Georgia State Tax Overview (2024)

Quick Reference

Tax Structure

State Income Tax: Flat 5.39% (2024)

Note: Georgia transitioned from progressive brackets to a flat tax effective 2024. All taxable income is taxed at 5.39% regardless of filing status or income level.

Standard Deduction: Available (varies by filing status)

Retirement Income Exclusion: Up to $65,000 per person age 65+

File Organization

This overview links to detailed files for each topic:

• income-tax.md - Flat rate, calculation, and transition schedule
• retirement-income.md - Retirement exclusions and Social Security treatment
• credits-deductions.md - Standard deduction, credits, itemized deductions

Tax Rate (2024)

Flat Rate: 5.39%

Applies to all taxable income for all filing statuses.

Future rate reductions (scheduled): - 2024: 5.39% - 2025: 5.29% - 2026: 5.19% - 2027: 5.09% - 2028-2029: 4.99% (target)

Standard Deduction (2024)

Single: $12,000

Married Filing Jointly: $24,000

Married Filing Separately: $12,000

Head of Household: $18,000

Age 65+ or Blind: Additional $1,300 (single) or $1,050 (married) per person

Key Deadlines

Individual Returns: - April 15 (calendar year) - 6-month extension available (file Form IT-303)

Estimated Tax: - April 15, June 15, September 15, January 15 - Use Form 500-ES

Details

Flat Tax History

Legislative history:

HB 1437 (2022) replaced Georgia's six progressive brackets (1% to 5.75%) with a flat tax, effective 2024.

HB 1015 (2023) accelerated the rate reduction to 5.39% for 2024.

Current (2024): Flat 5.39%

Scheduled reductions: - 2025: 5.29% - 2026: 5.19% - 2027: 5.09% - 2028-2029: 4.99% (target)

Revenue triggers: - Future reductions contingent on state revenue meeting thresholds - Can be delayed if revenues insufficient - Legislature can adjust timeline

Impact: - Simplified tax calculation and withholding - Uniform rate regardless of income level - Compared to old system: higher earners pay less, lower earners may pay slightly more

Georgia Tax Computation

Starting point: Federal AGI

Steps: 1. Start with federal adjusted gross income (AGI) 2. Add Georgia additions 3. Subtract Georgia subtractions 4. Result = Georgia adjusted gross income 5. Subtract standard deduction or itemized deductions 6. Subtract personal exemptions 7. Result = Georgia taxable income 8. Apply tax rates 9. Subtract credits 10. Result = Georgia tax liability

Common Additions to Federal AGI

Interest from non-GA municipal bonds: - Interest from other states' bonds - Tax-exempt for federal, taxable for GA

State income tax refund: - If itemized on federal return - Taxable for GA (reciprocal)

Retirement income exclusion excess: - If excluded more than allowed (see retirement-income.md)

Common Subtractions from Federal AGI

Social Security benefits: - Fully exempt from GA tax - Even if taxable on federal return

Retirement income exclusion: - Age 62-64: up to $35,000 per person - Age 65+: up to $65,000 per person - See retirement-income.md for details

GA state income tax refund: - If included in federal AGI - Not taxable for GA

GA lottery winnings: - Exempt from GA tax - Other states' lottery taxable

Personal Exemptions (2024)

GA has personal exemptions:

Single: $7,400

Married Filing Jointly: $7,400 (combined, not each)

Married Filing Separately: $3,700

Head of Household: $7,400

Dependent exemptions: $4,000 per dependent

Example (MFJ with 2 children): - Personal exemption: $7,400 - Dependent exemptions: $8,000 (2 × $4,000) - Total exemptions: $15,400

Residency Rules

GA resident defined:

Domicile: - Legal residence with intent to remain - GA is permanent home

183-day rule: - Present in GA 183+ days during year - Deemed GA resident

Part-year residents: - File Form 500 - Allocate income between resident and nonresident periods - Credit for taxes paid to other states

Common Multi-State Scenarios

GA-FL border: - No reciprocal agreement - Credit method for taxes paid - Many FL residents with GA income (rentals, business)

GA-SC, GA-NC, GA-TN, GA-AL: - No reciprocal agreements - Must file both states if income in both - Credit for taxes paid to other state on Form 500, Schedule 3

Remote work: - GA does not have convenience of employer rule - Wages sourced to state where services performed - GA resident working remotely from GA: GA tax only

Credits Available

Low Income Credit: - $35 for single filers - $70 for married filing jointly - Income limits apply (see credits-deductions.md)

Dependent Care Credit: - Based on federal credit - Percentage of federal credit varies by income

Adoption Credit: - For qualified adoption expenses

Other credits: - See credits-deductions.md for comprehensive list

Filing Requirements

Must file GA return if:

Residents: - Gross income exceeds standard deduction plus personal exemption - Practical threshold: approximately $19,400 (single), $31,400 (MFJ)

Nonresidents: - Any GA-source income - No minimum threshold

Part-year residents: - File Form 500 - Report all income, allocate between resident and nonresident

Withholding

Employer withholding:

GA uses federal W-4: - Employees complete federal Form W-4 - GA applies GA tax rates to withholding - Form G-4 for additional GA-specific adjustments

Nonresident withholding: - Required for nonresidents working in GA - Same rates as residents

Estimated tax: - Required if expect to owe $500 or more - Quarterly payments - Form 500-ES

Safe harbor: - 90% of current year tax, OR - 100% of prior year tax (110% if AGI over $150,000)

Nonresident Taxation

GA taxes nonresidents only on GA-source income:

GA-source income includes:

Wages: - For services performed in GA - Days worked in GA allocated

Business income: - Income from GA trade or business - Partnership/S corp income from GA entity

Rental income: - From GA real property

Sale of property: - Gain on sale of GA real estate - Gain on sale of GA business interest

Gambling winnings: - From GA sources

Not GA-source: - Investment income (unless from GA business) - Wages for work outside GA - Pension income (even from GA employer)

Atlanta Special Considerations

No city income tax: - Atlanta does not impose city income tax - Unlike some other major cities

MARTA sales tax: - Additional 1% sales tax in MARTA counties - Fulton, DeKalb, Clayton - Income tax not affected

Audit Issues

Common audit triggers:

Retirement income exclusion: - Claiming more than allowed - Not meeting age requirements - Must have documentation

Residency changes: - Claiming to move to FL - Maintaining GA home - Days in state

Business income allocation: - Nonresidents with GA business - Apportionment of multi-state business

Tax-Friendly Features

For retirees: - No tax on Social Security - Retirement income exclusion ($65,000 at 65+) - Low property taxes in many areas

For businesses: - Moving toward flat tax - Various business credits - Job tax credits

For all: - Standard deduction available - Personal exemptions available - Flat 5.39% rate (simpler than progressive systems)

Citations

Georgia Code: - O.C.G.A. § 48-7-20 - Imposition of tax - O.C.G.A. § 48-7-27 - Tax rates - O.C.G.A. § 48-7-20.1 - Definitions - O.C.G.A. § 48-7-26 - Adjusted gross income - O.C.G.A. § 48-7-27 - Computation of tax

Regulations: - Ga. Comp. R. & Regs. 560-7-8-.01 - Personal exemptions - Ga. Comp. R. & Regs. 560-7-8-.34 - Retirement income exclusion

GA Department of Revenue: - Individual Income Tax Guide - https://dor.georgia.gov/taxes/individual-income-tax

Forms: - Form 500 - Individual Income Tax Return - Form 500-EZ - Short Form - Form 500-ES - Estimated Tax - Form IT-303 - Extension Application - Schedule 1 - Adjustments to Income - Schedule 2 - Itemized Deductions - Schedule 3 - Tax Credits

Other: - GA Tax Laws (annual publication) - Income Tax Rules and Regulations