Georgia is in a multi-year transition from graduated income tax rates to a flat tax. The rate for 2026 is 5.49%, down from 5.75% in prior years, and scheduled to decline further in annual increments toward 4.99% by 2029 (subject to revenue triggers). Georgia is a relatively taxpayer-friendly state for retirees: Social Security is completely exempt, and taxpayers 62 and older receive a retirement income exclusion of up to $35,000 per person ($70,000 for a married couple). Georgia has no state estate tax and no inheritance tax.
Income tax rate: 5.49% flat (transitioning - was 5.75% in 2023; scheduled to reach 4.99% by 2029 subject to revenue triggers).
Social Security: Fully exempt from Georgia income tax regardless of income level.
Retirement income exclusion (age 62+): Up to $35,000 per person of retirement income (pensions, IRA distributions, annuities) excluded from Georgia income. Married couple: up to $70,000 combined. Under age 62: $4,000 exclusion available.
Standard deduction: $5,400 single, $7,100 MFJ (lower than federal; Georgia has its own deduction system).
Estate tax: None - Georgia repealed its estate tax in 2014.
Inheritance tax: None.
Georgia's HB 1437 enacted in 2022 set the state on a path to a single flat income tax rate. The rate schedule: 5.49% in 2024-2025-2026 (current), declining in 0.1% increments in subsequent years subject to certain revenue thresholds being met. If general fund revenues do not meet specified targets, the rate reduction is paused. The transition eliminates Georgia's prior graduated brackets that topped out at 5.75%. Once complete, the 4.99% flat rate will make Georgia one of the more competitive Southeastern states for income tax purposes, below North Carolina (4.25% target) and South Carolina (6.2%) but above Florida (0%) and Tennessee (0%).
The $35,000 per-person retirement income exclusion is one of Georgia's most valuable tax benefits for retirees. It applies to pension income, IRA distributions, 401(k) distributions, annuity income, interest, dividends, and capital gains - a broader definition than most states' retirement exemptions. A retired couple, both over 62, with $70,000 of combined IRA distributions and pension income pays zero Georgia income tax on those distributions. Any amount above $70,000 is taxed at 5.49%. The exclusion requires the taxpayer to be age 62 or older by the end of the tax year.