Georgia Cuts Its Income Tax Rate to 4.99% for 2026
The new law lowers Georgia's flat income tax rate and raises deductions, with the changes applying from January 1, 2026.
Georgia Governor Brian Kemp signed House Bill 463 on May 11, reducing the state's individual income tax rate from 5.19% to 4.99% for the 2026 tax year. The reduction applies retroactively to January 1, so it covers the full tax year rather than just income earned after the signing.
The measure, titled the Georgia Economic Growth and Tax Relief Act of 2026, also increases standard deductions and the deduction for dependents. Those changes reduce the amount of income subject to the new rate, giving eligible taxpayers savings beyond the rate cut alone.
What Changes for Georgia Taxpayers?
The Georgia Department of Revenue lists the new rate, standard deductions by filing status, and the dependent deduction among its 2026 income tax changes. The main changes to the rate and deductions are shown in the table below.
| Tax Provision | 2025 | 2026 |
|---|---|---|
| Individual income tax rate | 5.19% | 4.99% |
| Standard deduction: Single, Head of Household, or Married Filing Separately | $12,000 | $15,000 |
| Standard deduction: Married Filing Jointly | $24,000 | $30,000 |
| Deduction per eligible dependent | $4,000 | $5,000 |
These amounts apply to 2026 income reported on returns filed in 2027. They do not change the rate used on a 2025 return filed during 2026.
How Much Does the Rate Cut Save?
The rate falls by 0.20 percentage point, or $20 for every $10,000 of Georgia taxable income. For example, holding taxable income at $50,000, the tax falls from $2,595 at 5.19% to $2,495 at 4.99%, a $100 reduction before credits.
That comparison isolates the rate change. A taxpayer claiming the larger standard deduction or dependent deduction may also have less taxable income. The final savings depend on filing status, income, deductions, and credits.
Further Rate Cuts Have Conditions
Beginning in 2027, the law schedules additional annual reductions of 0.125 percentage point until the rate reaches 3.99%. It also schedules further increases in standard and dependent deductions.
Those future changes can be delayed if the state's revenue and reserve requirements are not met. The Office of Planning and Budget must make the required determination by December 1 each year, so the law's eventual 3.99% rate should not be treated as a guaranteed rate for a particular year.
The legislation also introduces limited deductions for qualifying overtime compensation and cash tips for 2026 through 2028, and raises the retirement income exclusion for eligible taxpayers age 65 or older beginning in 2027. These provisions have separate eligibility rules.
For the current rate, deductions, and worked examples for Single and Married Filing Jointly taxpayers, see our Georgia income tax rates page.
References:
- Gov. Kemp Signs Legislation Lowering Taxes and Supporting Economic Growth. Office of Governor Brian P. Kemp. Retrieved May 11, 2026.
- House Bill 463, Georgia Economic Growth and Tax Relief Act of 2026 (PDF). Sections 2-1 through 2-4 and 5-1. Georgia General Assembly. Retrieved May 11, 2026.
- Important Tax Updates. 2026 Income Tax Changes. Georgia Department of Revenue. Retrieved May 11, 2026.