Is Retirement Income Taxed in Georgia? What Retirees Should Know
Is retirement income taxed in Georgia? Yes, some of it, but far less than most people expect. Georgia does not tax Social Security at all, and most residents age 62 or older can exclude a large amount of other retirement income, up to $65,000 per person at age 65 and older. Whatever is left is taxed at Georgia's flat 4.99% rate for 2026.
When I meet with retirees and pre-retirees around Norcross and Gwinnett County, this is one of the first questions on the table. Below I'll walk through how Georgia retirement income tax works in plain English, with the numbers checked against the Georgia Department of Revenue.
Key takeaways
- Social Security is not taxed by Georgia. Taxable Social Security and Railroad Retirement on your federal return are subtracted on your Georgia return.
- Ages 62 to 64 (or totally and permanently disabled): exclude up to $35,000 of retirement income per person.
- Age 65 and older: exclude up to $65,000 per person. Married couples can each claim their own exclusion.
- Georgia's income tax rate for 2026 is a flat 4.99%, down from 5.19% in 2025.
- Federal income tax still applies. Georgia's rules only change your state bill.
Is retirement income taxed in Georgia? The big picture
Georgia starts with your federal adjusted gross income. Then it lets you subtract certain items before applying the state tax rate. For retirees, the two biggest subtractions are:
- The Social Security subtraction, which removes all taxable Social Security from your Georgia income.
- The retirement income exclusion, which removes a set dollar amount of other retirement income if you qualify by age or disability.
After that, Georgia applies its standard deduction and the flat tax rate. There are no brackets anymore, so every taxable dollar is taxed at the same rate.
Is Social Security taxed in Georgia?
No. The Georgia Department of Revenue says taxable Social Security and Railroad Retirement on your federal return are exempt from Georgia income tax. This applies at any age. You may still owe federal tax on part of your benefits, depending on your total income, but Georgia will not tax them.
The Georgia retirement income exclusion
This is the part that saves Georgia retirees the most money. According to the Department of Revenue's instructions, the exclusion works like this:
| Your age (or status) | Maximum exclusion per person |
|---|---|
| 62 to 64, or totally and permanently disabled | Up to $35,000 |
| 65 or older | Up to $65,000 |
What counts as "retirement income"?
Georgia defines it broadly. It includes pensions, annuities, taxable IRA distributions, interest, dividends, capital gains, net rental income and royalties. Up to $5,000 of the exclusion can come from earned income, such as wages from a part-time job. Lottery and gambling winnings do not count.
Married couples: each spouse qualifies separately
A married couple where both spouses are 65 or older can exclude up to $65,000 each, or $130,000 combined. But each spouse must qualify on their own, and each spouse's exclusion applies to that spouse's own income. If your IRA and pension are all in one name, the other spouse's exclusion may go partly unused. This is worth reviewing with your tax preparer.
Military retirees
Georgia also has a separate military retirement exclusion for retirees under 62. The Department of Revenue's 2025 instructions list up to $17,500, plus up to another $17,500 if you have more than $17,500 of Georgia earned income. Check the current IT-511 booklet for the exact rules in the year you file.
Georgia's 2026 tax rate and standard deduction
Governor Kemp signed House Bill 463 in May 2026. It lowered Georgia's flat income tax rate from 5.19% to 4.99% starting with tax year 2026. The Department of Revenue also reports higher standard deductions for 2026: $15,000 for single filers and $30,000 for married couples filing jointly. The dependent deduction rose to $5,000.
The Governor's office also says the new law raises the retirement income exclusion to $70,000 beginning in 2027. For 2026 returns, plan on the $35,000 and $65,000 amounts above. Future rate cuts in the law depend on the state hitting revenue targets, so don't count on them yet.
A simple example
Here is a made-up example to show the math. It is simplified and is not tax advice.
Say a single Georgia retiree, age 67, has $24,000 of Social Security and $100,000 from a pension and IRA withdrawals.
- Social Security: subtracted in full on the Georgia return.
- Pension and IRA income: $100,000 minus the $65,000 exclusion leaves $35,000.
- Minus the $15,000 standard deduction leaves about $20,000 of Georgia taxable income.
- At 4.99%, that is roughly $998 of Georgia income tax.
The same person would likely owe much more in federal income tax. That is why, for many Georgia retirees, the bigger planning question is federal tax, not state tax.
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What this means for your retirement income plan
Because Georgia is fairly friendly to retirees, the planning focus shifts to a few practical questions:
- Timing. Retiring at 62 versus 65 changes your exclusion from $35,000 to $65,000 per person. If you have flexibility, the timing of big IRA withdrawals can matter.
- Whose name the money is in. Since each spouse's exclusion covers their own income, balance between spouses can affect your Georgia bill.
- Federal tax is the bigger lever. Traditional 401(k) and IRA withdrawals are taxable federally. Money in a Roth IRA, or loans from a properly structured life insurance policy, may generally be accessed without federal income tax if the rules are followed.
- Steady income. Some retirees use an annuity to turn part of their savings into predictable income. Annuity income counts as retirement income for the Georgia exclusion. Learn how they work in Fixed Indexed Annuities Explained.
If you are still working and wondering about tax-free options down the road, my post on IUL vs. 401(k) for Georgia families lays out the trade-offs, including the costs and risks.
One more honest note: I am a licensed life insurance agent, not a CPA or tax advisor. I can show you how different income sources fit together, but your tax preparer should confirm how the rules apply to your return.
Frequently asked questions
Does Georgia tax my 401(k) or IRA withdrawals?
They count as retirement income. If you are 62 or older (or totally and permanently disabled), you can exclude up to $35,000 per person, or up to $65,000 per person at 65 and older. Amounts above the exclusion are taxed at 4.99% for 2026.
Is Social Security taxed in Georgia?
No. Georgia exempts taxable Social Security and Railroad Retirement benefits from state income tax.
Can both spouses claim the Georgia retirement exclusion?
Yes, but each spouse must qualify separately, and each exclusion applies to that spouse's own retirement income.
What is the Georgia income tax rate for 2026?
A flat 4.99%, under House Bill 463, down from 5.19% in 2025.
Want to see how Social Security, savings and Georgia's exclusion fit together for your household? I'm happy to walk through it with you, no pressure.
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Tai Nguyen is a licensed life insurance agent in Georgia (License #3784707, NPN 21496686). This article is for educational purposes only and is not tax, legal, or investment advice. Consult a qualified tax professional about your situation. Insurance and annuity guarantees are backed by the claims-paying ability of the issuing insurance company. Annuities and life insurance are not FDIC insured. Retire With Tai serves Georgia residents only.
