medical care, and more.

“Funds will be carefully screened and distributed directly to accountable organizations to young people actively enrolled in Georgia public colleges or career training programs,” the program website states.

It is estimated that approximately 700 young people are removed from Georgia’s foster care system each year. Most of them have no family to return to. Data from several studies also show that most young people who leave foster care end up homeless or fall victim to human trafficking. There are currently more than 11,000 children in foster care in Georgia.

In separate news, CareSource, a mission-driven managed care plan, announced in February of this year that it was investing $1 million in the Fostering Success Act (FSA). The investment will be used for the betterment of Georgia families.

Additionally, this investment will benefit the youth population in foster care who are eligible to enroll in the state’s family managed care plan or Medicaid fee-for-service.