How to Calculate Taxable Income for Georgia State Income Tax

by Jane Meggitt ; Updated March 21, 2018

Like many states, the starting point for calculating state taxes in Georgia begins with your federal income tax return, and your federal adjusted gross income. Find your federal AGI on line 37 of Form 1040 or line 21 if you filed Form 1040A. Some taxpayers owning out-of-state tax-free municipal bonds may have to adjust their federal AGI to comply with Georgia laws. Once you’ve calculated your Georgia income tax, you’ll indicate the amount on either line 16 of the state’s individual tax return Form 500 or line 4 of the Form 500-EZ.

Tax Rates

For 2017, Georgia’s state income tax rates vary from 1 to 6 percent, although all but low-income people will end up in the 6 percent bracket. The state has a standard deduction of $2,300 for single residents and $3,000 for married couples filing jointly. There is also a personal exemption of $2,700 for a single filer, $7,400 for a married couple and $3,000 for dependents.

The 2 percent tax rate kicks in at just $750 of eligible income for single filers, while 3 percent starts at $2,250; 4 percent at $3,750; 5 percent at $5,250 and income over $7,000 is taxed at 6 percent. For those who are married and filing jointly, the 2 percent rate starts at $1,000; 3 percent at $3,000; 4 percent at $5,000; 5 percent at $7,000 and 6 percent at $10,000.

Filing Requirements

If you are a full-time Georgia resident, you must file state income tax if you meet any of the following standards:

  • You must file a federal income tax return.
  • Your income is greater than the state’s personal exemptions and standard deduction.
  • You have income that is not subject to federal tax but is subject to state tax.

If you are over the age of 62 or totally and permanently disabled, some adjustment is available for your state tax return. If you are married and file jointly and you and your spouse both receive retirement income, you may double your individual exclusion.

Part-year residents must file a state income tax return if they file federal income taxes. See Schedule 3, on page 6 of the Georgia Form 500 Individual Tax Return to determine how much of income is subject to Georgia tax.

Military personnel are not exempt from paying Georgia income tax if they are legal residents of the state. Anyone who does not have to file a state income return may still want to do so in order to receive a state tax refund.

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Non-residents with Georgia Income

If you are a non-resident but work in the state or otherwise receive Georgia-related income, you must file a state income tax return. Georgia-related income, besides wages, includes:

  • Lottery winnings
  • Rents
  • Flow-through entity income, such as LLCs, trusts, partnerships, estates and S-corporations

Out-of-State Resident Exemptions

People who are legal residents of other states are exempt from paying Georgia income taxes if their only activity was performing services in the state as either an employer or employee, and the total compensation for such services was not greater than $5,000.

Georgia State Bonds

Here’s where there’s a calculation difference between your federal and state income taxes. If you own municipal bonds outside the state, you didn’t have to pay federal taxes on the income, but you will owe taxes on the income for any non-Georgia bonds.

About the Author

Jane Meggitt has been a writer for more than 20 years. In addition to reporting for a major newspaper chain, she has been published in "Horse News," "Suburban Classic," "Hoof Beats," "Equine Journal" and other publications. She has a Bachelor of Arts in English from New York University and an Associate of Arts from the American Academy of Dramatics Arts, New York City.

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