Planning for your retirement can be complex, and taxes are likely a major concern. Fortunately, Georgia is a favorable state for retirement taxes. This guide will cover the basics you need to know about retirement taxes in Georgia.
7 FAQs About Retirement Taxes in Georgia
What types of retirement income does Georgia tax?
Most retirement income, including pensions, annuities, and withdrawals from IRAs and 401(k)s, is taxable in Georgia. However, the state offers a generous retirement income exclusion for older adults, significantly reducing the tax burden.
What is the retirement income exclusion, and how does it apply to seniors?
This exclusion allows retirees to deduct some of their retirement income from state taxes. To qualify for this exclusion, the individual must be 62 or older or permanently disabled. The exclusion applies to various retirement income sources, including pensions, IRAs, 401(k)s, and military retirement income. The good news? This exclusion has a high cap: $65,000 per taxpayer and $130,000 for married couples filing jointly.
Does Georgia tax Social Security benefits?
No, Georgia doesn’t tax Social Security benefits. However, depending on your total income, you may owe federal income taxes on a portion of your benefits.
How will taxes work when withdrawing money from an IRA or 401(k)?
Withdrawals from IRAs and 401(k)s are taxed as income, federally and by Georgia. However, withdrawals are not subject to taxes if the contributions were after-tax income (Roth accounts). Furthermore, Georgia’s retirement income exclusion may cover some of these withdrawals.
Are there any other tax breaks for older Georgia residents?
Georgia offers a tiered retirement income exclusion. Those aged 62 to 64 can exclude up to $35,000 of their retirement income, and those 65 and older can exclude up to $65,000. This exclusion applies to various income sources, including interest, dividends, and even the first $4,000 of earned income. Additionally, homeowners aged 62 and older may qualify for additional property tax exemptions on their primary residence.
Are military benefits taxed in Georgia?
Georgia taxes military retirement pay. However, a recent law introduced some welcome exemptions. Veterans aged 62 and younger can now exclude up to $17,500 of their military retirement pay from state taxes. There are additional exemptions for veterans with earned income above a certain threshold.
How will the total tax burden of older adults change when retiring in Georgia?
Georgia’s tax structure can benefit retirees. Depending on your income sources and filing status, you may see a substantial decrease in your overall tax burden.
Ready to plan your retirement in Georgia?
Georgia’s tax structure makes it an attractive option for retirees. However, this is just a starting point. Every situation is unique, so consulting a tax professional is always recommended. It’s also helpful to visit the Georgia Department of Revenue website for more details.
Innovative, Experienced, and Trusted Senior Living Community
Looking for exceptional service and care for your loved one? We welcome you to our senior living communities, where the health and well-being of our residents are our top priority. Please visit our contact page, and we’ll answer your questions.
Thanks for visiting!
