ATLANTA — Georgia lawmakers started the year with talk of eliminating both the state income tax and the property tax for homeowners.
The goal proved elusive, but they did compromise on a scaled-back income tax cut and on legislation to decelerate the rapid increases in local property tax costs for homeowners.
And on Monday, Gov. Brian Kemp signed those two measures into law.
“We believe it is your money, not the government’s,” Kemp said.
The Senate had at first voted to eliminate the income tax on the first $50,000 in annual earnings for individuals and the first $100,000 for married couples filing jointly. The goal was to increase the cuts for higher earners over time until the tax was abolished altogether. But the bill Kemp signed into law is more modest.
House Bill 463 will immediately reduce the income tax rate to 4.99% from the current 5.19%, then gradually reduce it by another percentage point over eight years if state revenues remain strong. Income tax deductions would also rise by 50% over that period, from the current $12,000 for single filers, to $18,000 — and double that for married couples. Dependent deductions also would rise by $2,000 over eight years from the current $4,000.
The new law also waives income tax on the first $1,750 of overtime pay and cash tips retroactive to the beginning of the year and increases the amount of excluded retirement income for those 65 and older by $5,000.