Georgia Retirement Income Tax: Why Most Savannah Retirees Owe $0
Georgia is not a no-income-tax state like Florida or Tennessee — but for most retirees, it functions like one. Two rules do almost all the work: a large retirement-income exclusion and a full Social Security exemption.
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Talk to a Specialist →The retirement income exclusion
Georgia lets each qualifying taxpayer subtract retirement income from state tax, by age:
| Age | Exclusion per person | Married couple, both qualify |
|---|---|---|
| 62–64 (or permanently disabled) | Up to $35,000 | Up to $70,000 |
| 65 and older | Up to $65,000 | Up to $130,000 |
Each spouse qualifies separately, so a couple both 65+ can shelter up to $130,000 of retirement income a year. Eligible income is broad: pensions, annuities, IRA and 401(k)/403(b) withdrawals, interest, dividends, capital gains, and net rental income. Up to $4,000 of earned income (wages) can also count toward the exclusion.
Social Security is fully exempt — on top of that
Any Social Security income taxed on your federal return is subtracted entirely from Georgia income. It does not consume any part of the $35,000/$65,000 exclusion. So a typical retired couple drawing Social Security plus under ~$130,000 of other retirement income often has a Georgia state income tax bill of $0.
The flat rate — and why it barely matters for you
Georgia moved to a flat income tax and has been cutting it on a phased schedule: 5.49% in 2024, 5.39% in 2025, with legislation accelerating it toward 4.99% (competing 2026 bills could move the exact current-year figure). For a working household the rate matters. For a retiree whose income falls under the exclusion, the rate applies to little or nothing — so the headline cut is mostly noise for your situation.
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The other Georgia advantages
- No local income tax anywhere in Georgia — no city or county add-on.
- No estate or inheritance tax.
- Low property tax by national standards — roughly a 0.79% effective rate statewide, though your actual bill is local. See the Bryan and Chatham guides.
Where the savings can disappear
The income-tax win is real, but coastal Georgia claws some of it back through insurance. Savannah homeowners pay well above the state average, and flood coverage is a separate, sometimes large, line item. Read the coastal insurance guide before you treat Georgia as “cheap,” and run the all-in number in the total cost comparison.
Sources: Georgia Department of Revenue (Retirees FAQ; Retirement Income Exclusion). Rate trajectory per Georgia DOR and 2025–2026 legislation (HB 111 / related bills). Figures change — verify the current year with the GA DOR. This is general information, not tax advice; confirm your situation with a qualified tax professional.
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