Georgia Income Tax: Inside the New Elimination Roadmap and Tax Refunds for 2026

Georgia state capitol dome in downtown Atlanta

(Image credit: Getty Images)

Georgia’s path to a zero-percent income tax just got a lot clearer. Earlier this week, Gov. Brian Kemp released the proposed 2027 budget for the state, doubling down on an existing plan to accelerate income tax cuts (and issue Georgia surplus tax refunds — more on that later).

The governor's move follows a landmark state Senate proposal to phase out the current 5.09% rate by 2032. That plan, spearheaded by Lt. Gov. Burt Jones and a special Senate committee, offers immediate tax exemptions that could shield two-thirds of Georgians from state income tax as early as next year (if the state hits certain revenue marks).

However, the path ahead isn't straightforward. Between cutting state tax breaks and a growing push to prioritize property tax relief instead, the future of your paycheck remains a hot debate under the Gold Dome.

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Here is everything you need to know about Georgia state income taxes in 2026 and beyond.

When would the Georgia state income tax end? The 2026 timeline

As reported by Kiplinger, Georgia Lt. Gov. Jones created a bipartisan state Senate committee to seek ways to end the Georgia state income tax. The move came about a week after Jones announced his campaign for Georgia Governor.

“If we wish to remain the number one state for business and keep our state competitive, we must expand on the progress made over the past four years to eliminate Georgia’s income tax,” Jones stated in a release.

The special committee’s proposal to eliminate the Georgia income tax includes (if certain revenue targets are met):

Accelerated rate cuts. Dropping personal and corporate income taxes to 4.99% in 2026, followed by a further personal income tax reduction to 3.99% in 2029.
Targeted elimination. By 2032, the Georgia income tax would be eliminated for individual taxpayers, while keeping the corporate tax rate at the proposed 4.99% reduced rate.
Higher standard deductions. Not collecting any personal income tax on the first $50,000 for single filers and $100,000 for married filing jointly (current law is a 0% income tax rate on the first $12,000 if single, $24,000 for married filing jointly).

This proposal builds on an existing trend in the Peach State; a flat rate of 5.39% was imposed for all taxpayers last tax season, and the rate is already set to further decrease to 4.99% by 2027.

But the new plan could reportedly exempt two-thirds of working Georgians from state income tax starting next year. That tax relief would result in $3 billion in foregone state revenue during the first year alone, leading to a potential $16 billion annual gap in the state budget, per the Georgia Budget and Policy Institute (GBPI).

Budget watchdogs, including the GBPI, warn that without income tax, Georgia might be forced to triple the state sales tax or implement drastic cuts to essential public services to balance the books.

Who benefits from the Georgia 2026 'zero-tax' threshold

State Sen. Blake Tillery (R-Vidalia), chair of the special committee, framed the plan in a press conference as a relief measure for the middle class. "Let’s give breaks to families who are feeling the crunch the most first."

However, some argue the long-term math tells a different story. State Sen. Nan Orrock (D-Atlanta) labeled the proposal a "massive handout" to the wealthy, warning that it worsens the state's affordability crisis.

"[They’re] saying they’re doing you a favor," Orrock noted in a press release, "[But] almost every Georgian would see their tax bill increase by a month’s worth of groceries."

Recent reports suggest that while higher standard deductions can help some low-income families, the total elimination of the income tax would see 74% of the benefits flow to households earning six figures or more.

Meanwhile, to bridge the immediate $3 billion revenue gap, the committee proposed a funding strategy for the first couple of years:

State surplus and bonds. In the first year, Georgia plans to use about $2 billion from its budget surplus. The state will cover the remaining $1 billion by switching back to a traditional bond program for capital projects instead of using cash.
Chopping Georgia tax breaks. In the second year, the plan aims to eliminate or reduce roughly 10% of existing tax credits and incentives — a move that targets about $3 billion in tax breaks.
Incentives at risk. Programs like the PEACH education credit, rural hospital tax credits, and vehicle trade-in exemptions are all potential targets for reduction or repeal.

Further funding for the income tax elimination plan would come through spending reforms, capping emergency funds, and potential closures of underperforming state boards and commissions.

Critics, including the GBPI, point out that while the state Senate plan lists certain categories, it does not provide specific recommendations. They have raised concerns about which public services or additional tax areas, like sales tax, may be affected if these triggers do not fully cover the $16 billion annual budget gap.

Is the property tax in Georgia at an end? The 2026 relief proposal

Beyond questions of affordability, a new rift has opened within the state GOP over how exactly to deliver relief to Georgians.

Historically, Georgia House Republicans have favored gradual income tax cuts. However, House Speaker Jon Burns (R-Newington) has pivoted toward a different priority: Reducing taxes paid on rising home valuations. The pitch, which was only given last week, is to phase out property taxes for Georgia homeowners.

But focus hasn't shifted away from eliminating the state's income tax. Jones has made the repeal a cornerstone of his 2026 gubernatorial campaign, ensuring the issue stays at the forefront of the legislative session. Kemp, now in his final year in office, declined to comment on the specific proposal.

Georgia tax rebate in 2026?

Kemp unveiled his proposed 2027 budget in mid-January, which includes over $1 billion in Georgia surplus tax refunds in 2026.

If passed into law, this would be the fourth round of refunds over Kemp's tenure as governor. The amounts and eligibility requirements are expected to be the same as last year's Georgia tax rebates program.

$250 for single and married filing separate filers.
$375 for heads of household.
$500 for married filing joint filers.

Additionally, Kemp signaled that he intends to use the state's massive surplus to accelerate the income tax cut to 4.99%, which partially aligns with the state Senate committee's proposal to end the Georgia state income tax.

However, the 2027 proposed budget makes no mention of cutting tax benefits outlined in the state Senate committee plan. Instead, Kemp proposed additional payouts to teachers and state employees amounting to $2,000 per individual.

"Even with the rebate and tax cuts that my office will propose this legislative session," Kemp remarked during his final State of the State address, "Our state's rainy day fund and strategic reserves will stand at over $10 billion."

The proposed 2027 budget needs approval by the state legislature before becoming law.

Stay tuned for more updates.

Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.