The change will have no impact on many Georgians because they don’t itemize their deductions when they file their tax returns.
“For about 90 percent of people who are just claiming the standard deduction, this (rule) isn’t going to have any impact at all,” said Carl Davis, the research director with the Institute on Taxation and Economic Policy in Washington.
Davis co-wrote a paper last year that said high-income earners were using tax credit programs such as Georgia’s to turn a “profit.” They reduced their federal tax burden by taking a charitable deduction for the money they contributed, which they got back on their state taxes through the credit. It’s something taxpayers using the standard deduction can’t do, he said.
If the rule goes into effect, only those who are willing to contribute without getting ahead financially will continue doing so, he said. “It’s going to weed out the opportunists.” Read more