April 24, 2023
For the second time in two years, certain Georgia individuals and families, will be receiving a special tax refund. On March 15, 2023, Governor Kemp signed House Bill 162 into law which calls for a refund to be issued to those that filed a state tax return in both 2021 and 2022. The refund is possible due to the state’s conservative budgeting and spending over the last year. The refund amount will vary depending on filing status with married filing jointly receiving the largest amount while married filing separately the lowest amount. It is expected the refund will be issued no later than July 1st for those who filed by the April 18th deadline. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.
Taxpayers that have filed an individual state return for both the 2021 and 2022 tax year by April 18th, 2023, or those that have been granted an extension, are considered eligible. It is important to note there are several exemptions to consider. Nonresident aliens, estates and trusts, and an individual who was claimed as a dependent in the 2021 tax year for either federal or state tax purposes is not eligible.
The refund amount is determined by taking the lessor of the 2021 individual income tax liability as reported on Line 16 of the 2021 Georgia Form 500, Line 4 of the 2021 Georgia Form 500EZ, or the pre-determined amount based on taxpayer filing status. In the case of a single or married filing separately the amount is $250, head of household $375, and for married filing jointly $500.
There is one important exception that will only apply in a small number of cases. The amount of the refund cannot exceed the taxpayer’s reported individual income tax liability. Therefore, those that did not have any state income tax liability will not receive a refund.
The refund is not considered income for purpose of Georgia taxes. For those with an outstanding tax liability, the refund amount will first be applied against this balance. If there is anything remaining, it will then be sent to the taxpayer. In addition, no interest will accrue on refund payments. Finally, the method of disbursement, electronic or paper check, will be based on instructions provided with the 2022 state return.
The Georgia Department of Revenue is expected to publish a Frequently Asked Questions page, which will include a refund tracker feature, in the coming weeks. However, it is expected to provide similar information as the FAQ page for the 2021 special tax refund.
The opportunity to receive another tax refund is welcome news for Atlanta individuals and families. This is especially true given the recent challenges created by inflation. If you have questions about the information outlined above or need assistance with a tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.