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10 June 2026

Georgia law lowers individual personal income tax rate retroactive to January 1, 2026

Under H.B. 463, and effective retroactive to January 1, 2026, Georgia's personal income tax rate is reduced from 5.19% to 4.99%, with additional annual decreases of 0.125% until the rate reaches 3.99%. This is the third rate cut since a 2022 law created a flat rate of 5.49% beginning in 2024, with future reductions. (See Tax Alerts 2022-0732, 2024-0841 and 2025-0930.)

The updated withholding formula/tables, once available, will be published here.

In addition, H.B. 463 increases the annual retirement income tax exclusion from a maximum of $65,000 to $70,000 effective January 1, 2027. It also adopts the qualified overtime and tip exemption under the One Big Beautiful Bill Act effective January 1, 2026. (See Tax Alert 2025-1476.)

Ernst & Young LLP insights

Employers should consider notifying employees living and/or working in Georgia of the change in the state income tax rate and suggest they review their Form G-4, Employee's Withholding Allowance Certificate.

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2026-1249

 

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