HB1326: HB1326 Income tax; living wage jobs; provide tax credit

Under current Georgia law, there is no specific income tax credit tied to raising an employee's pay to a set living wage. This bill would add a new section to Georgia's tax code (O.C.G.A. § 48-7-40.38) creating such a credit for employers with 50 or fewer employees. To qualify, a job must be full time (at least 30 hours a week), located in Georgia, previously paid $10 an hour or less, and pay $15 an hour or more starting on or after July 1, 2026. The credit equals the increase in hourly wage multiplied by hours worked over a 12 month period. The employer must also show a net increase in full-time jobs for the year, can claim the credit for up to five years per job, and can carry forward unused credit for three years. The Georgia Department of Revenue would write rules to administer it.

• Creates a new state income tax credit (O.C.G.A. § 48-7-40.38) for small employers who raise workers' pay to a living wage of at least $15 an hour.
• Limits eligibility to employers with 50 or fewer employees and to full-time jobs paying $10 an hour or less before the raise.
• Requires the employer to have a net increase in full-time Georgia jobs for the year the credit is claimed.
• Caps the credit at five taxable years per living wage job and allows unused credit to carry forward three years but not backward.
• Directs the state tax commissioner to create rules and forms to administer the credit.

Small businesses in Georgia with 50 or fewer employees, especially those employing low-wage full-time workers, and workers whose pay could rise from $10 or less to at least $15 an hour. The Georgia Department of Revenue would also be affected, since it must write implementing rules.

Small employers who raise low-wage full-time workers' pay to at least $15 an hour could reduce their state income tax bills for up to five years per job, potentially making wage increases more affordable, while workers in qualifying jobs would see a defined pay floor tied to the credit.

• Section 1 adds O.C.G.A. § 48-7-40.38, defining 'base wage,' 'full time,' 'living wage' ($15.00 or more per hour), and 'living wage job' (previously $10.00 or less per hour, now paying $15.00 or more starting July 1, 2026).
• Subsection (b) grants employers with 50 or fewer employees a credit equal to the wage increase multiplied by hours worked in a 12 month period.
• Subsection (c)(1) requires a net increase in full-time employees for the year the credit is claimed.
• Subsection (c)(2) allows the credit to be claimed starting only after the employee completes 12 consecutive months in the living wage job.
• Subsection (c)(3) limits the credit to five taxable years per living wage job.
• Subsection (c)(4) caps the credit at the taxpayer's tax liability for the year, allows a three year carryforward, and bars applying it to prior years' taxes.
• Subsection (d) directs the commissioner to issue rules and forms to implement the credit.
• Section 2 repeals conflicting laws.

1. 2026-02-19House Second Readers (House)
2. 2026-02-18House First Readers (House)
3. 2026-02-17House Hopper (House)

• Yasmin Neal (D, HD-079)Primary sponsor
• Anissa Jones (D, HD-143)

• income tax credits
• minimum wage
• small business incentives
• living wage
• state tax policy