Georgia lets parents claim a $3,000 tax deduction for embryos

Interestingly enough, the repeal of Roe v. Wade is having all sorts of unintended consequences, even in the tax world. As a result of the U.S. Supreme Court taking away a woman’s federal right to abortion, many states have been rolling out their own laws limiting abortion access at the local level. As of the date of this article, Georgia bans virtually all abortions once the unborn child has a heartbeat. In an effort to conform abortion law to tax law, Georgia has changed the definition of a tax dependent to include any humans, including an unborn child. This will result in an additional Georgia tax deduction of $3,000 for each unborn child. The deduction is equal to the same amount as for a child that has been born.

There are some limitations as outlined in the updated Georgia Code Section 1-2-1. The unborn child must have a detectable heartbeat meaning some sort of “embryonic or fetal cardiac activity.” Additionally an unborn child must be “carried in the womb,” so while an embryo may be an eligible tax dependent, frozen embryos for IVF will likely not qualify. The Georgia Department of Revenue issued guidance on August 1, 2022 stating that the tax deduction will be effective for any unborn children with a heartbeat effective July 20, 2022 and later, which was the date of the U.S. Supreme Court ruling.

If a mother is pregnant with twins or even more, she will be eligible for a $3,000 Georgia tax deduction for each unborn child. It is unclear how the law will apply in the case of a miscarriage or partners living apart. The law will certainly create a lot of uncomfortable questions for tax preparers to have to ask this tax season. The Georgia Department of Revenue expects to issue more guidance later this year. It will be interesting to see whether other states banning abortion will follow suit and conform the definition of a tax dependent to both born and unborn children. And if they do, what will be next? Will we see some of the states be consistent and expand their child tax credits to unborn children as well?

For additional information concerning this alert, please contact:

Melody C. Horton at (864) 502-8311.

The information contained herein is of a general nature and should not be construed as professional advice. The reader should also be cautioned that the alert may not be specific to the reader’s exact circumstances and needs and may require additional information.  You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.