GeorgiaTax Obligations Detailed

As of today, February 5, 2025, employers in Georgia have several state tax obligations in addition to federal requirements. These responsibilities primarily involve withholding, reporting, and remitting state income tax and unemployment insurance tax. Additionally, corporations face separate income and net worth taxes.

Georgia Income Tax

The state income tax rate in Georgia is a flat 5.39% for 2025. This rate will decrease by 0.10% annually until it reaches 4.99%. Employers must withhold this tax from employee wages and remit it to the Georgia Department of Revenue. Two methods are available for calculating withholding:

• Method A: Uses tax tables provided by the Department of Revenue.
• Method B: Uses a percentage calculation method.

Employers must file Form G1003, the Georgia Employer's Annual Tax Return, by January 31st of the following year, reporting the total state income tax withheld from employees during the previous year.

Georgia Unemployment Insurance (UI) Tax

The Georgia Department of Labor (GDOL) administers the state's unemployment insurance program. New employers pay a rate of 2.7%. Experienced employers have a rate based on their history, up to a certain percentage.

Employers must file quarterly UI tax and wage reports, Form DOL-4N, by the last day of the month following the end of each quarter. Payments are due concurrently with the report filing. UI taxes are only due on the first $9,500 of each employee's earnings per year. Employers with 100 or more employees are required to file online.

New Hire Reporting

All Georgia employers must report new hires and rehires within 10 days of their start date via Form NHR. This can be done online through the state's new hire reporting center.

Corporate Taxes

Georgia corporations are subject to a corporate income tax and a corporate net worth tax. The corporate income tax rate is 5.75% of taxable net income for corporations doing business or owning property in Georgia, or receiving income from the state. S-Corporations do not pay this tax directly; instead, it's paid by the shareholders.

Other Important Information

• Wage and Hour Laws: Georgia has a minimum wage for employees not covered by the Fair Labor Standards Act (FLSA).
• No PFML Taxes: Georgia does not have a Paid Family and Medical Leave (PFML) program and does not require employers to collect PFML taxes.
• Electronic Filing and Payment: The Georgia Department of Labor encourages electronic filing and payment of UI taxes through their online portal. Electronic Funds Transfer (EFT) is required for payments exceeding $500 in a single return.

This information is for general guidance only and is current as of February 5, 2025. It is recommended to consult with a qualified tax professional or refer to official government resources for specific situations and the latest updates.

Employee tax deductions in Georgia involve federal taxes (income tax, FICA), state income tax, and other deductions like retirement contributions and health insurance premiums.

Federal Taxes

• Federal Income Tax: This tax is progressive, meaning higher earners pay a larger percentage. The exact amount withheld depends on your W-4 form information, such as filing status and claimed allowances.
• FICA Taxes: These fund Social Security and Medicare.
  • Social Security Tax: 6.2% of your wages up to a cap of $176,100 for 2025.
  • Medicare Tax: 1.45% of all your wages. An additional 0.9% Medicare tax applies to wages exceeding $200,000 (for a total of 2.35%).

Georgia State Income Tax

• State Income Tax: Georgia has a flat income tax rate of 5.39% as of 2024, scheduled to decrease annually by 0.10% until it reaches 4.99%. The withholding is calculated based on your G-4 form information, including exemptions and allowances.

Other Deductions

• Pre-tax Deductions: These deductions, like 401(k) contributions, health insurance premiums, and flexible spending accounts (FSAs), reduce your taxable income.
• Post-tax Deductions: Examples include Roth 401(k) contributions and wage garnishments. These are taken after taxes have been calculated.

Georgia Tax Credits (For Employers)

• Georgia offers various tax credits for businesses, such as retraining program credits and investments in child care facilities. It's important to review these if you're an employer in Georgia as they can impact your overall tax liability. Note: Recent legislation (HB 1181) will impact some credit carryforward periods starting January 1, 2025.

Standard Deduction (For 2025)

• Single filers: $15,000
• Married filing jointly: $30,000
• Married filing separately: $15,000
• Head of household: $22,700 (based on 2024 standard deduction and $800 increase from 2024 to 2025.)

Additional Information

• Pension Contributions: Mandatory for most employees since January 1, 2019, with contributions from the employer, employee, and the government.
• Personal Exemptions: Eliminated federally since the 2017 Tax Cuts and Jobs Act.

It's important to stay up-to-date with changes to tax laws. This information is current as of today's date, February 5, 2025, and might change in the future.

In Georgia, the Value Added Tax (VAT) is a significant aspect of tax compliance for businesses.

VAT Rates and Registration

• Standard VAT Rate: 18% applies to most goods and services.
• Registration Threshold: Mandatory registration when taxable turnover exceeds GEL 100,000 in any continuous 12-month period. Voluntary registration is possible below this threshold. As of 2024, businesses with the same ownership must consider their aggregate turnover for registration purposes.
• Non-Resident Digital Service Providers: Foreign businesses providing digital services to Georgian consumers are required to register and pay VAT, regardless of revenue threshold.

VAT Filing and Payment

• General VAT: Filed and paid monthly.
• Non-Resident Digital Service Providers: Filed quarterly by the 20th of the month following the reporting quarter (e.g., Q1 filing due April 20th). Payment is due by the last day of the month following the reporting quarter (e.g., Q1 payment due April 30th). Payments can be made in GEL, USD, or EUR.

Exempt Goods and Services

• Certain goods and services are exempt from VAT, including some financial services, goods and services for oil and gas operations, specific medical and educational services, and tourist services for foreigners. Additionally, export, re-export, supplies to diplomats, certain pharmaceutical products, and some transportation services may be exempt with the right to reclaim input VAT.

Place of Supply Rules

• Goods: Deemed supplied in Georgia if located within the country at the time of transfer. For goods transported, the place of supply is Georgia if the shipment originates there.
• Services (B2B): The place of supply is where the recipient or their fixed establishment is located.
• Services (B2C): Generally, the place of supply is where the supplier or their fixed establishment is located. Certain services, such as telecommunications, electronic services, and financial services, are subject to special rules, where the place of supply may be the recipient's location.

Digital Services

• Foreign providers of digital services to Georgian consumers must comply with VAT regulations, regardless of turnover.
• VAT applies to various digital services, including telecoms, broadcasting, online media, and software.
• The place of supply is determined based on factors such as the customer's bank account, physical location, and IP address.

Additional Information

• Reverse-charge VAT applies to services provided by non-resident businesses to Georgian VAT payers.
• Penalties may be imposed for late filing and payment.

Please note that this information is current as of February 5, 2025, and may be subject to change.

Georgia offers a variety of tax incentives for businesses and individuals. These programs encourage job creation, investment, and specific industry growth within the state. As of February 5, 2025, the following incentives are available. Keep in mind that incentive programs and regulations can change, so checking for the latest updates is always recommended.

Job Creation and Investment

• Job Tax Credit: This credit offers $1,250 to $4,000 per year, for five years, for each new job created in specific sectors like manufacturing, distribution, or data processing, or for establishing a headquarters in these sectors. Businesses must create a minimum number of jobs within a year. In certain areas, this credit can also reduce payroll withholding obligations.
• Quality Jobs Tax Credit: Available to all industries, this credit targets "high-paying jobs" exceeding the county's average wage by at least 10%. Creating at least 50 such jobs within 24 months qualifies businesses for a credit between $2,500 and $5,000 per job, annually, for five years during a seven-year period.
• Rural Zone Incentives: Designated rural zones offer three types of credits: the Jobs Tax Credit ($2,000 per year for five years for each new full-time equivalent job created); the Investment Credit (25% of the purchase price of a property within the zone, capped at $125,000); and the Rehabilitation Credit (30% of qualified building renovation costs, capped at $150,000). Job creation (two new full-time equivalent jobs) is a prerequisite for all three. Nine new rural zones designated in late 2024 became active on January 1, 2025.

Industry-Specific

• Entertainment Production Tax Credit: Designed to support Georgia's film industry, this credit offers up to 90% of an individual's or head of household's contribution, and up to 75% of a corporation's income tax liability. The maximum credit is $5,000 for individuals or heads of household, $10,000 for married couples filing jointly. Unused credits can be carried forward for five years.
• Port Tax Credit Bonus: This bonus complements the Job Tax Credit and Investment Tax Credit for companies that increase imports/exports via Georgia ports by 10%. A base traffic of at least 10 TEU (Twenty-Foot Equivalent Units) is required.

Other Tax Incentives

• Tax Credit for Income Earned and Taxed in Another State: This credit aims to prevent double taxation for Georgia residents who also earn and pay taxes in another state. It's calculated proportionally to the income earned and taxed elsewhere.
• Work Opportunity Tax Credit (WOTC): This federal program, coordinated by the Georgia Department of Labor, provides incentives to employers who hire from specific target groups. The credit ranges from $1,200 to $9,600 per qualified employee, often $2,400 for adult new hires.

Credits related to Donations or Contributions

• Rural Hospital Organizations Expenses Credit: A credit for donations to qualified rural hospitals, approved by the State Revenue Commissioner. The credit amount is calculated based on a percentage of the donation and, for individuals, their filing status.
• Qualified Education Expense Credit: This credit is earned through contributions to student scholarship organizations (SSOs). It's capped at $10,000 for joint filers and $5,000 for single filers.
• PEACH Education Tax Credit (Qualified Education Donation Tax Credit): Provides a credit for contributions to the Georgia Foundation for Public Education, up to $2,500 for joint filers and $1,000 for single filers.

General Tax Information

• Georgia has a flat income tax rate, currently set at 5.39%. A legislative proposal is aiming to reduce it to 5.19% for the 2025 fiscal year.
• The state uses a single-factor apportionment for corporate taxes based on in-state sales, without a "throwback rule."
• Sales and use tax exemptions are available, with local variations possible.

This overview provides a summary of tax incentives in Georgia as of February 5, 2025. Consulting official resources like the Georgia Department of Revenue or seeking professional tax advice is crucial for detailed and up-to-date information.