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.
You can use the standardized income tax tables provided by the Georgia government to determine how much tax you will owe on your adjusted gross income (as documented on your federal return).
Calculate Georgia State Income tax
To calculate your state income tax, you'll need to look at the current tax rates, which currently vary from 1 to 6 percent. All but low-income people will end up in the 6 percent bracket. The Georgia standard deduction is $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 income 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.
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, 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.
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
- Flow-through entity income, such as LLCs, trusts, partnerships, estates and S-corporations
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.
Out-of-State Resident Exceptions
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.
2018 Taxes and Upcoming Changes
Although the tax rates remain the same for 2018, Georgia officials have approved a reduction in state income tax, effective Jan. 1, 2019. The highest Georgia state tax rate, paid by the majority of residents, will drop from 6 percent to 5.75 percent, further decreasing to 5.50 percent in 2020.
Filing Your 2017 Taxes
If you're filing your 2017 state taxes, you'll likely pay 6 percent in income taxes for the year, unless you fit one of the exceptions.
- Georgia Department of Revenue: Filing Requirements
- Georgia Department of Revenue: Individual Taxes
- Tax Foundation: State Individual Income Tax Rates and Brackets for 2017
- Georgia Department of Revenue: Retirement Income Exclusion
- WTXL: Governor Deal signs bill to reduce GA income tax
- Tax-Brackets.org: Tax Year 2017 Georgia Income Tax Brackets
- If you are new to Georgia and have income from another state, file your tax return with that state for income earned there. File Schedule 2 and include a copy of the other state's return with your Georgia tax return to receive credit.
- Review the Georgia instructions carefully, as some federal adjustments may not be accepted by Georgia. You may need to adjust your federal adjusted gross income with explanation to the Georgia Department of Revenue.
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.