Georgia Governor Brian Kemp signed House Bill 1199 (HB 1199) into law March 20, 2026. This is Georgia’s annual “conformity” bill (which is basically the state’s way of deciding which federal tax changes it will follow and which ones it won’t).
Georgia didn’t adopt every federal provision across the board, so your federal return and your Georgia return will most likely be different; and that can affect both compliance and planning.
A Few Quick Takeaways
- Some federal deduction and credit rules carry over to Georgia.
- Georgia still requires add-backs/adjustments for certain federal items (for example, SALT amounts above the cap).
- Businesses still deal with major federal/Georgia differences in depreciation and certain expense limitations.
- The bill also included a 60-day suspension of Georgia’s motor fuel excise tax.
Individual Taxpayer Updates
HB 1199 keeps or adopts several federal rules that affect individuals. These items include:
- Georgia continues to limit casualty loss deductions. Generally, those losses are deductible only if they relate to a federally declared disaster.
- Georgia also continues to follow the federal change that eliminated most “miscellaneous itemized deductions,” with a few limited exceptions, like educator expenses.
- Another item worth pointing out is the old “Pease” limitation has been replaced with a new rule that caps the tax benefit of itemized deductions at 35%. In simpler terms, higher-income taxpayers may see limitations for itemized deductions.
- Georgia conforms with the new federal law that limits the deductibility of your charitable deductions. You are only allowed to deduct charitable deductions in excess of 0.5% of your modified adjusted gross income (MAGI).
- Georgia conforms with the expanded Section 1202 benefits.
- The child tax credit
In addition to conforming with many provisions of the new One Big Beautiful Bill (OBBB), Georgia did not conform with some items as well, including:
- No tax on overtime or tips. These items are taxable in Georgia.
- Georgia did not adopt the provision allowing a charitable deduction for people who don’t itemize.
- Georgia did not adopt the expanded SALT cap. Georgia kept the cap at $10,000.
Motor Fuel Excise Tax Holiday as a Temporary Relief
HB 1199 also included a temporary suspension of Georgia’s motor fuel excise tax for 60 days. The tax is currently 33.3 cents per gallon on gas and 37.3 cents per gallon on diesel. Since the tax is imposed at the wholesale level, any price change at the pump may not happen instantly. The goal for Georgia is short-term relief for consumers and businesses.
Key Differences in Federal Tax Changes vs. Georgia Tax Changes for Business Owners
For businesses, some of the biggest day-to-day issues are still the places where Georgia doesn’t follow federal rules. HB 1199 keeps several of those differences in place, including:
Georgia does partially conform to IRC Section 179 expensing rules. This is largely a continuation of what Georgia has done in prior years. The bill also continues conformity in other areas (for example, the low-income housing credit under IRC Section 42 and certain corporate charitable contribution limits).
HB 1199 imposes an aggregate annual cap of $100 million on low-income housing credits for tax years 2026 through 2028, which may limit availability for some taxpayers and could affect the timing and certainty of claiming the credit.
Georgia follows federal law in some areas and diverges in others. That means your Georgia taxable income won’t always match what you see on your federal return. Ultimately, businesses often need separate federal calculations and Georgia calculations.
Additional consideration is needed, especially for depreciation, interest and certain deductions. This is especially true around itemized deductions, charitable giving and business depreciation/expense rules.
Next Steps for Georgia Taxpayers
If you’re an individual taxpayer, it may be worth revisiting how you’re itemizing (and how/when you’re making charitable gifts). If you own a business, make sure your team is tracking the differences in federal taxes and Georgia taxes. Depreciation, interest and other limited deductions are going to need careful attention, so your state filings are correct and you’re not missing planning opportunities.
To learn more about how HB 1199 may impact you, contact your Warren Averett advisor.
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