Georgia Sine Die 2026: Income Tax Cuts and Targeted Relief

In Summary

• Georgia’s individual income tax rate reduction is being accelerated to 4.99% for 2026, with a structured path to 3.99% by 2034. Significant updates include a Georgia standard deduction increase to $15,000 for individuals and $30,000 for joint filers by 2027, alongside a temporary tax exemption for tipped and overtime income capped at $1,750 through 2028 to provide immediate relief for hourly workers.
•  To combat rising housing costs, the Georgia statewide property tax assessment cap now limits annual homestead value increases to 3% or the inflation rate, removing previous local government opt-out provisions. Additionally, eligible taxpayers can expect a one-time Georgia income tax surplus rebate of up to $500 for married couples, while a temporary Georgia motor fuel tax suspension provides a 33-cent per gallon reduction through May 19, 2026.

Georgia lawmakers adjourned the 2026 legislative session after approving a series of tax changes affecting both income and property taxes. The package lowers the state income tax rate, limits how quickly home values can increase for property tax purposes, provides one-time rebates, and temporarily suspends the state gas tax. This is welcome news for many Georgia taxpayers that have been expecting relief. Portions of the legislation are already in effect, and others are expected to be finalized soon. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.

HB 463: Income Tax Changes

The Georgia Economic Growth and Tax Relief Act of 2026 (HB 463) revises Georgia’s individual income tax structure over several years. The legislation lowers the income tax rate, increases the standard deduction and dependent exemption, and provides a temporary exclusion for certain tipped and overtime income.

• Income Tax Rate — The legislation would reduce Georgia’s income tax rate from 5.19% to 4.99% beginning in 2026. It also establishes a long-term plan to lower the rate to 3.99% through annual reductions of 0.125 percentage points, an increase from the prior 0.10% annual reduction schedule. 
• Standard Deduction — The standard deduction increases for both single filers and married couples. For single filers, the deduction rises from $12,000 to $15,000 in 2027, followed by annual increases of $375 until it reaches $18,000. For married couples filing jointly, the deduction increases from $24,000 to $30,000 in 2027, with annual increases of $750 until it reaches $36,000.
• Dependent Exemption — The dependent exemption increases from $4,000 to $5,000. Beginning in 2027, it rises by $125 each year until reaching $6,000.
• Tip and Overtime Income — For tax years 2026 through 2028, up to $1,750 of tipped or overtime income is exempt from Georgia income tax. This provision aligns with a temporary federal deduction for similar wages scheduled to expire after 2028.

SB 33 (HB 1116 / SB 382): Property Tax Limits and Local Sales Tax Option

The Homeownership Opportunity and Market Equalization Act of 2026 (SB 33) limits how much a homeowner’s property value can rise each year for tax purposes. It also allows certain counties and cities to adopt a 1% local sales tax, subject to voter approval, to help reduce or offset homeowner property taxes.

Statewide Assessment Cap — SB 33 requires all local governments to apply the homestead assessment cap first enacted under HB 581 in 2024. Annual increases in a home’s assessed value are limited to the rate of inflation or 3%, whichever is lower. Previously, cities, counties, and school districts could opt out of the cap, and about 68% of school districts and 30% of counties chose to do so. SB 33 removes that option and applies the cap statewide.

The law limits how quickly assessed values can grow, but it does not limit millage rates. Local governments can continue to set property tax rates based on budget needs. As a result, total property tax bills may still change from year to year.

Some local governments and school systems have raised concerns about how a mandatory cap on assessment growth could affect funding for services. For homeowners, the change likely means more consistent property values and property tax from year to year.

Optional Local Sales Tax — Counties and certain cities may adopt a 1% Local Homestead Option Sales Tax (LHOST), subject to voter approval. Revenue from this sales tax may be used to reduce or offset homeowner property taxes. 

HB 1000: One-Time Tax Rebates 

HB 1000 provides a one-time income tax rebate for eligible taxpayers. The rebate is up to $250 for single filers, $375 for heads of household, and $500 for married couples filing jointly. To receive the rebate, taxpayers must file both 2024 and 2025 Georgia income tax returns. Payments are issued automatically by direct deposit or paper check. The Georgia Department of Revenue offers an online tool to determine eligibility and payment status.

HB 1199: Conformity and Gas Tax Suspension

This updates Georgia’s tax code to address recent federal changes under the One Big Beautiful Bill Act (OBBBA). The law specifies which OBBBA provisions Georgia will follow and where the state will continue to apply its own rules. In areas where Georgia does not conform, taxpayers may need to calculate certain items differently for the state return versus the federal return.

The legislation also includes a temporary suspension of the state’s gas tax. From March 20 through May 19, 2026, the suspension reduces the tax by approximately 33 cents per gallon for gasoline and 37 cents for diesel fuel.

Contact Us

Georgia’s 2026 legislative session produced a combination of immediate relief measures and proposed long-term tax changes. As these provisions move forward, taxpayers and business owners may need to monitor both state-level developments and local implementation decisions to understand how the overall tax position may change. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.