State-by-State Guide to Taxes on Retirees
Tool | December 2020

Georgia State Tax Guide for Retirees

State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees.

Georgia

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The Bottom Line
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Tax-Friendly

Ever wonder why so many retirees have Georgia on their minds? The Peach State's low-tax climate may have something to do with it. Social Security income is exempt from state taxes, and so is up to $65,000 of most types of retirement income for those age 65 or older ($130,000 per couple). (For those age 62 to 64, the maximum exemption is $35,000.) Retirement income includes pensions and annuities, interest, dividends, net income from rental property, capital gains, royalties, and the first $4,000 of earned income, such as wages.

The statewide sales tax is 4%, but jurisdictions can add up to 4.9% of their own taxes. The average combined state and local sales tax rate is 7.32%, which is pretty average. The statewide median property tax rate in Georgia is middle-of-the-road, too.

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: 5.75% (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)

Taxation of Social Security Benefits

Social Security benefits are not taxed by the state.

Tax Breaks for Other Retirement Income

Taxpayers 65 and older can exclude up to $65,000 of retirement income (up to $35,000 for taxpayers age 62 to 64). Eligible retirement income includes taxable pensions and annuities (including military pensions), taxable IRA distributions, interest, dividends, net income from rental property, capital gains, royalties, and the first $4,000 of earned income (such as wages).

Retired teachers can deduct contributions made between July 1, 1987, and December 31, 1989, to Georgia’s teacher retirement system that were taxed by the state.

Railroad Retirement benefits are also exempt.

Sales Tax

4% state levy. Localities can add as much as 4.9%, and the average combined rate is 7.32%, according to the Tax Foundation.

Groceries: Exempt from state tax, but local taxes may apply
Clothing: Taxable
Motor Vehicles: Exempt from state tax, but local taxes may apply
Prescription Drugs: Exempt

Real Property Taxes

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 (in effect, freezing their assessed value).

For those 65 and older who earn $10,000 or less, the homestead exemption is doubled, to $4,000. Many counties offer homestead exemptions that may be more beneficial to the taxpayer than the exemptions offered by the state.

Annual Car Taxes and Fees

No annual vehicle tax or fee is imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.

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