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Georgia 2022 Income Tax Updates

April 28, 2022

In April 2022, significant legislation was passed in Georgia addressing various income tax matters. HB 1058 provides a consolidated reporting election, available in tax year 2023, for affiliated groups that file a federal consolidated corporate return. This authorizes them to make an irrevocable 5-year election to file consolidated income tax returns in Georgia, eliminating the need for the Departments advance approval.

HB 1320 updates Georgia’s annual income tax conformity with the I.R.C. This conforms Georgia’s revenue code to the I.R.C. as of January 1, 2022.

HB 1437, signed by the Governor on April 26,2022, phases in a reduced personal income tax rate from 5.75% down to 4.99% by the 2029 tax year. The phase begins with a reduction to 5.49% beginning in 2024. The bill eliminates the progressive marginal tax rates and combines the personal exemption and standard deduction into a single, larger personal exemption, although itemized deductions would be retained for those that itemize for federal purposes. These personal income tax rate reductions would not apply to shareholders of a S Corporation, partners of a partnership, or members of an LLC when a PTE election is made. The 5.75% tax rate still applies to electing pass through entities on Georgia sourced income.