Georgia’s 4.99% flat rate in 2026
Georgia now taxes all income, gains included, at one rate. HB 463 set 4.99% for 2026 and made it retroactive to January 1, so a sale early in the year uses the same rate as one in December. Every $10,000 of added Georgia taxable income costs $499 before credits.
Georgia has no general capital gains preference for individuals; long-term and short-term gains are taxed alike once they reach Georgia taxable income. Retirees can use Georgia’s retirement income exclusion, which covers investment income such as capital gains up to its yearly limit for qualifying ages. Georgia also taxes nonresidents on gains from Georgia real estate, and buyers may withhold on such sales.
| Parameter | Value | Effective | Primary source |
|---|---|---|---|
| 2026 individual income tax rate | Flat 4.99% of Georgia taxable income, down from 5.19% | Taxable years beginning on or after January 1, 2026 (retroactive under HB 463) | Georgia DOR 2026 Employer’s Tax Guide, What’s New |
| Withholding switch | 4.99% from May 11, 2026; 5.19% before that date | A payroll collection date, not the annual rate change | Georgia DOR 2026 Employer’s Tax Guide |
| Standard deduction | $15,000 single, head of household and married filing separately; $30,000 married filing jointly | Taxable years beginning on or after January 1, 2026 | Georgia DOR 2026 Employer’s Tax Guide, What’s New |
| Dependent deduction | $5,000 per dependent, up from $4,000 | Taxable years beginning on or after January 1, 2026 | Georgia DOR 2026 Employer’s Tax Guide, What’s New |
Use the retroactive 2026 rate, not the old withholding year
Georgia’s Department of Revenue updated its 2026 employer tax guide in September after HB 463 reduced the individual income-tax rate to 4.99%. The change applies retroactively to January 1, 2026. The withholding implementation date is a payroll collection date and does not turn an earlier 2026 sale into a transaction taxed at the previous annual rate.
The same update changes standard deductions and dependent amounts. Those provisions show why an income-tax rate and taxable income must be kept separate: a correct percentage multiplied by an unreconciled federal gain is not necessarily a complete Georgia liability. Confirm the Georgia adjustments and deductions in both versions of the state return.
For a prepared Georgia taxable-income comparison, this worksheet can apply 4.99% to each entered base before credits. That mode excludes credit changes and additional return effects. Use final prepared liabilities when those effects matter. Keep Georgia-specific deductions on the state worksheets rather than reducing the federal taxable-gain field. Save the September update with the calculation supporting the selected tax year.
Georgia preparation checklist
- HB 463 annual effective date
- Prepared Georgia taxable income in both scenarios
- Credits and state deduction changes