---
title: HB 1416. Income tax; exclude tips from taxation
collection: bills
id: 2025-2026/hb1416
cite_as: HB 1416, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb1416
md_url: https://georgiacommons.org/bills/2025-2026/hb1416.md
text_url: https://georgiacommons.org/bills/2025-2026/hb1416/text
source_url: https://www.legis.ga.gov/legislation/73470
date: 2026-02-25
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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next: https://georgiacommons.org/bills/2025-2026/hb1417.md
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omitted: votes and history
omitted_chars: 129
omitted_url: https://georgiacommons.org/bills/2025-2026/hb1416.md?full=1
bill_number: HB 1416
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2026-02-20
last_action: House Second Readers
sponsors:
  - Mitchell Horner
  - Jordan Ridley
  - Jason Ridley
  - Holt Persinger
  - Carter Barrett
text_version: Introduced
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB1416/2025
upstream_id: 2121410
summaries_model: claude-sonnet-5
topic_tags:
  - income tax
  - tipped workers
  - restaurant industry
  - tax exemptions
  - employer reporting
---

# HB 1416. Income tax; exclude tips from taxation

## Text

House Bill 1416
By: Representatives Horner of the 3rd, Ridley of the 22nd, Ridley of the 6th, Persinger of the
119th, and Barrett of the 24th
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 the imposition, rate, computation, exemptions, and credits for state income tax,
so as to exclude tips from taxation; to provide for reporting by employers; to provide for a
definition; to provide for related matters; to provide for an effective date and applicability;
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 the
imposition, rate, computation, exemptions, and credits for state income tax, is amended in
subsection (a) of Code Section 48-7-27, relating to the computation of taxable net income,
by deleting "and" at the end of paragraph (14), by replacing the period at the end of
paragraph (15) with "; and", and by adding a new paragraph to read as follows:
<ins>"(16)(A) All tips received by an employee, provided that such income is included in
the taxpayer's federal adjusted gross income and, but for this paragraph, would be
subject to taxation by this state.
</ins>
<ins>(B) Each employer shall submit to the department, on forms prescribed by the
department, the following:
(i) For the tax year beginning on January 1, 2026, the total amount of tips received
by any employee who received tips during the tax year. Such data shall be due no
later than January 31, 2027;
(ii) For the tax year beginning on January 1, 2027, and each tax year thereafter, the
total amount of tips received by any employee who received tips during the tax year.
Such data shall be provided monthly or quarterly and shall be due no later than the
due date for the corresponding monthly or quarterly withholding tax returns; and
(iii) Such additional information as may be required by the commissioner to
effectuate this paragraph.
(C) As used in this paragraph, the term 'tips' means and includes cash tips received
directly from customers; tips from customers who leave a tip through electronic
settlement or payment, such as a credit card, debit card, gift card, or any other
electronic payment method; the value of any noncash tips, such as tickets or other items
of value; and tip amounts received from other employees paid out through tip pools, tip
splitting, or any other formal or informal tip-sharing arrangement. Such term shall not
include service charges that customers must pay, such as automatic gratuities."
</ins> SECTION 2.
This Act shall become effective on July 1, 2026, and shall be applicable to all taxable years
beginning on or after January 1, 2026.
SECTION 3.
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.

House Bill 1416 would exempt tips from Georgia's state income tax starting with the 2026 tax year, while requiring employers to report tip totals to the state.

### Plain-language summary

Right now, tips that Georgia workers receive count as taxable income under state law, just as they do for federal taxes. This bill would change that by adding tips as a new exclusion from Georgia taxable income (O.C.G.A. § 48-7-27), meaning workers would not pay Georgia income tax on tip money, as long as that money is included in their federal adjusted gross income and would otherwise be taxed by the state.
The bill also creates a new employer reporting duty. Employers would have to report the total tips paid to employees to the Georgia Department of Revenue, starting with 2026 totals due by January 31, 2027, then on a monthly or quarterly basis matching withholding tax deadlines going forward. The bill defines 'tips' broadly to include cash, electronic payments, noncash items like tickets, and tip-pool distributions, but excludes mandatory service charges. The change would take effect July 1, 2026, and apply to tax years starting on or after January 1, 2026.

### What it does

- Excludes all employee tips from Georgia state income tax, as long as the tips are part of the worker's federal adjusted gross income.
- Requires employers to report total tip amounts paid to each tipped employee to the Georgia Department of Revenue.
- Sets a January 31, 2027 deadline for employers to report 2026 tip totals, then shifts to monthly or quarterly reporting tied to withholding tax deadlines.
- Defines 'tips' to include cash, electronic payments (credit or debit card, gift card), noncash items of value, and tip-pool or tip-splitting proceeds.
- Excludes mandatory service charges, such as automatic gratuities, from the definition of tips that qualify for the tax exclusion.
- Sets an effective date of July 1, 2026, applying to tax years beginning on or after January 1, 2026.

### Who it affects

Tipped workers in Georgia, such as restaurant servers, bartenders, and other service employees who receive cash or electronic tips, along with the employers who must track and report tip totals to the Georgia Department of Revenue, and the department itself, which must create reporting forms and collect the data.

### Why it matters

Tipped workers in Georgia would keep more of their take-home pay since tip income would no longer be taxed at the state level. Employers would take on a new administrative task of tracking and reporting tip totals, and the state would collect less income tax revenue from tipped earnings.

### Key provisions

- Section 1 amends O.C.G.A. § 48-7-27(a) to add tips as a new exclusion (paragraph 16) from Georgia taxable income, contingent on the tips being part of federal adjusted gross income.
- Section 1(B) requires employers to report tip totals to the Department of Revenue, with 2026 data due by January 31, 2027 and later years reported monthly or quarterly.
- Section 1(B)(iii) lets the state revenue commissioner require additional information from employers beyond the basic tip totals.
- Section 1(C) defines 'tips' to include cash, electronic payments, noncash items, and tip-sharing arrangements, but excludes mandatory service charges like automatic gratuities.
- Section 2 sets the effective date as July 1, 2026, applying to tax years beginning on or after January 1, 2026.

## Status

- Status: Introduced (2026-02-20)
- Last action: House Second Readers (2026-02-25)
- Sponsors: Mitchell Horner, Jordan Ridley, Jason Ridley, Holt Persinger, Carter Barrett
- Official page: https://www.legis.ga.gov/legislation/73470

> The history, votes, and amendments (129 characters) are at https://georgiacommons.org/bills/2025-2026/hb1416.md?full=1