GEORGIA
Return to Retiree Tax Map
NICKNAME
The Peach State
BOTTOM LINE: TAX-FRIENDLY
Georgia is a peachy tax environment for retirees. Social Security income is exempt, and so is up to $35,000 of most types of retirement income. For those 65 and older, the 2012 exemption climbs to $65,000 per taxpayer. The statewide sales tax is 4%, but local jurisdictions can add up to 4% of their own taxes. Full-time residents qualify for a homestead exemption, and residents 65 and older may qualify for additional deductions from property taxes.
STATE SALES TAX
4% (food and prescription drugs are exempt). But local taxes may add an additional 4%.
INCOME-TAX RANGE
Low: 1% (on first $1,000 of taxable net income for married couples filing jointly, $750 for individual filers, $500 for married couples filing separately)
High: 6% (on taxable income over $10,000 for married couples filing jointly, over $7,000 for individual filers, over $5,000 for married couples filing separately)
SOCIAL SECURITY
Benefits are not taxed.
EXEMPTIONS FOR OTHER RETIREMENT INCOME
Taxpayers who are 62 or older, or permanently and totally disabled regardless of age, may be eligible for a retirement-income adjustment on their Georgia tax return. Retirement income includes income from pensions and annuities, interest income, dividend income, net income from rental property, capital-gains income and income from royalties. For married couples filing joint returns with both members receiving retirement income, the maximum adjustment for the applicable year may be up to twice the individual exclusion amount. Retirement income exceeding the maximum adjustable amount is taxed at the normal rate. The retirement-income exclusion for 2012 is $35,000 if ages 62 to 64, or younger and permanently disabled. If 65 or older, the amount is $65,000.
PROPERTY TAXES
A homeowner may pay a combination of county, city, school or state taxes, depending on location. Property is assessed at 40% of the fair market value. The average county and municipal millage rate is 30 mills, or $30 per $1,000 of assessed value. For 2012, state taxes are 0.2 mills, or 20 cents on each $1,000 of assessed value; the state property tax is being phased out to zero by 2016.
A standard homestead exemption is available to all homeowners who occupy their home as a primary residence. The owner may be granted a $2,000 exemption from state, county and some school taxes. The $2,000 is deducted from the 40% assessed value of the homestead.
Tax breaks for seniors: For homeowners 62 and older who earn $10,000 or less, up to $10,000 of their property's assessed value is exempt from school taxes. People 62 or older whose family income does not exceed $30,000 may qualify for an exemption from state and county property taxes equal to the amount by which the assessed value of the home exceeds the assessed value for the preceding tax year. Individuals age 65 and older can claim an exemption from all state property taxes on their home and up to ten acres of land surrounding the home. For those 65 and older who earn $10,000 or less, $4,000 of their property's value is exempt from state and county taxes as well. Many counties offer homestead exemptions that are more beneficial to the taxpayer than the exemptions offered by the state. The homestead exemption is deducted from the assessed value (40% of the fair market value) of the home.
INHERITANCE AND ESTATE TAXES
There is no inheritance tax or gift tax, and no estate tax.
Visit RetirementLiving.com for a complete rundown of taxes in Georgia.
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