HB 1183: Income tax; exempt income received as personal compensation for full-time duty in the active military service of the United States

Right now, Georgia counts military pay as part of a service member's taxable income under the state's income tax law (O.C.G.A. § 48-7-27). This bill adds a new exemption so that income received as personal compensation for full-time duty in the active military service of the United States would no longer be counted when figuring Georgia taxable income. The change is made by adding a new paragraph to the state income tax computation statute. The bill would take effect July 1, 2026, but the exemption itself would only apply to taxable years beginning on or after January 1, 2027, meaning it would first show up on tax returns filed for that year.

• Adds a new exemption to Georgia's income tax law (O.C.G.A. § 48-7-27) excluding pay for full-time active military duty from state taxable income.
• Applies specifically to compensation for full-time active duty in the military service of the United States, as opposed to part-time or reserve status pay.
• Sets a delayed effective date of July 1, 2026, with the exemption applying only to tax years starting on or after January 1, 2027.
• Repeals any existing state laws that conflict with the new exemption.

Active-duty members of the U.S. military who are Georgia taxpayers, since their full-time duty pay would no longer be subject to Georgia state income tax. The Georgia Department of Revenue would also be affected because it would need to update tax computation rules and forms.

Active-duty service members filing Georgia income taxes for 2027 and later would owe state tax on less of their income, since their military pay would be excluded from the calculation. This could lower their overall state tax bill, though the change would not take effect for nearly two more years.

• Section 1 amends Code Section 48-7-27(a) by adding a new paragraph (12.6) exempting income received as personal compensation for full-time active military duty from Georgia taxable income.
• Section 2 sets the effective date as July 1, 2026, and specifies the exemption applies to taxable years beginning on or after January 1, 2027.
• Section 3 repeals any conflicting laws, a standard provision clearing away inconsistent existing statutes.

1. 2026-02-06House Second Readers (House)
2. 2026-02-05House First Readers (House)
3. 2026-02-04House Hopper (House)

• Steven Sainz (R, HD-180)Primary sponsor
• Josh Bonner (R, HD-073)
• Bethany Ballard (R, HD-147)
• Carmen Rice (R, HD-139)
• James Burchett (R, HD-176)
• Ron Stephens (R, HD-164)

• income tax
• military pay
• tax exemptions
• veterans and service members