What Changed in Georgia’s Conformity Bill (HB 1199)?

Georgia’s annual conformity bill, HB 1199, was signed into law on March 20, 2026, during the 2025 filing season. The bill updates how the state of Georgia will treat recent federal tax law changes, including provisions in the One Big Beautiful Bill Act (OBBBA). Georgia adopted some of those changes, but not all. As a result, some 2025 Georgia returns may differ from the federal return. Taxpayers who have already filed this year may need to revisit those returns, while others will need to apply the new rules as they complete tax filings and plan for the year ahead. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.

Background

Each year, Georgia lawmakers pass a conformity bill to decide how the state will treat federal tax law changes. Because Georgia is a fixed-date conformity state, it does not automatically adopt each federal update as it is enacted. Instead, the General Assembly sets the date through which Georgia will follow the Internal Revenue Code, then identifies the provisions it will and will not adopt. This year, the legislature opted for partial conformity. 

Overview of House Bill 1199

HB 1199 updates Georgia’s IRC conformity date to January 1, 2026, for tax years beginning on or after January 1, 2025. It also identifies where Georgia will continue to follow its own rules instead of the new federal treatment. Those decisions have immediate implications for both businesses and individuals. Key updates include: 

For Business Taxpayers

• Bonus Depreciation — Georgia does not conform to federal bonus depreciation. If a taxpayer claims any percentage of bonus depreciation on the federal return, an add-back is required for state tax purposes. Instead, Georgia allows certain Section 179 expensing, which means the state deduction may be taken differently and over a longer period of time. 
• Section 179 Expensing — Georgia generally conforms to federal Section 179 rules, including the ability to expense certain property, such as qualified real property. However, Georgia treatment does not fully mirror federal treatment in every case.
• Immediate R&E Expensing — Georgia does not conform to new Section 174A, which restored immediate expensing for domestic research and experimental costs at the federal level after years of required amortization. However, this does not create a new state-federal difference because Georgia had already decoupled from the federal amortization rules and already allowed immediate expensing of R&E costs.
• Business Interest Limitation — Georgia does not conform to the OBBBA updates under Section 163(j). In reality, the federal change is closer to Georgia’s existing rules, so the difference may be limited, though a separate state calculation may still be required.
• Low-Income Housing Tax Credit (LIHTC) — Georgia partially conforms to the federal LIHTC rules, but state law now caps the aggregate annual amount of credits at $100 million for tax years 2026 through 2028. 

For Individual Taxpayers

• Limitation on Itemized Deductions — Georgia conforms to the federal rule that limits the tax benefit of itemized deductions. Taxpayers may still itemize, but for higher-income taxpayers, those deductions may not reduce tax liability to the same extent as under prior law.
• SALT Deduction — Georgia does not conform to the increased federal SALT cap deduction. The federal deduction is $40,000 for 2025 through 2029, with phaseout restrictions. That’s up from $10,000 in previous years. Georgia will continue to follow the $10,000 limit. 
• Tips and Overtime — Georgia does not conform to the federal deductions for qualified tips or qualified overtime compensation. Those amounts may still be taxed for Georgia purposes even if they receive more favorable treatment on the federal return.
• Car Loan Interest — Georgia does not conform to the federal deduction for qualified passenger vehicle loan interest. 
• Casualty Losses — Georgia conforms to the federal rule limiting casualty loss deductions to losses tied to federally declared disaster situations. 
• Miscellaneous Itemized Deductions — Georgia conforms to the federal elimination of miscellaneous itemized deductions. As a result, some deductions that taxpayers may remember from earlier years generally remain unavailable on the Georgia return. 
• Qualified Small Business Stock (QSBS) — Georgia conforms to the enhanced federal exclusion rules for QSBS under Section 1202. For affected taxpayers, that may preserve favorable state treatment in this area.

Next Steps

Because HB 1199 was signed on March 20, 2026, during filing season, taxpayers may need to revisit 2025 Georgia returns that were already filed. Returns still in process should incorporate the updated conformity rules. Going forward, taxpayers will want to review state-specific additions, subtractions, and deduction limits in areas where Georgia did not conform to federal treatment.

Contact Us

Businesses and individuals affected by HB 1199 should review 2025 state returns with a qualified tax advisor before filing or amending a return. Beyond this filing season, the new law may also shape tax planning decisions throughout the year. 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.