TAX NEWS - February 2009

Teacher Tax Cut - Georgia tax

On March 28, 2005, Governor Sonny Perdue signed legislation giving teachers in Georgia a deduction of up to $250 per year for the purchase of school supplies. The legislature gave final passage to the teacher tax cut (HB 263) on March 21, 2005. This tax deduction is retroactive to include the 2004 and 2005 tax years. Prior to March 28, 2005, Georgia had not adopted any of the provisions of the W orking Families Tax Relief Act of 2004 or the American Jobs Creation Act of 2004, which include extension of the $250 tax deduction for teacher classroom expenses.

Qualified taxpayers can claim this tax deduction on Federal Form 1040, Line 23 or Form 1040A, Line 16. Because the federal adjusted gross income is listed on Georgia Form 500 (Line 8), no adjustments are needed to claim this deduction on your Georgia return.

If you filed your tax year 2004 Georgia income tax return on or before March 28, 2005 and added educator expenses as an adjustment on Line 9, you may file Form 500X to amend your return. If tax deduction was claimed on the federal return but not added as an adjustment on your previously filed Georgia tax return, an amended tax return is not necessary. 

The teacher tax cut is a tax deduction that could reduce your Georgia adjusted gross income. It is not a tax credit. Therefore, it should not be subtracted from your Georgia taxable income or tax liability.