Bill > HB375

This bill proposes to exclude overtime compensation from state income tax for hourly wage employees in Georgia, beginning January 1, 2026. Specifically, the legislation would exempt any amount received by full-time employees for work performed over 40 hours per week, as well as overtime compensation defined by the federal Fair Labor Standards Act. For employees covered by the National Railway Labor Act, the exemption would apply to overtime compensation as defined in their collective bargaining agreements. Employers will be required to submit monthly or quarterly reports to the state's tax department detailing the total amount of overtime compensation paid and the number of employees receiving such compensation. These reports must be submitted by the due date of corresponding withholding tax returns, and the tax department will have the authority to request additional information and develop rules for implementing this tax exemption. The bill will become effective on July 1, 2025, and will apply to all taxable years starting on or after January 1, 2026, with the goal of providing financial relief to workers who earn overtime pay.

Budget and Finance

https://www.legis.ga.gov/legislation/70137