Georgia offers a Retirement Income Exclusion that may allow some or all of your military retirement income to be excluded from Georgia taxable income.
If you receive military retirement benefits, Georgia will generally include the income in your Federal Adjusted Gross Income (AGI) and then determine whether all or a portion of that income qualifies for the Georgia Retirement Income Exclusion.
Program Entry 🖥️
To access this section, navigate to:
Georgia → Subtractions from Income → Georgia Retirement Exclusion
Who Qualifies for the Georgia Retirement Income Exclusion? 🇺🇸
You may qualify if:
- You are 62 years of age or older, or
- You are permanently and totally disabled to the extent that you are unable to perform any gainful employment.
The program will automatically calculate the allowable exclusion based on the information entered in the return.
Retirement Exclusion Limits 💰
The Georgia Retirement Income Exclusion is based on age:
- Under age 62: Only taxpayers who are permanently and totally disabled may qualify.
- Age 62 through 64: Up to $35,000 of qualifying retirement income may be excluded.
- Age 65 and older: Up to $65,000 of qualifying retirement income may be excluded.
For Married Filing Jointly returns, each spouse may qualify separately if eligibility requirements are met.
What Income Qualifies? 📋
The Retirement Exclusion Worksheet is used to identify qualifying retirement income, including:
- Military retirement pay
- Pension income
- Annuity income
- Interest income
- Capital gains or losses
- Rental income
- Partnership and S Corporation income
- Certain business income
- Other qualifying retirement-related income
The program automatically allocates much of this information between the taxpayer and spouse using information transferred from the Federal return. Adjustments can be made if the automatic allocation is not correct.
What Information Must Be Entered? ✏️
Georgia State Refunds
If Federal Form 1040, Line 10 includes a Georgia state tax refund, enter that amount in the Georgia Retirement Exclusion section.
Disability Information
If you are claiming the exclusion based on a qualifying disability and are under age 62, you must enter:
- Type of disability
- Date the disability began
Retirement Exclusion Worksheet
The worksheet allows you to review and adjust:
- Trade or business income
- Capital gains and losses
- Rental, royalty, partnership, and S Corporation income
- Other gains and losses
- Interest income
These amounts are used to determine the allowable Georgia Retirement Income Exclusion.
Is Military Retirement Income Taxable? 🤔
For many Georgia taxpayers, military retirement income may qualify for the Georgia Retirement Income Exclusion.
If your qualifying retirement income falls within the allowable exclusion limits, some or all of your military retirement income may not be subject to Georgia income tax.
The exact exclusion depends on:
- Your age
- Disability status (if applicable)
- The amount and type of retirement income received
- Other qualifying income reported on the return
Important Notes ⚠️
- Military retirement income is not automatically exempt from Georgia tax.
- The program uses the Retirement Exclusion Worksheet to determine the amount that qualifies for exclusion.
- If filing a joint return, income may need to be allocated between spouses.
- Review all entries carefully, especially if adjustments are made to the worksheet amounts.