Beginning with the 2022 tax year, Georgia residents may claim a $3,000 tax exemption on their Georgia state income tax return for each qualifying “unborn” child.
On August 1, 2022, the Georgia Department of Revenue issued guidance related to Georgia’s anti-abortion law, known as the “Living Infants Fairness and Equality Act” (the LIFE Act). Among other things, the LIFE Act includes language that changes the definition of “natural person” to include an “unborn child with a detectible human heartbeat.” The LIFE Act defines an “unborn child” as “a member of the species Homo sapiens at any stage of development who is carried in the womb.”
According to the Georgia Department of Revenue, a taxpayer who has an “unborn child” with a detectable human heartbeat on or after July 20, 2022 is eligible for the Georgia individual income tax dependent exemption in the amount of $3,000 for each “unborn child.”
The LIFE Act was passed in 2019 but was ruled unconstitutional and a violation of Roe v. Wade by a federal district court judge in July 2020. On July 20, 2022, the Eleventh Circuit Court of Appeals reversed the district court’s ruling. As a result, following the U.S. Supreme Court’s landmark decision in Dobbs v. Jackson Women’s Health Organization, the provision of the LIFE Act adding an “unborn child” with a detectable heartbeat to the definition of dependent became effective as of the date of the Eleventh Circuit decision.
Notably, neither the LIFE Act nor the Department of Revenue guidance addresses what happens in the case of a miscarriage after a taxpayer claims the exemption or in the case of disputed paternity. In addition, for federal tax purposes, in order for a taxpayer to claim a child as a dependent, state or local law is required to treat the child as having been born alive and there must be proof of a live birth shown by an official document such as a birth certificate. Thus, while Georgia law will allow a state tax exemption for a qualifying “unborn child,” the IRS will not allow a Federal child tax credit for an “unborn child.”
For the 2022 tax year, the Georgia exemption for dependent “unborn children” will be a subtraction on Line 12, “Other Adjustments,” on the Form 500 Schedule 1. The Department of Revenue has advised that, similar to any other deduction claimed on an income tax return, “relevant medical records or other supporting documentation shall be provided to support the dependent deduction claimed if requested by the Department.” The Department of Revenue plans to release additional information, including return instructions, later this year.
It is likely that other states, especially states with so called “trigger laws” outlawing abortion that went into effect after the Supreme Court ruling in Dobbs, will follow Georgia’s lead and enact similar legislation. For example, the Michigan House of Representatives recently approved a $200 tax credit for “unborn children” who have reached 12 weeks of gestation by December 31 of the tax year. Members of both the U.S. Senate and U.S. House of Representatives have also introduced bills that would allow pregnant women to claim the nonrefundable portion of the Child Tax Credit for their “unborn children.”
Regardless of religious and political ideologies, the Dobbs decision may result in significant, and inconsistent, changes in the definition of a dependent under federal and various state tax laws for years to come.