Will You Be Receiving a Special Georgia Tax Refund?

Thanks to a State of Georgia revenue surplus, legislators passed (and Governor Kemp signed) HB 1302, which provides Georgia taxpayers a refund of some or all of their 2020 income taxes due. Here’s what you need to know.

Determining Your Refund

Refer to your 2020 Georgia income tax return. If you filed a Form 500, the amount will be based on your tax liability listed on line 16. If you filed a Form 500EZ, the amount will be based on your tax liability listed on line 4. Tax liability is the amount of tax owed on the return before credit for any withholding, tax credits or other tax payments.

The amount you receive will depend on your filing status:

• Single filers and married individuals filing separately could receive a maximum refund of $250.
• Head of Household filers could receive up to $375.
• Married individuals filing joint returns could receive up to $500.

Note that if your tax liability in 2020 was less than the amounts listed above, you will only receive a refund for the amount of your actual tax liability. Also, you will not receive a refund if you were a dependent on another person’s return in 2020.

Eligibility for the Refund

To be eligible, you need to have filed your 2020 return and your 2021 return by the deadline for filing the 2021 return (including any extensions), which is April 18, 2022. If you were a part-year resident of Georgia, you will be eligible for a proportional refund based on your filing status and share of Georgia taxable income.

Also, any refund due would be subject to offset first against any existing liabilities you owe to the state. This includes debt collection or payments owed to the state, such as delinquent child support payments.

Receiving Your Refund

The bill was signed into law on March 23. If you filed your 2021 return recently or have not yet filed, you may receive the HB 1302 refund along with any other refund due. If your return has already been processed, you’ll receive a separate refund. The Department of Revenue will automatically deposit the refund into your bank account or mail a check if you did not request direct deposit.

For more details, visit the Georgia Department of Revenue website.

Have You Taken Your RMD?

A Required Minimum Distribution (RMD) is the minimum amount that you must withdraw from your IRA or retirement plan account each year AFTER you reach age 72 (or 70½ if you were 70½ before January 1, 2020). In a workplace retirement plan, you can delay taking your RMD if you continue working and you’re not a 5% owner. However, you are still required to take RMDs from your traditional IRAs, and SEP, SIMPLE and SARSEP IRAs even if you continue working.

If you altered taking your RMDs in 2020 due to the CARES Act or SECURE Act, you may need to consider your current status.

If you reached age 70½ in 2019, you may have waived your RMDs due in 2020. However, you did have a 2021 RMD due by December 31, 2021, based on your account balance on December 31, 2020.

If you reached age 72 in 2021 (and didn’t reach 70½ in 2019), your 2021 RMD is due by April 1, 2022, and is based on your account balance on December 31, 2020. Your 2022 RMD is due by December 31, 2022, based on your account balance on Dec. 31, 2021.

If you left your job in 2021 and rolled over your workplace retirement plan into your IRA, the RMD from your IRAs for 2021 won’t be affected by the rollover, but you may have an RMD due from the retirement plan.

• Amounts rolled over to your IRA from a workplace retirement plan in 2021 don’t affect your IRA RMD calculation since 2021 RMDs are based on your IRA account balances on December 31, 2020.
• If you have a 2021 RMD due from your workplace retirement plan, it cannot be rolled over to your IRA.

Beneficiaries of IRA accounts must follow special distribution rules, which can be confusing. The SECURE Act changed how and when beneficiaries must take distributions when the account holder dies after 2019. If you’re unsure of your status, please contact us today. Missing deadlines can be costly, but we’re here to help.