Georgia’s 2025 Legislative Session: Notable Tax Changes Taxpayers Must Know

By: Jeff Glickman, SALT Partner

At a glance: 

• The main takeaway: Georgia Governor Brian Kemp signed into law several notable tax bills that were passed during the 2025 legislative session. 
• Assess the impact: These tax law changes include an income tax rate reduction, a one-time individual tax refund, and the revival of the state’s post-production tax credit.   
• Take the next step: Aprio’s State and Local Tax (SALT) team can help you assess the impact that the tax law changes in Georgia will have on you and your business.

Schedule a free consultation today to learn more! 

The full story

On April 4^th, the 2025 Georgia legislative session ended. This triggered a 40-day window ending on May 14, 2025 for Governor Kemp to sign or veto legislation. If he does neither, the bill automatically becomes law.

Below is a summary of six tax bills enacted into law during this session:

Tax Rate Reduction (HB 111)

This bill reduces the state’s individual and corporate income tax rate from 5.39% to 5.19% for the 2025 tax year. The passing of this bill accelerates the state’s income tax rate reduction plan enacted several years ago, which will ultimately see the state tax rate reduced to 4.99%. While the reduction applies to the 2025 tax year, it is not officially effective until July 1, 2025. Therefore, all tax payments (e.g., estimated tax payments, employee payroll withholding) due prior to July 1, 2025, should be calculated using the current 5.39% rate.

One-time Tax Refund (HB 112)

The State of Georgia will be providing a one-time tax refund for qualifying taxpayers that filed in 2023 and 2024. This refund is similar to the one that was provided a couple of years ago. Qualifying resident taxpayers will get the lesser of their 2023 Georgia income tax liability or:

• $250 for single filers
  • $375 for those filing as head of household
  • $500 for married/joint filers.

This credit will be processed automatically by the state once the 2024 return is filed. Qualifying nonresidents and part-year residents will receive prorated amounts.

IRC Conformity (HB 290)

Georgia’s annual Internal Revenue Code (IRC) conformity has been updated to January 1, 2025, for tax years beginning on or after January 1, 2024. There are no new decoupling provisions with this update and all existing decoupling provisions remain in effect.

Post-Production Tax Credit (HB 129)

This bill revives the state’s post-production tax credit for five years applicable for tax years beginning on or after January 1, 2026. The credit, which had expired after the 2022 tax year, provides post-production companies with at least $250,000 in Georgia payroll and a total of $500,000 in qualifying post-production expenses during a taxable year a transferrable tax credit equal to 20% of its qualifying post-production expenses.[1] If the original production is created exclusively in Georgia, the credit increases to 30%.

For each taxable year, there is an annual credit cap of $10 million, and the state has a procedure in place for companies to receive pre-approval on a first-come, first-served basis. Smaller post-production companies – those with Georgia payroll of at least $100,000 but less than $500,000 and qualified expenses of at least $100,000 but less than $500,000 – can receive a credit of 20% of qualified expenditures. There is a $1 million aggregate annual cap (separate from the $10 million cap) for the credit available to smaller post-production companies.

Catastrophic Event Savings Account (HB 511)

This bill enacts a new code section that allows taxpayers to establish a “catastrophe savings account” to pay for “qualified catastrophe expenses” resulting from a “catastrophic event.”[2]  Contributions made to those accounts are deductible for Georgia income tax purposes, and interest earned on those accounts is not subject to Georgia income tax. A “catastrophic event” is defined as “windstorms, cyclones, earthquakes, hurricanes, ice storms, tornadoes, high winds, floods, hailstorms, and any other weather events or occurrences, provided that such event or occurrence has been declared as a disaster or emergency by the Governor.”

Qualifying expenses are those paid to cover homeowner insurance deductibles on a taxpayer’s primary residence and other expenses incurred to repair or replace damage to a taxpayer’s primary residence not covered by insurance. A taxpayer is allowed to establish one of these accounts which then must be labeled as such and must specify that the purpose of the account is to cover qualifying catastrophe expenses. Contribution amounts are limited as follows:

• If a taxpayer’s deductible is $1,000 or less: $2,000
  • If a taxpayer’s deduction is greater than $1,000: the lesser of twice the amount of the deductible or $25,000
  • If a taxpayer is self-insured: the lesser of $25,000 or the fair market value of the primary residence.

Extension of Time to Appeal or Protest (HB 141)

Effective July 1, 2025, this bill extends the time that a taxpayer has to protest a tax assessment or a denial of a refund claim from 30 to 45 days. This extension also applies to the time allowed to appeal the denial of a petition to request alternative apportionment under O.C.G.A. § 48-7-31(d)(2)(C). However, not all protests or appeal periods have been extended, so it is important to review your specific situation and consult with a tax advisor.

The bottom line

Aprio’s SALT team regularly assist clients with assessing the impact of state tax law changes. We constantly monitor these and other important state tax topics, and we will include any significant developments in future issues of the Aprio SALT Newsletter.

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[1] See O.C.G.A. § 48-7-40.26A

[2] The new code section is O.C.G.A. § 48-7-28.5.