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Tax Surplus Refunds Are Due out This Month. Here’s How Much You’re Getting.

Kemp signed legislation that will return a total of more than $1 billion to Georgia taxpayers.

In March, Gov. Brian Kemp signed legislation into law that will return more than $1 billion to Georgia taxpayers in the form of one-time tax rebates. (Getty Images)

Rising inflation has made it harder for many Georgians to pay their bills this year, but some are about to receive a tiny bit of economic relief from state government.

On March 23, Gov. Brian Kemp signed legislation into law that will return a total of more than $1 billion to Georgia taxpayers in the form of one-time tax rebates.

The measure, known as House Bill 1302, was passed by both chambers of the Georgia General Assembly earlier the same month.

Here’s a breakdown of who should expect checks, and how the tax surplus refund will be administered.

Who gets a refund, and when?

Georgia taxpayers who previously filed income tax returns for both 2020 and 2021 should receive the one-time tax rebate, according to the law’s text and the state Department of Revenue.

“The expected timeline for refunds to begin being issued is 6-8 weeks from the date the bill was signed into law,” the Georgia Department of Revenue said via email.

That means eligible Georgia residents should receive some of their own money back from the state some time between now and May 18. 

How much is the refund, and how do you get it?

It depends on an individual’s tax-filing status. Single taxpayers and married taxpayers who filed separate returns will receive $250. Married couples who filed joint returns will receive $500.

Those payments will be made electronically to people’s bank accounts or via checks in the mail, depending on how they filed their taxes. Individuals who owe taxes, however, could have their rebate applied to their outstanding balance before receiving a payout for whatever is left.

Why was there a tax surplus anyway?

The tax surplus happened for two reasons: less government spending and more tax revenue than expected. 

Georgia’s economic prospects didn’t look so good during the spring of 2020 after COVID-19 spread across the state and the nation.

The dire circumstances motivated state lawmakers to cut Georgia’s 2021 fiscal year budget by about 10%, or roughly $2 billion. Kemp signed the reduced budget into law on June 30, 2020.

“These are challenging times, and the budget reflects that reality,” Kemp said at the time.

But Georgia’s economy bounced back quicker than many expected, due in part to federal pandemic relief funds authorized by Congress

Georgia finished the 2021 fiscal year, which began in July 2020 and ended last year on June 30, with a $3.7 billion tax surplus, according to a State Accounting Office report.

“That did make a difference for a lot of states in terms of their end-of-year budgets,” said Janelle Cammenga, policy analyst for the Tax Foundation’s Center for State Tax Policy. The foundation is a nonprofit tax policy research organization based in Washington, D.C.

Georgia received $4.1 billion through the CARES Act passed by Congress in March 2020 and signed into law by former President Donald Trump.

The state received an estimated total of $17.4 billion from the American Rescue Plan passed by Congress in March of last year, according to recent projections from the Governor’s Office of Planning and Budget.

Is this happening in other states?

Georgia is one of nine states to issue one-time tax rebates in response to pandemic-related tax revenue surpluses, according to Richard C. Auxier, senior policy associate at the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution..

While budget surpluses are common, Auxier said the size of this year’s surpluses — in Georgia and most other states — is unusual. That’s due to unexpected economic growth, an atypically large amount of pandemic aid funds from the federal government, and tax contributions from wealthy people who fared better during the pandemic. 

“Now that those policies are expiring, and the emergence of other economic problems like inflation and the war in Ukraine, there is a chance the budget situation will look very different and possibly much worse in the near future,” Auxier said

Has this happened in Georgia before?

It’s unclear whether Georgia has ever had a tax surplus of this size, according to Chris Denson, director of policy and research at the Georgia Public Policy Foundation.

“I’m unaware of … a surplus of this magnitude, nor am I aware of any similar tax rebate,” Denson told Capital B Atlanta.

Much of Georgia’s surplus money was added to the state’s rainy day fund, but roughly $2.2 billion in surplus remained after Georgia’s savings account was filled to the maximum legal limit of $4.3 billion.

How does it affect Black taxpayers in the state?

Tax rebates have received a lot of media coverage this year, but Auxier said Georgia’s recent tax rate cut is more consequential for households of color.

The measure, known as HB 1437, would establish an immediate flat tax of 5.49% in less than two years and create a flat state income tax of 4.99% by 2029 or later. The new law will effectively cut tax revenue by more than $1 billion.

“That will permanently lower the amount of revenue Georgia collects,” Auxier said. “If revenue falls, then the state will face challenging choices on spending cuts or tax increases. … Most Black and Latino households in Georgia will not earn enough to benefit significantly from the tax rate cut.”