Written by Eamonn McElroy, CPA, Atlanta
Published April 18, 2025
On April 15, 2025, Governor Brian Kemp signed two significant tax relief measures into law. These legislative changes are designed to provide both immediate and long-term financial benefits to Georgia taxpayers. Below is a summary of these developments and their potential impact on your finances.
House Bill 111 (Income Tax Rate Reduction)
Georgia House Bill 111 (HB 111) is part of a broader tax reform initiated by Georgia House Bill 1437 in 2022, which aimed to gradually reduce the state's income tax rate to 4.99% over several years. HB 111 accelerates Georgia's income tax reduction plan, lowering the state's flat income tax rate from 5.39% to 5.19%, effective January 1, 2025. The state's tax rate is scheduled to further decrease by 0.10% on January 1, 2026, and by 0.10% on January 1, 2027, at which point it will have reached 4.99%. However, these future rate decreases may be delayed based on any of the following fiscal conditions:
- The Governor’s revenue estimate for the upcoming fiscal year is not at least 3% higher than the current year’s,
- The prior fiscal year's net tax revenue collection was not greater than each of the preceding three fiscal years, or
- The Revenue Shortfall Reserve (as defined in Georgia Code Sec. 45-12-93) does not exceed the amount of revenue loss projected from the next tax rate cut.
The Office of Planning and Budget is responsible for evaluating the above conditions and reporting its findings by December 1 each year.
House Bill 112 (One-Time Income Tax Rebate)
Georgia House Bill 112 (HB 112) authorizes a one-time income tax rebate totaling approximately $1 billion for qualified taxpayers. This rebate marks the third consecutive year that Georgia has returned surplus funds to taxpayers, made possible by the state's strong financial position and budget surplus.
Qualified taxpayers are individual taxpayers who filed a Georgia state income tax return (GA Form 500) for both the 2023 and 2024 tax years by the applicable filing deadlines (including extensions). The following are excluded from being qualified taxpayers eligible for the one-time income tax rebate:
- Nonresident alien individuals,
- Individuals who were claimed as a dependent on another taxpayer's 2023 income returns (unless the individual had earned income for the 2023 tax year),
- Estates or trusts.
Rebate amounts are equal to the lesser of:
- Your 2023 Georgia income tax liability, or
- The following based on your 2023 filing status:
- Single or Married Filing Separately: $250
- Head of Household: $375
- Married Filing Jointly: $500
Part-year resident and nonresident filers may be eligible for a prorated rebate based on the portion of their income taxable by Georgia.
Rebates will be issued automatically after an individual's 2024 Georgia tax return is filed, however processing may take 6-8 weeks. The rebate will be sent one of two ways. If you were owed a refund with your 2024 Georgia tax return, and requested that the refund be direct deposited, the one-time income tax rebate will also be direct deposited using the same bank account. Otherwise, the one-time income tax rebate will be mailed as a check to the address listed on your 2024 Georgia tax return.
Rebates are not considered taxable income for Georgia income tax purposes (ask your advisor about the federal level). If an individual owed a rebate has any outstanding tax liabilities or debts, the rebate may be applied to those outstanding tax obligations instead of being sent to the individual.
Copyright © Eamonn McElroy CPA, LLC.
Disclaimer: Tax law, regulation and procedure are constantly changing. Eamonn McElroy CPA, LLC has provided this article as general information only and is under no obligation to update the article for future changes, including but not limited to changes in tax law or procedure. The information contained in the article is not tax, investment or legal advice, nor should it be construed as tax, investment or legal advice. You should consult with your advisors to determine how the information in this article affects you and what actions you may take and should take.