More than 36,000 Georgians used a new “unborn dependents” deduction in 2022, lowering their taxable income by about $109 million, state officials say.
The new deduction is the result of Georgia’s 2019 abortion law, which allows expectant parents to claim an embryo or fetus as a dependent on their taxes. Georgia is the only state known to have that kind of deduction.
The exemption for 2022 was worth $3,000 per embryo or fetus, as it is for other minor dependents, which results in about a $170 tax benefit. Only people who were pregnant by or after July 20, 2022, when Georgia’s law took effect, were eligible for the tax break.
The General Assembly passed legislation earlier this year that would increase the per-child deduction to $4,000.
Richard Auxier, a principal policy associate in the Washington-based Urban-Brookings Tax Policy Center, said, as a ballpark estimate, Georgia lost — and parents saved — about $6 million in state revenue.
Compared with Georgia’s $36.1 billion budget that will take effect in July, $6 million is not a huge amount of money, Auxier said. But, he said, that’s relative. Oftentimes lawmakers or advocates are told it would cost the state too much money to implement certain policies.
“That’s just how policymaking works. At some point, we have to make decisions, but $6 million can absolutely be the difference between a program getting enacted,” he said. “In the grand scheme of Georgia’s budget, it’s actually not much money.”
For example, a proposal that would have required the state’s more than 2,000 public K-12 schools to have an automated external defibrillator would cost the state about $6.9 million, according to a fiscal note prepared by the state Department of Audits and Accounts. That legislation did not pass this year.
The state Department of Revenue does not require filers to provide proof of a pregnancy up front to take the exemption, as is the case of most other exemptions, although the filer would have to provide it if audited.
Georgia’s law took effect a few weeks after the U.S. Supreme Court overturned Roe v. Wade, the nearly 50-year-old decision that guaranteed a nationwide right to abortion. Georgia law bans most abortions once a doctor can detect fetal cardiac activity, which is typically about six weeks into a pregnancy and before many know they are pregnant.
Guidelines from the Department of Revenue encouraged Georgians to use the “other deductions” line on tax forms to itemize “UNBORNDEP,” but since the directive was not required, state revenue officials said filers used a variety of terms to indicate their intent to use the unborn dependent exemption. That made it difficult for the department to determine how many Georgians took advantage of the benefit until earlier this year, agency officials said.
Auxier said Georgia’s approach does not ultimately give meaningful tax relief to expectant parents and offered that instead, the state should pass a child tax credit, similar to the ones of 15 other states. Credits, he said, are more valuable to taxpayers.
“Credit is different than a deduction,” Auxier said. “A deduction lowers your taxable income, but a credit lowers your tax bill. ... There is this very simple and effective way to support mothers of young children, and it is sitting right there if they want to do it. But they’re choosing this.”
What is and isn’t allowed under the ‘unborn dependent exemption’
Q: Do I need to include proof of pregnancy?
A: No.
Q: If I get pregnant and give birth in the same tax year, can I claim both the unborn dependent exemption and the traditional dependent exemption?
A: No.
Q: If my pregnancy progresses to the point where fetal cardiac activity is detected but I have a miscarriage, can I still claim the exemption?
A: Yes.
Q: If I have multiple pregnancies that reach the point of detectable fetal cardiac activity in a tax year, can I claim each pregnancy?
A: Yes.
Q: How much is the unborn dependent exemption?
A: The same as other minor dependents — a $3,000* deduction on reported income, which results in about $170 in a tax benefit.
*The General Assembly passed House Bill 1021 to increase the dependent tax deduction to $4,000.
