Overview
- Gov. Brian Kemp signed House Bill 463 and Senate Bill 33 into law, with the income tax changes taking effect for the 2026 tax year.
- The flat income tax rate drops to 4.99% in 2026 and then by 0.125 points a year to 3.99%, but each step depends on three checks on revenues and reserves.
- Standard deductions rise to $30,000 for married filers and $15,000 for single filers, with future bumps tied to revenue growth, and workers get up to $1,750 exempt for overtime and for cash tips through 2028 as seniors see a higher retirement exclusion starting in 2027.
- Senate Bill 33 lets local governments ask voters starting in 2028 to add a Local Homestead Option Sales Tax that uses sales tax dollars to boost homestead exemptions and lower property tax bills.
- To help pay for the cuts, lawmakers ended credits for telework expenses, electric and hybrid vehicles, and some manufacturers, a trade-off Democrats say will reduce money for core services.