HB375: HB375 Income tax; exclude overtime compensation

25 LC 59 0081 House Bill 375 By: Representatives Smith of the 18th, Tarvin of the 2nd, Powell of the 33rd, Momtahan of the 17th, Gunter of the 8th, and others A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1 relating to the imposition, rate, computation, exemptions, and credits for state income tax,2 so as to exclude overtime compensation from taxation; to provid e for reporting by3 employers; to provide for rules and regulations; to provide for a definition; to provide for4 related matters; to provide for an effective date and applicability; to repeal conflicting laws;5 and for other purposes.6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:7 SECTION 1.8 Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to the9 imposition, rate, computation, exemptions, and credits for state income tax, is amended in10 subsection (a) of Code Section 48-7-27, relating to the computation of taxable net income,11 by deleting "and" at the end of paragraph (14), by replacing th e period at the end of12 paragraph (15) with "; and", and by adding a new paragraph to read as follows:13 "(16)(A) For all taxable years beginning on or after January 1, 2026, any amount14 received by a full-time employee paid by an hourly wage as comp ensation for work15 H. B. 375 - 1 - 25 LC 59 0081 performed in excess of 40 hours a week, and any amount paid as overtime16 compensation in accordance with the federal Fair Labor Standards Act of 1938.17 (B) Notwithstanding subparagraph (A) of this paragraph, for employers governed by18 the federal National Railway Labor Act, the exemption provided in this paragraph shall19 apply to hourly component overtime compensation as defined in applicable collective20 bargaining agreements.21 (C) For each tax year beginning on or after January 1, 2026, e ach employer shall22 submit to the department, on forms prescribed by the department , the total amount23 received by full-time employees paid by an hourly wage as compe nsation for work24 performed in excess of 40 hours a week and the total number of employees to which25 such compensation was paid. The data shall be provided monthly or quarterly and shall26 be due no later than the due date for the corresponding monthly or quarterly27 withholding tax returns.28 (D) The department may require additional information of emplo yers and shall be29 authorized to adopt rules and regulations to provide for the ad ministration of this30 paragraph."31 SECTION 2.32 This Act shall become effective on July 1, 2025, and shall be applicable to all taxable years33 beginning on or after January 1, 2026.34 SECTION 3.35 All laws and parts of laws in conflict with this Act are repealed.36 H. B. 375 - 2 -