Childcare just got cheaper in Georgia. A new law gives parents a tax credit
Gov. Brian Kemp recently signed a bill that will offer tax relief to families in an effort to help with expenses associated with raising young children.
House Bill 136 will introduce a $250 state tax credit for each child under the age of six, WABE reported last week.
The Senate Study Committee on Access to Affordable Childcare recommended the bill.
Lt. Gov. Burt Jones said in a press release in April, “I want to thank the Georgia General Assembly for taking final action on a priority that will help working families across Georgia.”
What the law does
Under HB 136, starting with the 2026 tax year, parents and legal guardians can begin to claim the credit for children under 6 years old.
There are some stipulations:
It is only available to one parent or guardian per child
Applies only if the child lived with them for more than half the taxable year.
It is designed to complement the existing federal child tax credit, providing additional support for families with young children.
It differs from previous credits in a few ways:
It boosts the existing state tax credit for child and dependent care expenses.
Families paying for daycare or similar services could see a larger reduction in their state tax bill.
It raises the match of the federal credit for expenses to 50%, where it was previously 30%.
HB 136 offers some employer incentives
The law also includes incentives for businesses to help employees with childcare costs.
Starting in 2026:
Employers can claim a $1,000 tax credit per child in the first year and $500 per child in subsequent years.
Total credits are capped at $20 million per year, and businesses must apply through the Department of Early Care and Learning
Why the new law matters for Georgia taxpayers
The new law is part of a broader effort to support Georgia’s workforce and make the state more attractive for families and businesses.
“This legislation ... ensures that Georgia’s families have access to affordable and quality childcare, while encouraging more businesses to offer childcare,” Jones said
The law takes effect July 1, 2025, but families will first claim the credits when filing taxes in 2027 for the 2026 tax year
For families these changes could produce significant, positive changes in the cost of living, and provide further support for working parents in Georgia.
What are your thoughts about the new tax credit for parents? Email me at srose@ledger-enquirer.com or find me on social media.
This story was originally published May 21, 2025 at 9:22 AM with the headline "Childcare just got cheaper in Georgia. A new law gives parents a tax credit."
