Anti-abortion activists demonstrate at the Supreme Court of the United States in Washington on June 13, 2022.
Evelyn Hockstein | Reuters
Georgia residents can now claim embryos as dependents in their state income tax returns.
According to the IRS, any “unborn child with a detectable heartbeat” may be eligible for a $3,000 state income tax deductibility for 2022. This deduction will take effect July 20, guidanceReleased by the Department of Revenue of the state.
This announcement comes after the U.S. Supreme Court ruled to overturn Roe v. Wade. This effectively ends the federal right of abortion and triggers bans in Georgia as well as elsewhere.
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While it’s not clear whether other states will follow, there is a tendency for jurisdictions to copy each other, according Richard Auxier of the Urban-Brookings Tax Policy Center.
He stated, “It’s an anti-abortion piece” of legislation, explaining why the tax break won’t support most low-income families.
Auxier said that tax deductions are usually less valuable than credit because they are harder to claim and that many filers opt for the standard deduction over itemizing.
Although anyone can claim an exemption for unborn children, Georgia’s standard deduction reduces the value for families with low or zero taxable income.
“There is no benefit for most low-income families,” he stated. “And for all the rest, we’re speaking tens of thousands of dollars.”
Although the announcement is brief, it leaves many unanswered queries among tax professionals.
Adam Markowitz, an agent and vice president at Howard L Markowitz PA CPA, stated that “this is a situation in which we may have to have some really really, really uncomfortable discussions, especially if things didn’t go well.”
Financial experts have asked about which parent can claim the deduction and what happens to multiple births or if the miscarriage occurs.
Markowitz said, “It’s the tax person’s nightmare.”
Auxier stated that the policy raises questions about the definition of “dependents” in tax policy, since it doesn’t reflect how many families look.
He stated that it could be difficult to determine who benefits if unmarried parents live in separate households.
According to the guidance, “relevant medical records” and other “supporting documentation” must all be provided to the Department of Revenue upon request. However, it is not clear exactly what might be required.
Auxier stated that families with high incomes have the resources to ask their primary care physicians for supporting documents. “But most families don’t have the money or time to schedule another appointment.
According to the Georgia Department of Revenue, more information about the tax break for unborn children with detectable heartbeats will be available in the coming months.