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Georgia taxes for delivery and rideshare drivers (2026)
Georgia cut its flat income tax rate to 4.99% for 2026 and raised the standard deduction to $15,000, and it did something different with tips: it declined the federal $25,000 deduction and instead wrote its own exclusion of up to $1,750 of cash tips for 2026 through 2028. For a driver that means a real but small state saving where the federal one is large.
Georgia drivers should plan from three numbers: the 4.99% rate, the $15,000 standard deduction, and the $1,750 cash-tips cap. Choose Georgia in the 1099 gig tax calculator and compare its pre-filled rate with the example below, because the standard deduction makes the true effective rate much lower than 4.99% at gig-sized incomes.
Key numbers
| Item | What applies |
|---|---|
| Income tax rate, 2026 | Flat 4.99% (HB 463) |
| Standard deduction (single) | $15,000 (was $12,000) |
| Federal tips deduction | Not followed. Georgia has its own exclusion of up to $1,750 of cash tips, 2026 to 2028 |
| Estimated tax form | Form 500-ES, through the Georgia Tax Center |
| Estimated tax dates | April 15, June 15, September 15, January 15 |
| Local income tax | None found |
| Future rate and deduction changes | Annual rate cuts and $375 standard deduction steps from 2027, conditional |
What House Bill 463 changed
Governor Kemp signed House Bill 463 on May 11, 2026. The Governor's office describes it as lowering the state income tax rate from 5.19% to 4.99% beginning January 1, 2026, providing for further annual reductions and increases in the standard deduction, and introducing temporary exclusions for qualified overtime compensation and cash tips through 2028. In the bill text the rate for 2026 is 4.99%, and the standard deduction for a single filer rises from $12,000 to $15,000 (from $24,000 to $30,000 for a joint return). From 2027 the bill adds $375 a year to the single deduction, up to a cap, subject to delay provisions, and lowers the rate by 0.125 percentage point a year toward a 3.99% floor if revenue conditions are met. Treat the later steps as conditional rather than certain.
One practical point for the 2026 tax year: the bill says the rate applies retroactively to January 1, 2026, so estimates made before May at the old 5.19% rate were a little too high.
Worked example: a single full-time driver
Gross receipts $46,000 including $5,000 of tips, 6,200 miles from January to June and 6,600 from July to December, and $900 of other expenses. The federal engine gives net profit $35,589.00 and adjusted gross income $33,074.72. Georgia taxable income is $16,324.72 after the $15,000 standard deduction and the $1,750 tips exclusion.
- Georgia tax at 4.99%: $814.60, an effective rate of 2.46% of AGI
- Federal income tax: $957.98 after a $5,000 tips deduction
- Self-employment tax: $5,028.57
- Total tax: $6,801.15, or 14.8% of gross to set aside; about $203.65 of that is Georgia tax per quarter
The exclusion saves this driver $87.32 of Georgia tax. The remaining $3,250 of tips are taxed at 4.99% ($162.18) because the exclusion stops at $1,750. Compare the federal side: the $5,000 federal deduction applies in full. A driver in Georgia therefore gets the whole federal benefit, but only a sliver at the state level.
The Georgia tips exclusion in detail
The Department of Revenue's "Important Tax Updates" page says Georgia did not conform to the federal overtime and tips exemptions, but that up to $1,750 of each may be exempted from the calculation of taxable net income. The bill text adds a paragraph to the state's list of income adjustments that covers "any amount up to $1,750.00 received in cash tips" for taxable years beginning on or after January 1, 2026, and repeals it on December 31, 2028. The definition of cash tips includes tips paid in cash or charged, but only if voluntary, not negotiated, and determined by the payor, in an occupation with a Treasury Tipped Occupation Code. Rideshare and delivery drivers appear on the federal list of tipped occupations, as explained in our tips deduction guide.
What we could not find is Department of Revenue guidance for self-employed drivers. The bill's reporting rules are written around employers, who must submit totals to the Department, and the Department's employer guide says employers report cash tips on Form G-1003. A driver with no employer will probably claim the exclusion on the individual return, but check the 2026 instructions when they appear, and keep your app tip records. There is no Georgia rule that tips must appear on a 1099, unlike the federal rule.
Estimated payments
Georgia uses Form 500-ES. The instructions say individuals must pay if they reasonably expect gross income above the total of their exemptions, estimated deductions, and $1,000 of income not subject to withholding. The dates for a calendar-year filer are April 15, June 15, September 15, and January 15. Pay through the Georgia Tax Center or mail the voucher, and use Form 500-UET to compute any underpayment penalty. For federal payments use the quarterly payment guide.
A Georgia gig-worker law that is not a tax
The same May 2026 signing included House Bill 987, which the Governor's office says codifies a voluntary framework for independent contractors to receive portable benefits through dedicated accounts, allowing contributions without affecting their employment classification. It does not change what you owe, but it may matter to platforms that offer benefits. If benefit contributions are ever paid to you, ask whether they are taxable.
General information for tax year 2026, not tax advice. See the tips calculator for the federal saving.
Neighbouring North Carolina also has a flat rate but treats tips differently, as the North Carolina guide explains, and Florida has no income tax at all, as the Florida guide shows.
Frequently asked questions
Does Georgia follow the federal no tax on tips deduction?
Not exactly. The Department of Revenue says Georgia did not conform to the exemptions for overtime and tipped wages in the One Big Beautiful Bill Act, but that up to $1,750 of each may be exempted when figuring taxable net income. House Bill 463, signed May 11, 2026, adds an exclusion of up to $1,750 of cash tips for taxable years beginning in 2026, and it stands repealed on December 31, 2028.
What counts as cash tips under the Georgia exclusion?
The bill defines cash tips as cash received in an occupation that customarily and regularly receives tips, including tips from customers paid in cash or charged, but only if the amount is paid voluntarily without consequence for nonpayment, is not negotiated, and is determined by the payor. The occupation must have a Treasury Tipped Occupation Code. Delivery and rideshare drivers have codes on the federal list, but we did not find Department of Revenue guidance addressing self-employed drivers specifically.
What is the Georgia income tax rate for 2026?
A flat 4.99%, down from 5.19% for 2025, retroactive to January 1, 2026 under House Bill 463. The law allows further cuts of 0.125 percentage point a year from 2027 until the rate reaches 3.99%, but each cut is delayed a year if the state's revenue tests are not met.
What is the Georgia standard deduction for 2026?
House Bill 463 raises it to $15,000 for a single filer, head of household, or married person filing separately, and to $30,000 for a married couple filing jointly. It rises by $375 and $750 a year from 2027, subject to the bill's delay provisions.
Do I need to pay Georgia estimated tax?
The Form 500-ES instructions say a taxpayer must pay if they expect gross income above the sum of exemptions, estimated deductions, and $1,000 of income not subject to withholding. Payments are due April 15, June 15, September 15, and January 15, through the Georgia Tax Center or by voucher. A self-employed driver with more than a few thousand dollars of profit will usually need to pay.
Does Georgia have a local income tax?
We found none on individuals. Georgia's tax on your driving profit is the state's flat rate plus federal tax.
Sources
- Georgia General Assembly, HB 463 (as passed House and Senate): rate, standard deduction, cash tips paragraph and definitions, repeal date
- Office of the Governor, Gov. Kemp signs legislation lowering taxes (May 11, 2026): HB 463 and HB 987
- Georgia Department of Revenue, Important Tax Updates: Georgia did not conform to federal tips and overtime; up to $1,750 of each may be exempted
- Georgia Department of Revenue, Form 500-ES (2025 version): who must pay and due dates (the 2026 form is on the voucher page)
- IRS, What the "No Tax on Tips" deduction means for you; federal figures from our methodology page