State-by-State Guide to Taxes on Retirees - Georgia
Tool | November 2019

State-by-State Guide to Taxes on Retirees

Georgia

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The Bottom Line
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Most 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 5% of their own taxes. The average combined state and local sales tax rate is 7.33%, which is an above-average rate. While the state doesn’t tax groceries, localities can.

State Sales Tax

4% state levy. Localities can add as much as 5%, and the average combined rate is 7.33%, according to the Tax Foundation. While the state doesn’t tax grocery food sales, localities can.

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).

Effective tax rate: 5.24% for single filers, 5.8% for joint filers.

For tax year 2019, the high rate is 5.75%. It will drop further in 2020, to 5.5%, if the governor and legislature reconfirm the reduction in that year’s legislative session.

Social Security

Benefits are not taxed.

Exemptions 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).

Railroad Retirement benefits are also exempt.

Property Taxes

In Georgia, residents pay an average of $1,000 in taxes per $100,000 of assessed home value.

Tax breaks for seniors: 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 (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.

Vehicle Taxes

Georgia levies a tax of 7% at registration. Electric vehicles are subject to a $200 annual licensing fee.

Inheritance and Estate Taxes

None.

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