Georgia is in a multi-year transition from graduated income tax rates to a flat tax. The rate for 2026 is 4.99%, down from 5.19% for 2025 and 5.75% for 2023, and scheduled to decline by 0.125% a year beginning in 2027 until it reaches 3.99% (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 at ages 62-64 and $65,000 per person at 65 and older (each spouse qualifies separately). Georgia has no state estate tax and no inheritance tax.
Income tax rate: 4.99% flat for 2026 (was 5.75% in 2023, 5.39% in 2024, 5.19% in 2025; scheduled to fall 0.125% a year from 2027 to a 3.99% floor, 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. Age 65 and older: up to $65,000 per person for 2026 ($70,000 in 2027). Each spouse qualifies separately. Under age 62: $35,000 only if permanently disabled.
Standard deduction: $15,000 single, head of household, or married filing separately and $30,000 MFJ for 2026 ($12,000 and $24,000 for 2025); 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Estate tax: None - Georgia repealed its estate tax in 2014.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 has since been accelerated: 5.39% for 2024, 5.19% for 2025, and 4.99% for 2026, then declining by 0.125% a year beginning in 2027 to a 3.99% floor, 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 the scheduled reductions are complete, the 3.99% floor rate would make Georgia one of the more competitive Southeastern states for income tax purposes, though still 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 aged 62 to 64, 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 4.99% for 2026 (spouses 65 or older can each exclude up to $65,000). The exclusion requires the taxpayer to be age 62 or older by the end of the tax year.