The Georgia Department of Revenue (DOR) has revised its Employer's Withholding Tax Guide (Guide) to reflect changes under HB. 1015 and HB 1021, which, retroactive to January 1, 2024, lower the personal income tax rate from 5.49% to 5.39% and make other changes affecting Georgia taxpayers' state income tax liabilities.

Employers are required to immediately implement the changes in the Georgia income tax withholding calculation.

According to the Guide, the following personal income tax changes are effective January 1, 2024:

• The personal income tax rate is lowered from 5.49% to 5.39%
• The Georgia standard deduction is increased to $24,000 for taxpayers filing "married filing joint" and $12,000 for "single, head of household" and "married filing single" taxpayers
• The additional deductions for taxpayers over age of 65 and/or blind are eliminated
• The dependent deduction is increased from $3,000 to $4,000

Supplemental wages

The Guide states that the supplemental withholding rate for bonuses and other compensation is 5.39%.

Previously, employers had the option of using the graduated withholding rates as follows based on an employee's estimated annual income. Retroactive to January 1, 2024, this option is no longer necessary because there is now a flat income tax rate.

Ernst & Young LLP insights

Employers should consider notifying employees of the Georgia personal income tax changes that apply in 2024 and suggest they review the information they have provided on Form G-4, State of Georgia Employee's Withholding Allowance Certificate.