HB 1326: Income tax; living wage jobs; provide tax credit

Georgia law currently offers no specific income tax break tied to raising employee wages to a set 'living wage' level. This bill would add a new section to Georgia's income tax code creating a credit for employers with 50 or fewer employees who move a full-time job from a base wage of $10 an hour or less up to at least $15 an hour, starting July 1, 2026. The credit equals the difference between the new and old hourly wage, multiplied by hours worked in a 12-month period. To qualify, the employer must also show a net increase in full-time jobs in Georgia that year. The credit can be claimed for up to five years per job, cannot exceed the employer's tax bill, and unused amounts can carry forward three years but not backward. The Department of Revenue commissioner would write rules to administer it.

• Creates a new state income tax credit (O.C.G.A. § 48-7-40.38) for employers with 50 or fewer employees who raise a job's pay to a living wage of $15 or more per hour.
• Limits eligibility to full-time jobs (30+ hours a week) in Georgia that had a base wage of $10 per hour or less before the raise, effective on or after July 1, 2026.
• Requires the employer to show a net increase in total full-time Georgia employees for the year the credit is claimed.
• Caps the credit at five taxable years per living wage job and disallows it from exceeding the employer's total income tax liability.
• Allows unused credit amounts to carry forward up to three years but bars applying it to prior years' tax bills.
• Directs the state revenue commissioner to write rules and forms to administer the credit.

Small Georgia employers with 50 or fewer employees who raise wages to at least $15 an hour, their low-wage full-time workers whose pay increases could trigger the credit, and the Georgia Department of Revenue, which would administer the new credit program.

Small businesses that raise pay for low-wage full-time workers could offset some of that cost through lower state income taxes, potentially encouraging wage increases. Workers in qualifying jobs could see pay rise to at least $15 an hour, though the credit only applies if the employer also grows its overall Georgia workforce.

• Section 1 adds new Code section 48-7-40.38, defining 'base wage,' 'full time,' 'living wage' ($15.00 or more per hour), and 'living wage job.'
• A living wage job must be located in Georgia, be full time, pay $15 or more starting July 1, 2026, and have previously paid $10 or less per hour.
• Subsection (b) grants employers with 50 or fewer employees a credit equal to the wage increase multiplied by hours worked over a 12-month period.
• Subsection (c) requires a net increase in full-time Georgia employees to qualify, limits the credit to five taxable years per job, and sets carryforward and liability caps.
• Subsection (d) directs the commissioner to create rules, regulations, and forms to implement the credit.
• Section 2 repeals any conflicting laws.

1. 2026-02-19House Second Readers (House)
2. 2026-02-18House First Readers (House)
3. 2026-02-17House Hopper (House)

• Yasmin Neal (D, HD-079)Primary sponsor
• Anissa Jones (D, HD-143)

• income tax credits
• minimum wage
• small business incentives
• living wage
• Georgia tax law