---
title: HB 880. Income tax; reduce tax rate that may be reached under certain conditions
collection: bills
id: 2025-2026/hb880
cite_as: HB 880, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb880
md_url: https://georgiacommons.org/bills/2025-2026/hb880.md
text_url: https://georgiacommons.org/bills/2025-2026/hb880/text
source_url: https://www.legis.ga.gov/legislation/71847
date: 2026-03-09
status: engrossed
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: 613
omitted_url: https://georgiacommons.org/bills/2025-2026/hb880.md?full=1
bill_number: HB 880
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2026-03-06
last_action: Senate Read and Referred
sponsors:
  - Shaw Blackmon
  - Trey Kelley
  - Ron Stephens
  - Mark Newton
  - Charles Martin
  - Bruce Williamson
text_version: Comm Sub
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB880/2025
upstream_id: 2016619
summaries_model: claude-sonnet-5
topic_tags:
  - income taxes
  - standard deduction
  - retirement income tax exclusion
  - state budget reserve
  - tax rate cuts
---

# HB 880. Income tax; reduce tax rate that may be reached under certain conditions

## Text

House Bill 880 (COMMITTEE SUBSTITUTE)
By: Representatives Blackmon of the 146th, Kelley of the 16th, Stephens of the 164th, Newton
of the 127th, Martin of the 49th, and others
A BILL TO BE ENTITLED
AN ACT
To amend Article 2 of Chapter 7 of Title 48 and Part 1 of Article 4 of Chapter 12 of Title 45
of the Official Code of Georgia Annotated, relating to the imposition, rate, computation,
exemptions, and credits relative to income taxes and management of budgetary and financial
affairs, respectively, so as to reduce the income tax rate that may be reached under certain
conditions; to provide for a gradual increase of the amount of the deduction from state
taxable income for dependents that may be reached under certain conditions; to provide for
a gradual increase of the amount of the standard deduction from state taxable income for
individuals that may be reached under certain conditions; to provide for an increase in the
amount of retirement income that may be excluded from state taxable income for individuals
65 or older; to provide for certain amounts of the Revenue Shortfall Reserve to be used for
tax relief; to increase the limitation on the maximum percentage of net revenue allowed to
be held in the Revenue Shortfall Reserve; to remove outdated provisions; 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 relative to income taxes, is amended
in Code Section 48-7-20, relating to individual tax rates, credit for withholding and other
payments, and applicability to estates and trusts, by revising subsection (a.1) as follows:
"(a.1)(1) On and after January 1, 2025, the tax imposed pursuant to subsection (a) of this
Code section shall be 5.19 percent for taxable years beginning on or after
January 1, 2025; provided, however, that such rate shall be reduced by 0.10 percent
annually beginning on January 1, 2026, until the rate reaches <del>4.99 percent,</del> <ins>3.99 percent;
</ins> provided that such annual reductions in the tax rate shall be <del>subject to delays as provided
in paragraph (2) of this subsection</del> <ins>delayed by one year for each year that prospective
annual reductions in the standard deduction are delayed for any of the reasons provided
in paragraph (1.1) of subsection (a) of Code Section 48-7-27.
</ins> <del>(2) Each prospective annual reduction in the tax rate that would otherwise occur as
provided in paragraph (1) of this subsection shall be delayed by one year for each year
that any of the following are true as of December 1:
(A) The Governor's revenue estimate for the succeeding fiscal year is not at least 3
percent above the Governor's revenue estimate for the present fiscal year;
(B) The prior fiscal year's net revenue collection was not higher than each of the
preceding three fiscal years' net tax revenue collection; or
(C) The Revenue Shortfall Reserve provided for in Code Section 45-12-93 does not
contain a sum that exceeds the amount of the decrease in state revenue projected to
occur as a result of the prospective reduction in the tax rates set to occur the following
year.
(3) The Office of Planning and Budget shall make the determinations necessary to
implement the provisions of paragraph (2) of this subsection and shall report its
determinations by December 1 of each year to the department, the Speaker of the House
</del>
<del>of Representatives, the President of the Senate, and the chairpersons of the House
Committee on Appropriations Committee, the House Committee on Ways and Means
Committee, the Senate Appropriations Committee, and the Senate Finance Committee.
This paragraph shall not be applicable after the final reduction to the rate of 4.99 percent
occurs."
</del> SECTION 2.
Said article is further amended by revising subsection (b) of Code Section 48-7-26, relating
to personal exemptions, as follows:
"(b) Each taxpayer shall be allowed as a deduction in computing his or her Georgia taxable
income a personal exemption in the amount of $4,000.00 for each dependent of such
taxpayer; <ins>provided, however, that such deduction shall be increased by $200.00 annually
beginning on January 1, 2027, until such deduction reaches $6,000.00, provided that such
increases in such deduction shall be subject to the same delays as those applied to standard
deductions as provided in paragraph (1.1) of subsection (a) of Code Section 48-7-27."
</ins> SECTION 3.
Said article is further amended in subsection (a) of Code Section 48-7-27, relating to
computation of taxable net income, by revising the introductory language and paragraph (1),
by adding a new paragraph and a new division, and by revising divisions (a)(5)(A)(xii) and
(a)(5)(A)(xiii) to read as follows:
"(a) Georgia taxable net income of an individual shall be the taxpayer's federal adjusted
gross income, as defined in the <del>United States</del> Internal Revenue Code of 1986, less:
(1) At the taxpayer's election, either:
(A) The sum of all itemized nonbusiness deductions used in computing such taxpayer's
federal taxable income; or
(B) A standard deduction in an amount as follows:
(i) In the case of a married couple filing a joint return, $24,000.00; <ins>provided,
however, that such deduction shall be increased by $1,200.00 annually beginning on
January 1, 2027, until such deduction reaches $36,000.00, provided that such
increases in such deduction shall be subject to delays as provided in paragraph (1.1)
of this subsection;</ins> or
(ii) In the case of a single taxpayer, head of household, or married taxpayer filing a
separate return, $12,000.00; <ins>provided, however, that such deduction shall be increased
by $600.00 annually beginning on January 1, 2027, until such deduction reaches
$18,000.00, provided that such increases in such deduction shall be subject to delays
as provided in paragraph (1.1) of this subsection;
(1.1)(A) Each prospective increase in the standard deduction that would otherwise
occur as provided in divisions (i) and (ii) of subparagraph (B) of paragraph (1) of this
subsection shall be delayed by one year for each year that any of the following are true
as of December 1:
(i) The Governor's revenue estimate for the succeeding fiscal year is not at least 3
percent above the Governor's revenue estimate for the present fiscal year;
(ii) The prior fiscal year's net revenue collection was not higher than each of the
preceding three fiscal years' net tax revenue collection; or
(iii) The Revenue Shortfall Reserve provided for in Code Section 45-12-93 does not
contain a sum that exceeds the amount of the decrease in state revenue projected to
occur as a result of the prospective reduction in the tax rates set to occur the following
year.
(B) The Office of Planning and Budget shall make the determinations provided in
subparagraph (A) of this paragraph and shall report its determinations by December 1
of each year to the department, the Speaker of the House of Representatives, the
President of the Senate, and the chairpersons of the House Committee on
Appropriations, the House Committee on Ways and Means , the Senate Appropriations
</ins>
<ins>Committee, and the Senate Finance Committee. This paragraph shall not be applicable
after the final increases in the standard deductions provided under divisions (i) and (ii)
of subparagraph (B) of paragraph (1) of this subsection occur;"
</ins> "(xii) For taxable years beginning on or after January 1, 2008, and prior to January
1, 2012, retirement income from any source not to exceed an exclusion amount of
$35,000.00; <del>and
</del> (xiii) For taxable years beginning on or after January 1, 2012, <ins>and ending on or
before December 31, 2026,</ins> retirement income from any source not to exceed an
exclusion amount of $35,000.00 for each taxpayer meeting the eligibility requirement
set forth in division (i) or (ii) of subparagraph (D) of this paragraph or an amount of
$65,000.00 for each taxpayer meeting the eligibility requirement set forth in division
(iii) of subparagraph (D) of this paragraph; <ins>and
(xiv) For taxable years beginning on or after January 1, 2027, retirement income from
any source not to exceed an exclusion amount of $35,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (i) or (ii) of subparagraph (D)
of this paragraph or an amount of $70,000.00 for each taxpayer meeting the eligibility
requirement set forth in division (iii) of subparagraph (D) of this paragraph."
</ins> SECTION 4.
Part 1 of Article 4 of Chapter 12 of Title 45 of the Official Code of Georgia Annotated,
relating to management of budgetary and financial affairs, is amended by revising Code
Section 45-12-93, relating to revenue shortfall reserve, reservation of surplus state funds,
appropriation and release of funds, and limitations, as follows:
"45-12-93.
(a) There shall be a reserve of state funds known as the 'Revenue Shortfall Reserve.'
(b) The amount of all surplus in state funds existing as of the end of each fiscal year shall
be reserved and added to the Revenue Shortfall Reserve. Funds in the Revenue Shortfall
Reserve shall carry forward from fiscal year to fiscal year, without reverting to the general
fund at the end of a fiscal year. The Revenue Shortfall Reserve shall be maintained,
accumulated, appropriated, and otherwise disbursed only as provided in this Code section.
(c) For each existing fiscal year, the General Assembly may appropriate from the Revenue
Shortfall Reserve an amount up to 1 percent of the net revenue collections of the preceding
fiscal year for funding increased K-12 needs.
(d) The Governor may release for appropriation by the General Assembly a stated amount
from funds in the Revenue Shortfall Reserve that are in excess of <del>4</del> <ins>8</ins> percent of the net
revenue of the preceding fiscal year.
(e) As of the end of each fiscal year, an amount shall be released from the Revenue
Shortfall Reserve to the general fund to cover any deficit by which total expenditures and
contractual obligations of state funds authorized by appropriation exceed net revenue and
other amounts in state funds made available for appropriation.
(f) <del>The combined Revenue Shortfall Reserve and the Midyear Adjustment Reserve
existing on May 9, 2005, shall become the Revenue Shortfall Reserve provided for in this
Code section.
(g) Any other provision of law notwithstanding, the General Assembly is authorized to
appropriate $7 million for State Fiscal Year 2005 from the Revenue Shortfall Reserve.
(h)</del> The Revenue Shortfall Reserve shall not exceed <del>15</del> <ins>20</ins> percent of the previous fiscal
year's net revenue for any given fiscal year. <ins>Any amount of undesignated surplus funds in
excess of 20 percent of the previous fiscal year's net revenue may be used for tax relief
pursuant to Acts of the General Assembly."
</ins> SECTION 5.
This Act shall become effective on January 1, 2027, and shall be applicable to all taxable
years beginning on or after January 1, 2027.
SECTION 6.
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 880 would lower the target for Georgia's income tax rate cut from 4.99 percent to 3.99 percent and gradually raise the standard deduction, dependent exemption, and retirement income exclusion, with the changes taking effect January 1, 2027.

### Plain-language summary

Georgia has been phasing down its flat income tax rate under a law that stops the reductions once the rate hits 4.99 percent, with the schedule delayed in years when state revenue growth or reserves fall short. This bill lowers that final target to 3.99 percent and links future rate cuts to whether the standard deduction is also increasing on schedule.
The bill also phases in higher deductions: the standard deduction would rise from $24,000 to $36,000 for joint filers and from $12,000 to $18,000 for single filers and heads of household, in steps starting in 2027, subject to the same revenue-based delay rules. The dependent exemption would climb from $4,000 to $6,000 in $200 annual steps. The retirement income exclusion for people 65 and older would rise from $65,000 to $70,000. The bill also raises the ceiling on Georgia's Revenue Shortfall Reserve from 15 percent to 20 percent of the prior year's net revenue and lets the Governor release reserve funds above 8 percent (up from 4 percent) for lawmakers to appropriate. The changes take effect January 1, 2027.

### What it does

- Lowers the eventual floor for Georgia's income tax rate cuts from 4.99 percent to 3.99 percent, phased in at 0.10 percent per year.
- Ties future income tax rate reductions to whether standard deduction increases are also happening on schedule, replacing the old separate delay rules.
- Phases in a higher dependent exemption from $4,000 to $6,000 in $200 annual increments starting in 2027.
- Phases in higher standard deductions, from $24,000 to $36,000 for joint filers and $12,000 to $18,000 for single filers and heads of household, starting in 2027.
- Raises the retirement income exclusion for taxpayers 65 and older from $65,000 to $70,000 starting in 2027.
- Raises the cap on the state's Revenue Shortfall Reserve from 15 percent to 20 percent of net revenue and allows the Governor to release reserve funds above 8 percent (previously 4 percent) for appropriation.

### Who it affects

Georgia individual income taxpayers generally, including married couples and single filers who use the standard deduction, parents claiming dependent exemptions, and retirees 65 and older who exclude retirement income from state taxes. The Governor, the Office of Planning and Budget, and the General Assembly are also affected through the changed budget reserve and reporting rules.

### Why it matters

If enacted, most Georgia taxpayers would eventually see a lower income tax rate and larger deductions, meaning less state income tax withheld from paychecks over several years, though the increases can be delayed if state revenue growth or reserve levels fall short of set benchmarks.

### Key provisions

- Section 1 amends O.C.G.A. § 48-7-20 to change the final target income tax rate from 4.99 percent to 3.99 percent and removes the old three-factor delay test in favor of linking rate cuts to standard deduction increases.
- Section 2 amends O.C.G.A. § 48-7-26 to raise the dependent personal exemption from $4,000 to $6,000 in $200 annual increments starting January 1, 2027.
- Section 3 amends O.C.G.A. § 48-7-27 to raise standard deductions (joint: $24,000 to $36,000; single/head of household: $12,000 to $18,000) starting 2027, subject to delays tied to revenue estimates, net revenue trends, and reserve levels as of December 1 each year.
- Section 3 also raises the retirement income exclusion for taxpayers 65 and older from $65,000 to $70,000 for taxable years beginning on or after January 1, 2027.
- Section 4 amends O.C.G.A. § 45-12-93 to raise the Revenue Shortfall Reserve cap from 15 percent to 20 percent of net revenue and raise the threshold for gubernatorial release of reserve funds from 4 percent to 8 percent, and allows surplus above 20 percent to be used for tax relief.
- Section 5 sets the effective date as January 1, 2027, applicable to taxable years beginning on or after that date.

## Status

- Status: Engrossed (2026-03-06)
- Last action: Senate Read and Referred (2026-03-09)
- Sponsors: Shaw Blackmon, Trey Kelley, Ron Stephens, Mark Newton, Charles Martin, Bruce Williamson
- Official page: https://www.legis.ga.gov/legislation/71847

> The history, votes, and amendments (613 characters) are at https://georgiacommons.org/bills/2025-2026/hb880.md?full=1