Georgia’s Tax Credit Secret: The Qualified Foster Child Donation

Woman using calculator to file taxes

Georgia’s Tax Credit Secret: The Qualified Foster Child Donation

by: Mina Holliday, CPA
Adapted for CHRIS 180 by Lisa Schnaubelt, CFRE, Director of Development

Many thanks to our amazing community partner Smith + Howard for writing this blog post outlining the 2023 Georgia Qualified Foster Child Donation Tax Credit. Read on to learn what it is, how you could implement it and support CHRIS 180’s work. If you would like to support CHRIS 180 through a tax credit, click here or contact your tax or financial advisor to address your personal situation.

Georgia taxpayers have enjoyed the opportunity to take advantage of several tax credit opportunities in recent years. In 2023, several new tax credits were launched, including the Georgia Qualified Foster Child Donation Tax Credit, which allows taxpayers to direct their tax dollars to qualified organizations that support foster children, like CHRIS 180. To date, this credit has received relatively little publicity, and as a result, close to 95% of the available funding remains unused as we enter the last quarter of the year.

At Smith + Howard, we work closely with organizations that do extremely important work in our community and stand to benefit from this tax credit. Today, we’re spotlighting CHRIS 180 and the work they do, while outlining exactly how Georgia taxpayers can apply for this tax credit.

Connecting the Qualified Foster Child Credit to CHRIS 180

CHRIS 180’s history began in 1981 with filling a need in the foster care system – children with mental health diagnoses and with more acute needs were not receiving the support they needed at the most critical time in their lives.

CHRIS 180 focuses on supporting children and families who have experienced trauma, providing no-cost trauma-informed mental healthcare and wrap around services. Plus, they are the first and longest-standing nonprofit in Atlanta to address the challenges that LGBTQ+ children and youth face.

Here’s what a Smith + Howard colleague had to say about CHRIS 180:

“CHRIS 180 operates out of my neighborhood. In a way, this makes me appreciate their work even more than I already did. Their focus on trauma-informed health services is vital, as in far too many instances, foster children’s trauma is ignored and overlooked.

Near and dear to my heart is their work with homeless youth in the LGBTQ+ community. Children in this community are far more likely to end up homeless and are at greater risk of sex trafficking. As someone whose family was not accepting of their orientation, this work hits home.”

Click here to learn more about supporting CHRIS 180’s work. Click here to learn more about the Qualified Foster Child Donation credit.

An Overview of the Qualified Foster Child Donation Credit in Georgia

Taxpayers receive a dollar-for-dollar reduction in their state tax liability. Taxpayer’s tax liability remains unchanged – however, both individuals and businesses can use this credit to direct their tax dollars to support causes close to their hearts.

The Qualified Foster Child Donation (QFCD) Credit, also known as the Fostering Success tax credit, allows Georgia taxpayers to direct their state income and pass-through entity tax dollars toward organizations assisting children in foster care across Georgia.

Taxpayers are actively using credits like this one, but many are unaware of the QFCD, which has received little media coverage.

$20 million is available for taxpayers to direct towards qualified foster child organizations like CHRIS 180, but as of 9/29/23, just over $1 million of the funds set aside had been claimed. The application process is simple. If you’re interested, continue reading to learn how you can support organizations doing important work across Georgia or contact your tax or financial advisor.

How to Apply for the Georgia Qualified Foster Child Donation Credit

The process of applying to use the QFCD is relatively straightforward.

Taxpayers must apply for pre-approval through the Georgia Tax Center website. At this stage, they specify the amount they would like to apply for and the qualified organization they would like to donate to. Currently, approvals take around a week to process, after which point, the taxpayer can directly send funds to the qualified organization.

The taxpayer sends funds directly to the chosen foster care organization and they will receive a form acknowledging their contribution in return. Taxpayers will then attach a form reporting their donation to their state tax return. It’s a simple process that’s designed to make it easy for taxpayers to support causes close to their heart.

During the first six months of the year, there are limits to the credits that can be sought. After June 30, as tax credits remain available, approved individual taxpayers are permitted to make unlimited contributions to qualified entities in return for a corresponding 100% Georgia income tax credit.

For the period beginning on January 1 and ending on June 30 of each year, the following limits apply:

• Individual Filer – up to $2,500
• Married Filing Jointly – up to $5,000
• C Corporation, Trust, or Pass-Through Entity electing to pay tax at entity level – up to 10% of Georgia Tax Liability
• Individual Owner of S-Corp, LLC, or Partnership (Pass-Through Entity) NOT paying tax at entity level – up to $5,000

By leveraging the QFCD, taxpayers can support organizations doing extremely important work with children in their communities. At Smith + Howard, we’re proud to work with these organizations, including CHRIS 180.

Explore Tax Credit Opportunities with Your Financial Advisor

There are a wide range of opportunities, like the QFCD outlined here, to explore with your Financial Advisor. To learn more about how you can redirect your Georgia tax dollars to causes close to your heart, contact Smith + Howard or your financial advisor today!

Jade Woods
[email protected]
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