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Georgia Retirement Tax Friendliness

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Overview of Georgia Retirement Tax Friendliness

Georgia does not tax Social Security retirement benefits and provides a deduction of $65,000 per person on all types of retirement income for anyone 64 or older. The state’s sales tax rate and property tax rate are both relatively moderate. Georgia has no state inheritance or estate tax.

This calculator reflects the changes under the 2018 Trump Tax Plan.
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You will pay of Georgia state taxes on your pre-tax income of
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Quick Guide to Retirement Income Taxes
is toward retirees.
Social Security income is taxed.
Withdrawals from retirement accounts are taxed.
Wages are taxed at normal rates, and your marginal state tax rate is %.
  • Our Tax Expert

    Jennifer Mansfield, CPA Tax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

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Georgia Retirement Taxes

Photo credit: ©iStock.com/omersukrugoksu

Are you planning for retirement with Georgia on your mind? We don’t blame you. The Peach State has a lot to offer. It has big, culturally-rich cities like Atlanta. It has charming colonial towns like Savannah. It has pristine beaches on the Atlantic Coast. It is even home to one of the world’s most famous golf courses, in Augusta. Georgia is also one of the most retirement tax-friendly states in America.

Is Georgia tax-friendly for retirees?

Very. It does not tax Social Security and provides a deduction of $65,000 per person on all types of retirement income for anyone age 65 and older. Meanwhile, the state’s sales tax rate and property tax rate are both relatively moderate. Georgia has no state inheritance or estate tax.

Is Social Security taxable in Georgia?

No. When filing income taxes in Georgia, you should subtract any Social Security that is included in the Adjusted Gross Income on your federal tax return from your income on your Georgia tax return. That means none of your Social Security income will be subject to tax.

Are other forms of retirement income taxable in Georgia?

Yes, but there is a significant tax exclusion available to seniors on all retirement income. For anyone age 62 to 64, the exclusion is $35,000 per person. For age 65 or older, the exclusion is $65,000 per person. That applies to all income from retirement accounts and pensions.

If you have less than $65,000 in retirement income, you will not pay taxes. Up to $4,000 of that can be applied to earned income (from wages, salary and so on). Retirement income above that ceiling, will be combined with other sources of income and taxed at Georgia’s personal income tax rates, shown in the table below.

Income Tax Brackets

Single Filers
Georgia Taxable IncomeRate
$0 - $7501.00%
$750 - $2,2502.00%
$2,250 - $3,7503.00%
$3,750 - $5,2504.00%
$5,250 - $7,0005.00%
$7,000+6.00%
Married, Filing Jointly
Georgia Taxable IncomeRate
$0 - $1,0001.00%
$1,000 - $3,0002.00%
$3,000 - $5,0003.00%
$5,000 - $7,0004.00%
$7,000 - $10,0005.00%
$10,000+6.00%
Married, Filing Separately
Georgia Taxable IncomeRate
$0 - $7501.00%
$750 - $2,2502.00%
$2,250 - $3,7503.00%
$3,750 - $5,2504.00%
$5,250 - $7,0005.00%
$7,000+6.00%
Head of Household
Georgia Taxable IncomeRate
$0 - $1,0001.00%
$1,000 - $3,0002.00%
$3,000 - $5,0003.00%
$5,000 - $7,0004.00%
$7,000 - $10,0005.00%
$10,000+6.00%

How high are property taxes in Georgia?

Somewhat below average. Homeowners in Georgia pay about $930 in annual property taxes per $100,000 in home value. Additionally, there are a number of exemptions that can help seniors in need of property tax relief.

What is the Georgia homestead exemption?

The Georgia homestead exemption is available to every homeowner who occupies his or her home as a primary, permanent residence. It exempts the first $2,000 in assessed value (equal to about $5,000 in market value) from property taxes.

Seniors age 65 or older may be eligible for a double homestead exemption. To qualify, the applicant’s total household income, not including Social Security and pension income, cannot exceed $10,000 annually.

Other forms of property tax relief for retirees in Georgia include an exemption of all property value accumulated after the “base year” in which a senior age 62 or older applies.

So if your home is worth $80,000 when you apply and the value grows to $100,000 the next year, you will only pay property taxes on that first $80,000. If the property value grows to $150,000 over the course of the next seven years, you will still only pay taxes on the first $80,000. To qualify, household income must not exceed $30,000.

Photo credit: ©iStock.com/golfladi

How high are sales taxes in Georgia?

The Georgia statewide sales tax rate is 4%, which ranks in the bottom 20 of all U.S. states. Additionally, counties in Georgia collect their own sales taxes, with rates ranging from 2% to 4%. Including both those state and local rates, the average total sales tax rate in Georgia is 7%. That is slightly higher than the U.S. average.

Unlike many other states, Georgia does allow for the taxation of groceries, but only the local rates apply. So, expect to pay sales tax of 2% to 4% when shopping at the supermarket in Georgia.

What other Georgia taxes should I be concerned about?

Georgia eliminated its estate tax in 2014, so seniors don’t need to worry about that. The overall cost of living in Georgia is about 2% lower than the national average, so in general seniors can expect their everyday costs to be lower than those of the average American.

Most Tax Friendly Places for Retirees

SmartAsset’s interactive map highlights the places in the country with tax policies that are most favorable to retirees. Zoom between states and the national map to see the most tax-friendly places in each area of the country.

Highest
Lowest
Rank City Income Tax Paid Property Tax Rate Sales Tax Paid Fuel Tax Paid Social Security Taxed?

Methodology Our study aims to find the areas with the most tax-friendly policies for retirees. To do that we looked at how the tax policies of each city would impact a retiree with a $50,000 income. Our hypothetical retiree is getting $15,000 from Social Security benefits, $10,000 from a private pension, $15,000 from retirement savings like a 401(k) or IRA and $10,000 in wages.

To calculate the expected income tax this person would pay in each location we applied deductions and exemptions. This included the standard deduction, personal exemption and deductions for each specific type of retirement income. We then calculated how much this person would pay in income tax at the federal, state, county and local levels.

We calculated the effective property tax rate by dividing median property tax paid by median home value for each city.

In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a city by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.

For fuel taxes, we first distributed statewide vehicle miles traveled down to the city level using the number of vehicles in each county. We then calculated miles driven per capita in each city. Using the nationwide average fuel economy, we calculated the average gallons of gas used per capita in each city and multiplied that by the fuel tax.

For each city we determined whether or not Social Security income was taxable.

Finally, we created an overall index weighted to best capture the taxes that most affect retirees. We gave a 4x weighting to income tax, 3x weighting to property tax rate, a 2x weighting to sales tax and 1x weighting to fuel tax.

Sources: Internal Revenue Service, Social Security Administration, state websites, local government websites, US Census Bureau 2016 American Community Survey, Avalara, American Petroleum Institute, GasBuddy, UMTRI, Federal Highway Administration