Georgia Retirement Tax Friendliness

Georgia Retirement Taxes

Are you planning for retirement with Georgia on your mind? We don’t blame you. The Peach State has a lot to offer.

Georgia 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.

A financial advisor can help you plan for retirement and other financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Is Georgia tax-friendly for retirees?

Yes, as Georgia 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. If you're age 62 to 64, this deduction drops to $35,000. Meanwhile, the state’s sales tax rate and property tax rate are both relatively moderate, and there are no inheritance or estate taxes to worry about.

Is Social Security taxable in Georgia?

In short, no, Social Security is not taxed in Georgia. When filing income taxes here, you should subtract any Social Security that is included in the adjusted gross income (AGI) 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 ages 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 and salary). 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.

How high are property taxes in Georgia?

The median property tax bill in Georgia is $1,850 per year, well below the national median of $2,869. The median home value in Georgia is $206,700, meaning the median effective property tax rate is 0.89% 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 from the 40% assessed value from property taxes. Seniors ages 65 and older may be eligible for a double homestead exemption. To qualify for the $4,000 exemption, the applicant’s total household income (not including Social Security and pension income) cannot exceed $10,000 for the prior year.

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.

How high are sales taxes in Georgia?

The Georgia statewide sales tax rate is 4%, which ranks in the bottom 11 of all U.S. states. Additionally, localities and counties in Georgia collect their own sales taxes, with rates up to 5%. 

Unlike many other states, Georgia does allow for the taxation of groceries. However, local tax rates do apply to groceries so expect to pay sales taxes of up to 5% 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 tends to be slightly lower than the national average, so in general seniors can expect their everyday costs to be lower than those of the average American.