Does Georgia Tax Social Security and Retirement Income?

Georgia does not tax Social Security

Georgia starts from federal adjusted gross income and then removes Social Security. Whatever part of a benefit was taxable on the federal return, along with Tier 1 and Tier 2 benefits paid by the Railroad Retirement Board, is entered as a subtraction on Form 500, Schedule 1, and never reaches Georgia taxable income. The subtraction has no age test and no income limit. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

Social Security is also kept out of the retirement income exclusion. The exclusion instructions say that Social Security, Railroad Retirement and other income Georgia does not tax should not be included in the calculation, so a large benefit does not consume any of the $35,000 or $65,000 allowance. The full allowance stays available for pensions, account withdrawals and investment income. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

The federal government is a separate matter. Up to 85% of a benefit can be taxed on a federal return once other income passes fixed thresholds, wherever you live. Our taxable Social Security calculator shows how much of yours is counted.

Pensions are taxable above a $35,000 or $65,000 per-person exclusion

Georgia does not distinguish between private-employer pensions, state and local government pensions and federal civil service annuities. All are included in income in the amount taxed federally, and all count as retirement income for the exclusion. A taxpayer aged 62 to 64, or under 62 and permanently and totally disabled, can exclude up to $35,000; a taxpayer 65 or older can exclude up to $65,000. Retirement income above the cap is taxed at the flat rate. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

The exclusion is personal. It is available to the taxpayer and to the spouse, but each must qualify on a separate basis and each claims it against their own income on Form 500, Schedule 1, page 2. Income from jointly owned property is allocated 50% to each spouse. A couple in which one spouse holds nearly all the pension and IRA income can therefore run out of exclusion on that spouse while the other spouse’s allowance goes partly unused. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

Military retirement income has its own exclusion for younger retirees. For 2026, a retiree under 62 can exclude up to $17,500 of military retirement income, and a further $17,500 if they also have more than $17,500 of Georgia earned income. Each spouse must qualify on their own service. From age 62 a military pension is simply retirement income and falls under the general $35,000 or $65,000 exclusion. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

IRA and 401(k) withdrawals count toward the same exclusion

Taxable distributions from traditional IRAs and employer plans are part of federal AGI and so part of Georgia income. They are also retirement income: the Schedule 1 worksheet takes taxable IRA distributions and taxable pensions and annuities from the federal return and adds them to interest, dividends, capital gains and other unearned income before applying the cap. For a retiree whose pension, withdrawals and investment income together stay under $65,000, none of the withdrawal is taxed. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

A Roth conversion is reported on the federal return as a taxable IRA distribution, which is the figure the Georgia worksheet uses. A conversion that fits inside unused exclusion adds nothing to Georgia tax; a conversion that pushes a person past the cap is taxed at 4.99% on the excess. Qualified Roth withdrawals are not in federal AGI, so they neither appear on the Georgia return nor use up the exclusion. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

The exclusion is not available before age 62 except for permanent and total disability. A person who retires at 58 and lives on IRA or 401(k) withdrawals pays 4.99% on all of it above the standard deduction until the year they turn 62. (Georgia Department of Revenue: Retirement Income Exclusion)

To size a conversion against federal brackets and Medicare surcharges, see the Roth conversion calculator; for required withdrawals, the RMD calculator.

Investment income is taxed at 4.99% but counts as retirement income

Georgia has no separate rate for long-term capital gains or qualified dividends. What sets it apart is the definition of retirement income, which includes interest, dividends, capital gains, net rental income and royalties as well as pensions and annuities. From age 62, portfolio income in a taxable brokerage account is sheltered by the same exclusion that covers a pension. (Georgia Department of Revenue: Retirement Income Exclusion)

Interest and dividends on U.S. government obligations are subtracted from Georgia income. Interest on municipal bonds issued by other states, which is exempt federally, is added back; interest on bonds issued by Georgia and its political subdivisions stays exempt. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

For 2026 Georgia taxes all taxable income at a single flat rate of 4.99%, and the standard deduction is $15,000 for single filers, heads of household and married people filing separately and $30,000 for married couples filing jointly. Both figures are new for 2026. (Georgia Department of Revenue: Important Tax Updates (2026 income tax changes))

The standard deduction is a flat amount by filing status and does not increase at 65. HB 463 also raises the personal exemption for each dependent from $4,000 to $5,000. Age-based relief on the Georgia return comes through the retirement income exclusion instead. (Georgia General Assembly, House Bill 463 (2026) as passed: rate, standard deduction and retirement exclusion amendments)

Georgia taxable income is federal adjusted gross income, plus and minus the Schedule 1 adjustments, less either the Georgia standard deduction or federal itemized deductions. The federal standard deduction is not used. On the 2025 return the rate was 5.19% and the standard deduction $12,000 or $24,000. A couple who are both 65, each with at least $65,000 of retirement income of their own, pay no Georgia tax until that income, not counting Social Security, exceeds $160,000: $130,000 of exclusions plus the $30,000 standard deduction. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

The retirement income exclusion is Georgia’s main senior break: $35,000 per person from age 62 and $65,000 per person from age 65. The date of birth is entered on Schedule 1, and a person qualifying through disability must give the date of disability. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

Up to $5,000 of the exclusion can be earned income such as wages or self-employment income. Earned income above $5,000 is fully taxable even if the person has room left under the cap. Rental, royalty or partnership income that is subject to self-employment tax, and S corporation income from a business the taxpayer materially participates in, is treated as earned income for this purpose. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

Lottery and gambling winnings are not retirement income and cannot be excluded. Part-year residents and nonresidents must prorate the exclusion, with the earned and unearned portions prorated separately by the share of each that is Georgia-source. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

The same three households appear on every state page, so the figures can be compared across states. Each is a full-year resident taking the standard deduction, with no dependents. The figures are state income tax only: any county, city or school district income tax is described on this page but not added in. Pension income is from a private employer, and IRA figures are taxable withdrawals from traditional accounts. The state tax is our calculation from Georgia's published 2026 rules; it is an illustration, not a return.

These households also owe federal income tax, which does not change with the state. The tax bracket calculator and the guide to taxes in retirement cover that side.

Georgia property tax is levied by counties, cities and school districts on 40% of fair market value. The statewide standard homestead exemption takes only $2,000 off that assessed value for county and school taxes, so most of the relief a retiree receives depends on the county. The Department of Revenue notes that exemptions offered by counties are generally more beneficial than the state ones. (Georgia Department of Revenue: Property Tax Homestead Exemptions)

Tax Foundation figures drawn from Census data put Georgia property taxes at 0.79% of owner-occupied home value in 2024, 25th among the states. This is a comparative statewide figure; rates in metro Atlanta counties and in rural counties differ considerably. (Tax Foundation, Property Taxes by State and County, 2026 (comparative figures from Census ACS data))

Under the Georgia Constitution, counties, cities and school districts can enact their own homestead exemptions for county, school or municipal taxes, often with age and income conditions. Several counties, among them Cobb, Fulton, Gwinnett, DeKalb, Cherokee and Forsyth, have adopted exemptions that freeze the assessed value of a homestead at a base year for as long as the owner lives there. Whether a county exempts seniors from school taxes is therefore a question for the county tax commissioner, not the state. (Georgia Department of Revenue: Property Tax Homestead Exemptions)

Since 2025 a statewide floating homestead exemption created by HB 581 (2024) limits growth in the taxable value of a homestead. The exemption equals the amount by which the current assessed value exceeds an adjusted base-year value, and from 2026 the base rises each year by the change in the Consumer Price Index. Counties, cities and school districts were allowed to opt out, so coverage varies by taxing jurisdiction. (Georgia Department of Revenue, Local Government Services Informational Bulletin 2025-01: Floating Homestead Exemption)

The state sales and use tax rate is 4%. Counties and other local jurisdictions add their own sales taxes, and the local rate that applies is generally the one where the buyer receives the goods. Most services are not taxed. (Georgia Department of Revenue: What is Subject to Sales and Use Tax?)

The Tax Foundation puts Georgia’s average combined state and local rate at 7.49% as of January 2026, 18th highest in the country, with an average local add-on of 3.49%. (Tax Foundation, State and Local Sales Tax Rates, 2026 (comparative figures))

Groceries are exempt from the 4% state tax but not from local sales taxes. The exemption covers food and food ingredients bought for consumption off the premises and does not extend to prepared food, alcohol, dietary supplements or tobacco. (Georgia Department of Revenue, Letter Ruling SUT-2016-13 (food and food ingredients, O.C.G.A. 48-8-3(57)))

Drugs that can be dispensed only by prescription for the treatment of people are exempt from Georgia sales and use tax. (Georgia Department of Revenue, Letter Ruling SUT-2013-18 (prescription drugs, O.C.G.A. 48-8-3(47)))

Georgia has no estate tax and no inheritance tax. State law provides that on and after July 1, 2014 no estate taxes are levied and no estate tax returns are required. Before that, the Georgia tax was tied to the federal credit for state death taxes and had not applied to deaths after December 31, 2004. No tax waiver is needed to transfer a decedent’s securities or other assets. (Georgia Department of Revenue: Estate Tax FAQ (O.C.G.A. 48-12-1))

The federal estate tax applies in every state. The estate tax calculator estimates both the federal tax and any state tax.

HB 463, enacted in 2026, set the rate at 4.99% for tax years beginning on or after January 1, 2026 and schedules further cuts of 0.125 percentage points a year from 2027 until the rate reaches 3.99%. Each cut is delayed by a year if, as of December 1, the Governor’s revenue estimate is not at least 3% above the current year’s, the prior year’s net revenue was not above each of the three preceding years, or the Revenue Shortfall Reserve cannot cover the cost. (Georgia General Assembly, House Bill 463 (2026) as passed: rate, standard deduction and retirement exclusion amendments)

The same law raises the standard deduction by $375 a year for single filers and $750 a year for joint filers from 2027 until it reaches $18,000 and $36,000, subject to the same revenue tests. It also raises the retirement income exclusion for people 65 or older from $65,000 to $70,000 per person for tax years beginning on or after January 1, 2027. The $35,000 amount for ages 62 to 64 does not change. (Georgia General Assembly, House Bill 463 (2026) as passed: rate, standard deduction and retirement exclusion amendments)

HB 266, signed in 2025, rewrites the military retirement exclusion for tax years beginning on or after January 1, 2027. Retirees under 65, rather than under 62, will be able to exclude up to $65,000 of military retirement income with no earned-income condition, and a person cannot claim it together with the general retirement income exclusion. (Office of the Governor of Georgia, House Bill 266 (2025) as signed: military retirement income exclusion)

Georgia did not adopt the federal deductions for overtime and tips. Instead, for 2026, up to $1,750 of each can be excluded from Georgia taxable income. (Georgia Department of Revenue: Important Tax Updates (2026 income tax changes))

HB 1000, signed on March 20, 2026, paid a one-time surplus refund of up to $250 for single filers, $375 for heads of household and $500 for married couples filing jointly to eligible taxpayers who had a 2024 tax liability. It is a one-off payment and not a change to the ongoing rules. (Georgia Department of Revenue: Georgia Surplus Tax Refund (HB 1000))

Full-year residents are taxed on all income regardless of where it arises, and a credit is allowed for tax paid to another state. The filing rules apply for as long as a person’s legal residence is Georgia, even while they live outside the state temporarily. A resident must file when required to file a federal return or when income exceeds the standard deduction. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

Someone who is a legal resident for only part of the year files Form 500 with Schedule 3, which separates Georgia income from other income and prorates the deductions. The retirement income exclusion is prorated too. A person who moves to Georgia in July at 66 does not receive the full $65,000 for that year. (Georgia Department of Revenue, 2025 IT-511 Individual Income Tax Booklet (Form 500 and Schedule 1 instructions))

Federal law (4 U.S.C. 114) bars a state from taxing the retirement income of a non-resident. A pension earned in New York or Illinois is taxed only by Georgia once the retiree is a Georgia resident, and falls under the exclusion like any other pension. A Georgia state pension paid to someone who has moved to Florida is not taxed by Georgia. (4 U.S.C. 114, Limitation on State income taxation of certain pension income)