Georgia's IRC conformity statute (HB 1162, signed April 22, 2024) adopts the Internal Revenue Code as of January 1, 2024 but explicitly excludes §168(k). Georgia STR investors get the full federal deduction with a 100% Georgia add-back — at the 5.19% flat rate, that's ~$7,785 Year-1 state savings deferred on a $150,000 federal deduction. Cross-reference our all-50-states conformity guide to see how Georgia lines up against every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Run your own numbers in the Conformity Tool →
Three Georgia STR markets rank in the DepreciMax Top 50 — all subject to the same add-back
The DepreciMax 2026 STR Bonus Depreciation Study ranks 197 US STR markets by median bonus-eligible percentage. Georgia contributes three markets to the Top 50:
- Blue Ridge, GA (#9) — North Georgia mountain cabin market. Very low land value ratios, heavy 15-year land-improvement content (decks, hot tubs, fire pits, outdoor kitchens), FF&E-heavy furnished rentals.
- Lake Lanier, GA (#24) — Lakefront cabin and dock property market north of Atlanta. Similar profile to Blue Ridge with additional 15-year dock and boathouse content.
- Savannah, GA (#40) — Historic urban STR market. Higher land ratios than the mountain markets but strong FF&E and interior-finish density on renovated historic buildings.
All three markets face the same Georgia state layer: 100% §168(k) add-back at the 5.19% flat individual rate. The state add-back doesn't change property selection — it changes the Year-1 state cash-flow profile, and it's linear in the deduction size.
HB 1162 (2024) — why Georgia stayed decoupled
Georgia's April 2024 conformity bill (HB 1162) advanced Georgia's IRC conformity date from a prior fixed date to January 1, 2024. That kind of date-advance bill is usually where states choose to align (or refuse to align) with recent federal changes. Georgia's General Assembly explicitly retained the §168(k) exclusion codified in O.C.G.A. §48-7-21(b)(9). HB 1162 also kept Georgia decoupled from §1400L (Liberty Zone) and §1400N(d)(1) (GO Zone) provisions.
Georgia's decision fits a pattern seen in other states — the precedent for a state advancing IRC conformity while affirmatively excluding OBBBA-era §168(k) is California's SB 711 (October 2025), which moved California's conformity to January 1, 2025 while retaining the same §168(k) exclusion. See the California conformity guide for the parallel legislative posture.
How much the Georgia add-back costs at three deduction sizes
Georgia's flat 5.19% rate applies uniformly, so the Year-1 state miss scales linearly. Three example STR purchase scenarios:
| Federal §168(k) deduction | Federal Y1 savings (37%) | GA Y1 state miss (5.19%) | Combined Y1 net |
|---|---|---|---|
| $50,000 (small Blue Ridge cabin, ~$250K purchase) | $18,500 | -$2,595 | $15,905 |
| $150,000 (mid-tier Lake Lanier property, ~$700K) | $55,500 | -$7,785 | $47,715 |
| $500,000 (luxury Savannah historic conversion, ~$1.7M) | $185,000 | -$25,950 | $159,050 |
The Year-1 state miss is deferred, not lost. Georgia depreciation exceeds federal in years 2 through the property's MACRS life (5, 15, or 27.5 years depending on classification) and the taxpayer recovers the deferred deduction as a subtraction modification. Run any purchase price through the Georgia Conformity Tool.
Georgia vs. other decoupled Southeast states
Georgia's 5.19% flat rate places it in the middle of the Southeast add-back pack:
- Kentucky (3.5% flat, 100% add-back): ~$5,250 Year-1 miss on $150K federal deduction. Kentucky's IRC is frozen at 12/31/2001. See the Kentucky conformity guide.
- Georgia (5.19% flat, 100% add-back): ~$7,785 Year-1 miss. IRC as of 1/1/2024 per HB 1162, §168(k) explicitly excluded.
- South Carolina (6.0% top, 100% add-back): ~$9,000 Year-1 miss. Never adopted §168(k) via S.C. Code §12-6-50.
- Virginia (5.75% top, 100% add-back): ~$8,625 Year-1 miss. Fixed-date IRC conformity with explicit §168(k) exclusion.
For a Blue Ridge investor comparing against a Great Smoky Mountains (Tennessee) property, the state layer is meaningfully different. Tennessee has no individual income tax; Georgia has 5.19% × the full add-back. On identical bonus-eligible dollars, the Tennessee property produces ~$7,785 more in Year-1 after-tax cash. Compare both in the Conformity Tool.
What OBBBA changed for Georgia — and what stayed the same
OBBBA (P.L. 119-21, July 2025) restored 100% federal §168(k) permanently for property placed in service on or after January 19, 2025. That flowed automatically through rolling-conformity states (Colorado, Ohio, Utah, Kansas). Georgia is in a different bucket:
- Georgia's IRC conformity is fixed at January 1, 2024 (HB 1162) — before OBBBA. A future Georgia conformity bill would be required to move the date past January 19, 2025.
- Even if Georgia's General Assembly advances the conformity date, the O.C.G.A. §48-7-21(b)(9) §168(k) exclusion is a separate carve-out. Advancing the date does not automatically adopt bonus depreciation — as HB 1162 itself demonstrated.
- The federal §168(k) deduction is fully preserved for Blue Ridge, Lake Lanier, and Savannah investors — OBBBA doesn't change the federal side.
Practical mechanics — filing a Georgia STR return with bonus depreciation
The Georgia depreciation workflow for a §168(k)-claiming STR investor:
- Claim federal §168(k) on federal Form 4562 as normal. This drives the federal Schedule E loss that offsets W-2 income under the STR loophole.
- Recompute depreciation on Georgia Form 4562 (state version) without §168(k). Depreciable life remains the same as federal.
- Report the difference (federal depreciation minus Georgia depreciation) as an addition modification on Georgia Form 500.
- In subsequent years, Georgia depreciation typically exceeds federal (federal was front-loaded). Report the excess as a subtraction modification until full recovery.
- Track state-federal basis differences for disposition. Georgia capital gain/loss on sale must be recalculated using the Georgia basis.
The bigger picture: §168(k) is one lever in a broader accelerated-depreciation strategy. See our accelerated depreciation explained guide for how MACRS, §168(k), and §179 stack for a real estate investor.
Related state conformity guides
- Kentucky conformity guide
- California conformity guide
- North Carolina (partial)
- 50-state conformity hub
Model Georgia at any deduction size
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Open the Conformity Tool →Analyze a Blue Ridge or Savannah listing
DepreciMax's $99 property report — line-item finish classification with Georgia-specific state impact math.
Analyze a property →Frequently asked questions
Does Georgia conform to federal §168(k) bonus depreciation in 2026?
No. Georgia's IRC conformity statute (HB 1162, signed April 22, 2024) adopts the IRC as of January 1, 2024 but explicitly excludes §168(k). STR investors get the full federal deduction with a 100% Georgia add-back on the state Form 4562.
Did HB 1162 change Georgia's bonus depreciation position?
No — it preserved it. HB 1162 advanced Georgia's IRC conformity date to January 1, 2024 but retained the longstanding §168(k) exclusion codified in O.C.G.A. §48-7-21(b)(9).
How much does Georgia non-conformity cost a Blue Ridge STR investor?
On a $150,000 federal §168(k) deduction, a Georgia STR investor at the 5.19% flat rate misses ~$7,785 in Year-1 state tax savings. Federal savings of ~$55,500 at the 37% bracket are unaffected.
Which Georgia STR markets are in the DepreciMax Top 50?
Blue Ridge (#9), Lake Lanier (#24), and Savannah (#40). All three face Georgia's 100% §168(k) add-back at 5.19%.
What is the Georgia statute for §168(k) non-conformity?
O.C.G.A. §48-7-21(b)(9), retained by HB 1162 (2024). Georgia's IRC conformity does not adopt §168(k), §1400L, or §1400N(d)(1).
Does Georgia non-conformity kill the STR loophole in Blue Ridge or Savannah?
No. The STR loophole is a federal §469 mechanism. Georgia's add-back rule only changes state-level Year-1 timing. The federal STR loophole benefit is fully preserved.
Every state's §168(k) position, in one place
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