Georgia

Discussion

Georgia: Tips and Overtime Income Tax Exclusion

Effective January 1, 2026, HB 463 creates a temporary state income tax exclusion for overtime compensation and cash tips. The exclusion runs through December 31, 2028, after which it automatically repeals. Full-time, hourly employees may exclude up to $1,750 in overtime compensation from Georgia state income tax for the exclusion period. Employees in occupations that customarily and regularly receive tips may also exclude up to $1,750 in cash tips for the same period. During the exclusion period, employers must report the total qualified overtime compensation paid, total cash tips paid, and the total number of employees who received either, filed monthly or quarterly alongside their withholding tax returns. For tax year 2026 only, these reports may be filed at year-end. The Georgia Department of Revenue may issue additional regulations governing these requirements.

 

Georgia: Portable Benefits Accounts for Gig Workers

Effective May 11, 2026, HB 987 allows for the creation of a portable benefit account for independent contractors without resulting in a change of independent contractor status for classification purposes. A portable benefit account is an account that allows for the allocation of funds for portable benefit plans like health insurance, unemployment insurance, disability insurance, life insurance, or retirement benefits. Any party, including app-based entities, can voluntarily contribute funds to a portable benefit account of an independent contractor pursuant to a voluntary written agreement between the parties.

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