Georgia Reduces Individual Income Tax Rates For 2026
June 04, 2026
At a glance
- Georgia is reducing its individual income tax rate to 4.99% for 2026.
- The new rate goes into effect on July 1, 2026 (retroactive to January 1, 2026).
- Georgia also increased the dependent allowance exemption and standard deduction amounts.
- Taxable income will exclude up to $1,750 of qualified overtime compensation and up to $1,750 in cash tips.
Summary
On May 11, 2026, Georgia Governor Brian Kemp signed HB 463 to:
- Reduce the individual income tax rate from 5.19% to 4.99% retroactive to January 1, 2026, with the legislation going into effect on July 1, 2026.
- Beginning on January 1, 2027, Georgia will reduce the income tax rate annually until it reaches 3.99%.
- In addition to the rate reduction, Georgia increased standard deductions and dependent exemptions for 2026:
Filing Status | Standard Deductions |
Single | Increases from $12,000 to $15,000 |
Married (Joint) | Increases from $24,000 to $30,000 |
Dependents | Increases from $4,000 to $5,000 (per dependent) |
- For tax years January 1, 2026, to December 31, 2028, the following income is excluded from Georgia taxable wages, and employees can claim this exemption amount on their individual income tax return:
- Up to $1,750 in qualified overtime compensation for full-time hourly employees
- Up to $1,750 in cash tips
Next Steps
Paylocity will automatically update the 2026 Georgia withholding rate to 4.99%, effective on July 1, 2026. You don’t need to take action in payroll, as any excess tax withheld is reconciled when employees file their 2026 individual income tax return.
Paylocity will continue monitoring for updates to:
- The Georgia Form G-4 form for any changes that may impact withholding tax calculations
- Reporting requirements for further instructions on excluding overtime pay and cash tips
Thank you for choosing Paylocity as your valued service partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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