The Itemized Deductions section of the Georgia return includes a field for adjustments related to investment interest expense incurred to produce income that is exempt from Georgia income tax.
In most cases, taxpayers will not need to make an entry in this section unless a portion of their federal investment interest deduction relates to income that Georgia does not tax.
Program Entry
To access this section, navigate to:
Georgia → Itemized Deductions
What Is Investment Interest Expense?
Investment interest expense is interest paid on money borrowed to purchase or carry investments, such as stocks, bonds, or other investments held to produce income.
A deduction for this expense may be allowed on the federal return if certain requirements are met.
When Should an Entry Be Made?
An entry should be made when you have investment interest expense that was incurred to produce income exempt from Georgia income tax.
Because Georgia does not tax certain types of income, Georgia may require an adjustment to the itemized deduction claimed on the federal return.
Examples may include investments that generate:
- Tax-exempt income
- Certain exempt interest income
- Other income specifically excluded from Georgia taxation
What Amount Should Be Entered?
Enter only the portion of the investment interest expense that is attributable to producing income exempt from Georgia tax.
Do not enter the entire federal investment interest deduction unless all of it relates to Georgia tax-exempt income.
Important Notes
- Most taxpayers will leave this field blank.
- Only enter an amount if part of your investment interest expense relates to income exempt from Georgia taxation.
- Maintain supporting documentation showing how the adjustment was calculated.
- An incorrect adjustment may affect your Georgia itemized deductions and taxable income.