Drake Tax - GA - New Tax Bill Non-Conformity (2025)
Article #: 19031
Last Updated: September 22, 2026
Georgia's 2026 conformity bill (H.B. 1199) updates the state's Internal Revenue Code conformity date to January 1, 2026. The changes generally apply to tax years beginning on or after January 1, 2025. While Georgia adopted many provisions from the federal One Big Beautiful Bill Act (OBBBA), it decoupled from several key federal tax changes, creating state-federal differences that may require addbacks for certain deductions.
If you claimed bonus depreciation or certain interest expense on your federal return but Georgia does not allow it, you will need to add it back to your Georgia taxable income.
State and Local Tax (SALT) Deduction Addback
For 2026, Georgia’s SALT deduction remains capped at $10,000, and you should adjust your return to reflect this and any other decoupled federal provisions to ensure compliance.
If your federal itemized deductions include state and local taxes in excess of $10,000, you may need a Georgia adjustment to reduce the deductible SALT amount to Georgia's $10,000 limitation. Report this addback on GA line 12b for the difference of the amount over $10,000 on Schedule A.
"No Tax on Tips" Deduction
Georgia does not conform to the federal "No Tax on Tips" provision. Any amount deducted on the federal return must generally be added back.
"No Tax on Overtime" Deduction
Georgia does not conform to the federal deduction for qualifying overtime pay. Any federal deduction claimed must generally be added back when determining Georgia taxable income.
"No Tax on Car Loan Interest" Deduction
The full amount deducted on the federal return must be added back.
Federal Bonus Depreciation
Georgia does not conform to federal bonus depreciation. Taxpayers who claimed federal bonus depreciation may be required to add back that deduction and recover the benefit using Georgia's depreciation rules.
Federal Business Interest Expense Limitation
Georgia does not conform to the federal changes made to the business interest expense limitation under IRC §163(j). As a result, businesses subject to these rules may need to compute their Georgia interest expense deduction separately from the federal calculation. Georgia generally continues to apply its pre-TCJA treatment of §163(j), so state and federal deductible amounts may differ.
Related Links
Note Note This new tax bill, was signed into law on July 4, 2025. The One Big Beautiful Bill Act (OBBB or OB3) is also being referred to by lawmakers as the Working Families Tax Cut Act. You may see one or both names used, but they refer to the same set of tax changes.