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Tool | October 2015

State-by-State Guide to Taxes on Retirees

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Georgia

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The Bottom Line
Map of Georgia

Most Tax-Friendly

One of Kiplinger's top ten most tax-friendly states for retirees, the Peach State 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 age 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer. The statewide sales tax is 4%, but jurisdictions may add up to 4% of their own taxes. Full-time residents qualify for a homestead exemption, and seniors may qualify for additional deductions from property taxes.

State Sales Tax

4% (food and prescription drugs are exempt). But local taxes may add another 4%.

Income Tax Range

Low: 1% (on the first $1,000 of taxable net income for married couples filing jointly; on the first $750 for individual filers; and on the first $500 for married couples filing separately)

High: 6% (on taxable income over $10,000 for married couples filing jointly; on taxable income over $7,000 for individual filers; and on taxable income 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 are eligible for a retirement-income exclusion. Retirement income includes pensions and annuities, interest, dividends, net income from rental property, capital gains, royalties, pensions, annuities, and the first $4,000 of earned income, such as wages. For married couples filing joint returns with both members receiving retirement income, the maximum adjustment may be up to twice the individual exclusion amount. The retirement-income exclusion is $35,000 for residents ages 62 to 64. For residents 65 or older, the exclusion is $65,000. Railroad Retirement income is exempt.

IRAs

Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.

Private Pensions

Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.

Public Pensions

Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.

Property Taxes

Median property tax on Georgia's median home value of $141,600 is $1,352, according to the Tax Foundation.

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 10 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 may be 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 estate tax.

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