HB1183: HB1183 Income tax; exempt income received as personal compensation for full-time duty in the active military service of the United States

Under current Georgia law, income that service members earn from full-time active duty in the U.S. military is generally subject to state income tax like other wages. This bill would change that by adding a new exemption to the state's income tax code (O.C.G.A. § 48-7-27), removing personal compensation for full-time active military duty from the income Georgia counts when calculating what someone owes in state income tax. The bill is short and narrowly focused: it adds one new paragraph to the list of income types already exempt from state income tax. If enacted, the change would take effect on July 1, 2026, but would only apply to tax years beginning on or after January 1, 2027, meaning the earliest tax return affected would be for the 2027 tax year.

• Adds a new exemption to Georgia's state income tax law (O.C.G.A. § 48-7-27) for personal compensation earned from full-time active military duty.
• Excludes that active-duty military pay from a person's taxable income when filing Georgia state income taxes.
• Sets the law to take effect July 1, 2026, while limiting its actual application to tax years starting on or after January 1, 2027.
• Repeals any existing Georgia laws that conflict with the new exemption.

Georgia residents serving full-time on active duty in the U.S. military, since their duty pay would no longer count toward state taxable income. It also affects the Georgia Department of Revenue, which administers the state income tax system.

Active-duty service members living in or filing taxes in Georgia would owe less in state income tax because their military pay would no longer be counted as taxable income, starting with tax years beginning in 2027. This could reduce state tax revenue collected from military pay.

• Section 1 amends O.C.G.A. § 48-7-27(a) by adding paragraph (12.6), exempting income received as personal compensation for full-time active duty in the U.S. military from the calculation of taxable net income.
• Section 2 sets the effective date as July 1, 2026, and specifies the exemption applies only to taxable years beginning on or after January 1, 2027.
• Section 3 repeals any conflicting state laws.

1. 2026-02-06House Second Readers (House)
2. 2026-02-05House First Readers (House)
3. 2026-02-04House Hopper (House)

• Steven Sainz (R, HD-180)Primary sponsor
• Josh Bonner (R, HD-073)
• Bethany Ballard (R, HD-147)
• Carmen Rice (R, HD-139)
• James Burchett (R, HD-176)
• Ron Stephens (R, HD-164)

• income tax
• military pay
• tax exemptions
• active duty service members