---
title: SB 474. State Income Tax; overtime compensation from taxation; exclude
collection: bills
id: 2025-2026/sb474
cite_as: SB 474, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/sb474
md_url: https://georgiacommons.org/bills/2025-2026/sb474.md
text_url: https://georgiacommons.org/bills/2025-2026/sb474/text
source_url: https://www.legis.ga.gov/legislation/72965
date: 2026-02-09
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.
up: https://georgiacommons.org/bills/2025-2026.md
previous: https://georgiacommons.org/bills/2025-2026/sb473.md
next: https://georgiacommons.org/bills/2025-2026/sb475.md
index: https://georgiacommons.org/bills/index.md
omitted: votes and history
omitted_chars: 95
omitted_url: https://georgiacommons.org/bills/2025-2026/sb474.md?full=1
bill_number: SB 474
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: Senate
bill_type: bill
status_date: 2026-02-06
last_action: Senate Read and Referred
sponsors:
- Randy Robertson
- Bo Hatchett
- Blake Tillery
- Brian Strickland
- Ricky Williams
- Steve Gooch
- Greg Dolezal
- Matt Brass
- Russ Goodman
- Shawn Still
text_version: Introduced
has_text: true
legiscan_url: https://legiscan.com/GA/bill/SB474/2025
upstream_id: 2111522
summaries_model: claude-sonnet-5
topic_tags:
- state income tax
- overtime pay
- hourly workers
- tax exemptions
- employer reporting
---
# SB 474. State Income Tax; overtime compensation from taxation; exclude
## Text
Senate Bill 474
By: Senators Robertson of the 29th, Hatchett of the 50th, Tillery of the 19th, Strickland of
the 42nd, Williams of the 25th and others
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 for state income tax, so as
to exclude overtime compensation from taxation; to provide for reporting by employers; to
provide for rules and regulations; 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
imposition, rate, computation, exemptions, and credits for state income tax, is amended in
subsection (a) of Code Section 48-7-27, relating to 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:
"(16)(A) For all taxable years beginning on or after January 1, 2027, any amount
received by a full-time employee paid by an hourly wage as compensation for work
performed in excess of 40 hours a week, and any amount paid as overtime
compensation in accordance with the federal Fair Labor Standards Act of 1938.
(B) Notwithstanding subparagraph (A) of this paragraph, for employers governed by
the federal National Railway Labor Act, the exemption provided in this paragraph shall
apply to hourly component overtime compensation as defined in applicable collective
bargaining agreements.
(C) For each tax year beginning on or after January 1, 2027, each employer shall
submit to the department, on forms prescribed by the department, the total amount
received by full-time employees paid by an hourly wage as compensation for work
performed in excess of 40 hours a week and the total number of employees to which
such compensation was paid. The 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.
(D) The department may require additional information of employers and shall be
authorized to adopt rules and regulations to provide for the administration of this
paragraph."
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, 2027.
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.
A Georgia Senate bill would exempt overtime pay earned by hourly workers from the state income tax starting with the 2027 tax year, while requiring employers to report overtime data to the state.
### Plain-language summary
Georgia currently taxes overtime pay as regular income under the state's income tax law (O.C.G.A. § 48-7-27). This bill would change that by excluding from taxable income any amount an hourly, full-time employee earns for working more than 40 hours a week, as well as overtime pay calculated under the federal Fair Labor Standards Act of 1938. For railway workers covered by the federal National Railway Labor Act, the exemption would instead follow the overtime definitions in their union contracts.
Starting with tax years beginning on or after January 1, 2027, employers would have to report to the Georgia Department of Revenue the total overtime pay and number of employees who received it, on a monthly or quarterly basis tied to existing withholding tax filing deadlines. The department could require more information and would write rules to administer the new exemption. The law would take effect July 1, 2026.
### What it does
- Excludes overtime pay earned by hourly, full-time employees for hours worked beyond 40 per week from Georgia's state income tax, starting in tax year 2027.
- Also excludes overtime compensation calculated under the federal Fair Labor Standards Act of 1938 from state taxable income.
- Sets a special rule for railway employers, applying the exemption based on overtime definitions in applicable collective bargaining agreements.
- Requires every employer to report to the Department of Revenue the total overtime pay and the number of employees who received it, on a monthly or quarterly schedule.
- Gives the Department of Revenue authority to demand additional information and adopt rules to administer the exemption.
### Who it affects
Hourly, full-time employees in Georgia who work overtime, all employers who pay overtime and must now file new reports, railway employers and unionized railway workers with collective bargaining agreements, and the Georgia Department of Revenue, which must build reporting rules and process the new filings.
### Why it matters
Hourly workers who regularly work more than 40 hours a week would keep more of their overtime pay because it would no longer count toward state taxable income. Employers would take on new recordkeeping and reporting duties tied to their existing withholding tax filing deadlines.
### Key provisions
- Section 1 amends O.C.G.A. § 48-7-27 to add new paragraph (16), excluding overtime pay for hourly, full-time employees working over 40 hours a week from state taxable income beginning with tax years starting on or after January 1, 2027.
- Subparagraph (A) also covers overtime compensation paid under the federal Fair Labor Standards Act of 1938.
- Subparagraph (B) applies a different standard for employers covered by the federal National Railway Labor Act, using overtime definitions from collective bargaining agreements.
- Subparagraph (C) requires employers to report total overtime pay and employee counts to the Department of Revenue monthly or quarterly, matching withholding tax return deadlines.
- Subparagraph (D) authorizes the Department of Revenue to request additional employer information and to issue rules implementing the exemption.
- Section 2 sets the effective date as July 1, 2026, applying to tax years beginning on or after January 1, 2027.
## Status
- Status: Introduced (2026-02-06)
- Last action: Senate Read and Referred (2026-02-09)
- Sponsors: Randy Robertson, Bo Hatchett, Blake Tillery, Brian Strickland, Ricky Williams, Steve Gooch, Greg Dolezal, Matt Brass, Russ Goodman, Shawn Still
- Official page: https://www.legis.ga.gov/legislation/72965
> The history, votes, and amendments (95 characters) are at https://georgiacommons.org/bills/2025-2026/sb474.md?full=1