---
title: HB 1326. Income tax; living wage jobs; provide tax credit
collection: bills
id: 2025-2026/hb1326
cite_as: HB 1326, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb1326
md_url: https://georgiacommons.org/bills/2025-2026/hb1326.md
text_url: https://georgiacommons.org/bills/2025-2026/hb1326/text
source_url: https://www.legis.ga.gov/legislation/73257
date: 2026-02-19
status: introduced
corpus_version: bills-2026-09-13
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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omitted: votes and history
omitted_chars: 129
omitted_url: https://georgiacommons.org/bills/2025-2026/hb1326.md?full=1
bill_number: HB 1326
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2026-02-17
last_action: House Second Readers
sponsors:
- Yasmin Neal
- Anissa Jones
text_version: Introduced
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB1326/2025
upstream_id: 2118519
summaries_model: claude-sonnet-5
topic_tags:
- income tax credits
- minimum wage
- small business incentives
- living wage
- Georgia tax law
---
# HB 1326. Income tax; living wage jobs; provide tax credit
## Text
House Bill 1326
By: Representatives Neal of the 79th and Jones of the 143rd
A BILL TO BE ENTITLED
AN ACT
To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated,
relating to imposition, rate, computation, exemptions, and credits from income taxes, so as
to provide for a tax credit for living wage jobs; to provide for amounts, conditions, and
limitations; to provide for definitions; to provide for rules and regulations; to provide for
related matters; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to
imposition, rate, computation, exemptions, and credits from income taxes, is amended by
adding a new Code section to read as follows:
"48-7-40.38.
(a) As used in this Code section, the term:
(1) 'Base wage' means the average hourly rate paid by the taxpayer to the employee in
the 12 months before the taxpayer increased the hourly rate to a living wage.
(2) 'Full time' means a job that requires an average of at least 30 hours per week.
(3) 'Living wage' means an hourly rate of pay of $15.00 or more.
(4) 'Living wage job' means a job that:
(A) Is located in this state;
(B) Is full time;
(C) Pays a living wage on or after July 1, 2026; and
(D) Had a base wage of $10.00 per hour or less.
(b) An employer with 50 or fewer employees shall be allowed a credit against the tax
imposed by this article for each 12 month period of employment of an individual in a living
wage job. The amount of such credit shall be equal to the difference of the average hourly
wage paid to the employee in such 12 month period and the base pay, multiplied by the
number of hours worked by the employee in such 12 month period.
(c) The tax credit provided for in this Code section shall be subject to the following
conditions and limitations:
(1) To be eligible for such credit, the taxpayer shall have a net increase in the total
number of full-time employees in this state at the end of the taxable year for which the
credit is claimed over the number of full-time jobs in this state at the end of the previous
taxable year;
(2) Such credit shall be first claimed in the taxable year in which the employee
completes 12 consecutive months of employment in the living wage job;
(3) No taxpayer shall be allowed such credit for more than five taxable years per living
wage job; and
(4) In no event shall the credit provided for in this Code section for a taxable year exceed
the taxpayer's income tax liability. Any unused portion of the credit provided for in this
Code section shall be permitted to be carried forward and applied to such taxpayer's tax
liability for the subsequent three years. The credit provided for in this Code section shall
not be applied against such taxpayer's prior years' tax liabilities.
(d) The commissioner shall promulgate rules and regulations and forms necessary to
implement and administer this Code section."
SECTION 2.
All laws and parts of laws in conflict with this Act are repealed.
## Summaries written by Georgia Commons
The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.
A Georgia House bill would create a state income tax credit for small businesses that raise workers' pay to at least $15 an hour, aimed at employers with 50 or fewer employees.
### Plain-language summary
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.
### What it does
- Creates a new state income tax credit (O.C.G.A. ยง 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.
### Who it affects
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.
### Why it matters
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.
### Key provisions
- 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.
## Status
- Status: Introduced (2026-02-17)
- Last action: House Second Readers (2026-02-19)
- Sponsors: Yasmin Neal, Anissa Jones
- Official page: https://www.legis.ga.gov/legislation/73257
> The history, votes, and amendments (129 characters) are at https://georgiacommons.org/bills/2025-2026/hb1326.md?full=1