Georgia taxpayers have access to a lesser-known tax credit that can provide up to $5,000. This new credit is designed to support young adults transitioning out of the foster care system and is part of the Fostering Success Act (FSA) – House Bill 424, which was approved by the state General Assembly in 2022.
Understanding the Tax Credit
House Bill 424 introduced the Qualified Foster Child Donation Credit program, allowing taxpayers to direct a portion of their income to organizations that assist young adults leaving foster care. Under this program, individual taxpayers can receive a dollar-for-dollar tax credit of up to $2,500, while couples can claim up to $5,000 annually. Corporate donations are limited to 10% of the company’s annual tax liability.
To participate, taxpayers must notify the state Department of Revenue electronically of their intended contribution to a Qualified Organization. The department has 30 days to approve or deny the request based on the availability of the tax credit. After receiving approval, taxpayers have 60 days, or until December 31 (whichever comes first), to contribute the approved amount to the Qualified Organization.
Funding Availability
Last year, $20 million was allocated to the program. Although there was an attempt to increase the tax credit to $30 million, it was unsuccessful, leaving the annual cap at $20 million. As of March last year, $153,000 had been approved for the 2024 tax year.
The number of qualified organizations participating in the program has grown from 20 to 39. These funds will support various needs such as tuition, books, food, transportation, and healthcare. According to the program’s website, funds are distributed to vetted, accountable organizations that provide direct support to young people enrolled in Georgia’s public colleges or vocational training programs.
Each year, around 700 young adults age out of Georgia’s foster care system, many without a family to turn to. Studies show that a significant number of these individuals face homelessness or fall victim to human trafficking. Currently, Georgia has over 11,000 children in foster care.
In related news, CareSource, a mission-driven managed care plan, announced a $1 million investment in the Fostering Success Act (FSA) earlier this year, aimed at supporting Georgia families and benefiting young adults in foster care who may be eligible for the state’s managed care plan or Medicaid Fee-for-Service.