HB880: HB880 Income tax; reduce tax rate that may be reached under certain conditions

Georgia's income tax rate has been on a path of gradual annual cuts, currently set to stop decreasing once it reaches 4.99 percent. This bill extends that schedule so the rate keeps dropping by 0.10 percent a year until it reaches 3.99 percent, though the cuts can still be delayed if the state's revenue growth, prior year collections, or reserve fund do not meet certain thresholds. The bill also increases, over time, the personal exemption for dependents from $4,000 up to $6,000, the standard deduction for joint filers from $24,000 up to $36,000 and for single filers from $12,000 up to $18,000, and raises the retirement income exclusion for taxpayers 65 and older from $65,000 to $70,000 starting in 2027. It raises the cap on Georgia's Revenue Shortfall Reserve from 15 to 20 percent of the prior year's net revenue and allows surplus above that cap to be used for tax relief. The changes take effect January 1, 2027, and apply to taxable years beginning on or after that date.

• Extends the automatic reduction schedule for Georgia's income tax rate so it can fall to 3.99 percent instead of stopping at 4.99 percent, subject to delay conditions.
• Increases the personal exemption deduction for each dependent from $4,000 to as much as $6,000 in $200 annual steps starting in 2027.
• Raises the standard deduction for joint filers from $24,000 to as much as $36,000 and for single filers from $12,000 to as much as $18,000, in scheduled annual increases.
• Raises the retirement income tax exclusion for taxpayers 65 or older from $65,000 to $70,000 for taxable years beginning on or after January 1, 2027.
• Raises the cap on the state's Revenue Shortfall Reserve fund from 15 percent to 20 percent of the previous year's net revenue, and allows surplus above that cap to be used for tax relief.
• Sets the changes to take effect January 1, 2027, applying to taxable years starting on or after that date.

Georgia individual income taxpayers, including married couples, single filers, heads of household, people with dependents, and retirees age 65 and older. The bill also affects the Office of Planning and Budget, the Department of Revenue, and legislative committees that track and report on the delayed tax cuts.

If enacted, Georgia taxpayers could eventually pay a lower income tax rate and claim larger deductions for dependents, standard filing, and retirement income, though the reductions depend on the state meeting revenue growth benchmarks each year and could be delayed indefinitely if those conditions are not met.

• Section 1 revises O.C.G.A. § 48-7-20 to continue cutting the income tax rate by 0.10 percent annually until it reaches 3.99 percent, instead of stopping at 4.99 percent, with delays tied to revenue benchmarks.
• Section 2 revises O.C.G.A. § 48-7-26(b) to raise the per-dependent personal exemption from $4,000 to $6,000 in $200 annual increments starting January 1, 2027.
• Section 3 revises O.C.G.A. § 48-7-27 to raise the joint-filer standard deduction to $36,000 and the single-filer standard deduction to $18,000 in scheduled steps, and raises the retirement income exclusion to $70,000 for eligible taxpayers 65 and older.
• Section 3 also requires the Office of Planning and Budget to report annually by December 1 to legislative leaders and finance committees on whether deduction increases must be delayed.
• Section 4 revises O.C.G.A. § 45-12-93 to raise the Revenue Shortfall Reserve cap from 15 percent to 20 percent of the prior year's net revenue and allows surplus above that cap to fund tax relief.
• Section 5 sets the effective date as January 1, 2027, applicable to taxable years beginning on or after that date.

1. 2026-03-09Senate Read and Referred (Senate)
2. 2026-03-06House Passed/Adopted By Substitute (House)
3. 2026-03-06House Third Readers (House)
4. 2026-02-26House Committee Favorably Reported By Substitute (House)
5. 2026-02-17House Withdrawn, Recommitted (House)
6. 2026-02-11House Committee Favorably Reported By Substitute (House)
7. 2025-04-02House Second Readers (House)
8. 2025-03-31House First Readers (House)

• Shaw Blackmon (R, HD-146)Primary sponsor
• Trey Kelley (R, HD-016)
• Ron Stephens (R, HD-164)
• Mark Newton (R, HD-127)
• Charles Martin (R, HD-049)
• Bruce Williamson (R, HD-112)

1. PassedHouse voteMarch 6, 2026

   102 yea, 69 nay (1 not voting, 5 absent)

   Passage: House Vote #663

• income tax rate
• tax deductions
• retirement income tax
• state budget reserves
• tax relief