Income tax; reduce rate of tax

Georgia taxpayers pay less income tax

The law takes effect July 1, 2025, and applies to tax years beginning on or after January 1, 2025. Georgia’s individual income tax rate falls from 5.39% to 5.19% for those tax years. Savings depend on your Georgia taxable income. Beginning January 1, 2026, scheduled annual cuts are 0.10 percentage point until the rate reaches 4.99%. Each annual cut is delayed one year for each year any of three tests fails, measured December 1 before the cut. First, the Governor’s revenue estimate for the next fiscal year must exceed the current year’s estimate by at least 3%. Second, the prior fiscal year’s net revenue must exceed net tax revenue in each of the three preceding fiscal years. Third, the Revenue Shortfall Reserve must hold more than the projected state revenue loss from the next cut. The Office of Planning and Budget must report its findings by December 1 each year to the tax department and legislative leaders. Recipients include the House Speaker, Senate President, and chairs of the House Appropriations, House Ways and Means, Senate Appropriations, and Senate Finance committees. Reporting ends after the final cut to 4.99%.