House bill 424

Signed by Governor Brian Kemp on May 9, 2022, and effective on July 1, 2022, the Fostering Success Act awards Georgia income tax credits to individual and corporate taxpayers who donate to a Qualified Foster Child Support Organization.

The following summarizes key definitions, deliverables, and deadlines contained within House Bill 424, as passed in the House and Senate:

  • Aging Foster Children are defined as foster children aged 16 through 18, and former foster children up to 25 years of age, who have not been adopted or reunited with families
  • Foster Child Support Organizations include:
  • The aging-out program of either the Technical College System of Georgia Foundation or University System of Georgia Foundation
  • Any domestic 501(c)(3) nonprofit corporation that has the primary function of operating an aging-out program or operating/supporting a Georgia licensed child-placement agency
  • Qualified Contributions means the pre-approved contribution of funds made during the taxable year by a taxpayer to a Qualified Organization under the terms and conditions of the Fostering Success Act
  • Qualified Expenditures include:
  • Costs associated with tuition waivers
  • Wraparound services for individuals attending a public postsecondary education institution under a waiver
  • Mentorship services provided to aging foster children, provided no mentor shall be compensated in excess of $100 per month for an aging out foster child or $500 per year for any aging out foster child
  • Qualified Organization means a foster child support organization that has been certified and listed on the Georgia Department of Revenue’s website
  • Wraparound Services means services provided directly to aging foster children to support their education through Georgia postsecondary education services, housing services, vocation services, medical services, counseling services, mentorship services, nutrition services, transportation services, or up to $150 per month in direct cash payments for use on personal necessities
  • The aggregate amount of tax credits allowed under this Code shall not exceed $20 million per calendar year
  • The Georgia Department of Revenue shall maintain a web-based application process for the purpose of certifying Foster Child Support Organizations as qualified organizations
  • Prior to making a contribution to a qualified organization, the taxpayer shall electronically notify the Georgia Department of Revenue of the total amount of contribution such taxpayer intends to make to a Qualified Organization
  • Within 30 days of receiving a taxpayer’s request, the commissioner shall preapprove, deny, or prorate requested amounts on a first come, first serve basis based on the availability of the tax credits
  • Within 60 days after receiving the preapproval notice or by December 31st of the tax year (whichever comes first), the taxpayer shall contribute the preapproved amount to the Qualified Organization designated on their application, or the preapproval will expire
  • Each Qualified Organization shall issue a letter of confirmation to each contributor, to include the taxpayer’s name, address, tax ID number, date and amount of contribution, and the total amount of the credit allowed
  • To claim the tax credit, the taxpayer should attach all letters to their tax return
  • No later than May 15 of each year, each Qualified Organization shall submit:
  • A complete copy of its IRS Form 990 to the Georgia Department of Revenue
  • A report detailing the contributions received during the calendar year
  • By April 1 each year, each Qualified Organization shall publicly post on its website a copy of its prior year’s annual budget, including the total of all funds received from all sources
  • Taxpayers are not allowed to designate or direct their contributions to any particular purpose or for the direct benefit of any particular individual, nor shall they receive any benefit
  • Taxpayers that owns, operates, or is a subsidiary of any entity that contracts directly with a Qualified Organization is not eligible for tax credits
  • Any Qualified Organization that fails to comply with any of the requirements under the Code will be given written notice and have 90 days to comply; failure to correct all deficiencies within 90 days will result in revocation of its status as a Qualified Organization
  • In no event shall the total amount of the tax credit exceed the taxpayer’s income tax liability

Beginning January 1, 2023, Georgia tax filers can apply to receive 100 percent tax credit for donations made to qualified foster support organizations.