Georgia for retirees: Social Security untaxed, $65,000 a person excluded at 65

Georgia is a retirement state with an age test and a cap. Social Security and Railroad Retirement come off Form 500 in full, whatever your age and whatever your income, on Schedule 1, line 8. Everything else a retiree lives on, pensions, annuities, IRA and 401(k) withdrawals, interest, dividends, capital gains, net rent, royalties and up to $5,000 of wages, is “retirement income,” and the retirement income exclusion on Schedule 1, line 7, takes it off up to $35,000 per person from age 62 to 64 and $65,000 per person from 65. The exclusion is figured for each spouse on that spouse’s own income, so a couple both 65 can shelter $130,000 a year on top of their Social Security. Below 62 there is no break at all, other than $17,500 of military retirement. Above the cap, the excess is taxed at the flat 4.99%, after the $15,000 or $30,000 standard deduction. For most retired couples in Georgia, the result is a state tax of zero.

Two things about the design matter more than the dollar figures. The exclusion is per person, not per return, and it belongs to the person whose income it is. A husband with a $90,000 pension and a wife with none cannot pool their $130,000; he excludes $65,000 and pays 4.99% on the other $25,000, and her $65,000 goes unused. Jointly owned income, a joint brokerage account for instance, is split evenly between them. And the exclusion is for income that arrives in a given year, so timing is everything: an IRA withdrawal or a capital gain taken at 61 is fully taxed, the same dollars at 62 are excluded.

What goes into the exclusion

The worksheet is in the IT-511 booklet. A permanently and totally disabled person qualifies for the $35,000 exclusion at any age. Part-year residents and nonresidents prorate, earned and unearned portions separately.

The $5,000 earned income piece is small on purpose. Georgia’s exclusion is meant for people who have stopped working, so a 66-year-old still earning $60,000 excludes $5,000 of it, at most, and pays 4.99% on the rest after the standard deduction. A 66-year-old with a $60,000 pension excludes all of it. Same dollars, different label, $2,744 of difference in Georgia tax.

Roth conversions: an age decision

A Roth conversion is a distribution from a traditional IRA deposited in a Roth. Federally it is taxable in the year of the conversion, reported on line 4b of the 1040. For Georgia it is retirement income like any other IRA distribution, which means the state cost depends on your age and on how much of your exclusion is already spoken for. Before 62, the whole conversion is taxed at 4.99%: $60,000 converted costs $2,994 in Georgia tax. At 62 to 64, up to $35,000 of it fits inside the exclusion; at 65, up to $65,000, less whatever pension, IRA, interest and dividend income is already filling the cap. A couple both 65 with modest pensions can often convert tens of thousands of dollars a year and owe Georgia nothing on it.

That makes the Georgia conversion plan simple to state. Size each year’s conversion to the exclusion each spouse has left, plus the unused part of the standard deduction. The federal side still has teeth: a conversion raises AGI, which can make more Social Security taxable federally, raise Medicare premiums two years later through IRMAA, and push you past the phase-out of the $6,000 federal senior deduction. None of those federal effects changes the Georgia tax, because Georgia subtracts Social Security in full and never saw the senior deduction in the first place.

The federal senior deduction, and why it does nothing here

The $6,000 federal deduction for people 65 and older, in effect for 2025 through 2028, comes off after adjusted gross income, outside Schedule A. Georgia starts from AGI, so the deduction never reaches Form 500, and HB 1199, the 2026 conformity act, added no Georgia version. The same is true of the extra federal standard deduction for age: the Georgia standard deduction is $15,000 or $30,000 at every age, with no addition for 65 or blindness. What Georgia gives for age is the exclusion itself, and at $65,000 a person it is worth up to $3,244 of tax, far more than any deduction would be.

Pensions from somewhere else, and the widow’s penalty

Federal law bars a state from taxing the retirement income of someone who no longer lives there, so a pension earned in New York and paid to a new Georgia resident is Georgia’s to tax, and the Department of Revenue says plainly that it does: an out-of-state pension received after moving to Georgia is taxable here, inside the exclusion. The reverse holds too. A Georgia pension paid to someone who has moved to Florida is not taxed by Georgia. Government pensions, Georgia’s own included, get no special treatment beyond the general exclusion; a retired state teacher and a retired Delta pilot are treated the same.

The per-person design has a hard edge when one spouse dies. A couple both 65 shelter $130,000 and take a $30,000 standard deduction. The survivor shelters $65,000 and takes $15,000. Social Security stays untaxed throughout, but a widow collecting a survivor pension plus the inherited IRA can go from owing Georgia nothing to paying 4.99% on everything over $80,000 in a single year. A survivor under 62 who inherits an IRA has no exclusion at all; the distributions are fully taxed until age 62, whatever the decedent’s age was. Planning the inherited IRA’s ten-year drawdown around the survivor’s 62nd and 65th birthdays is a Georgia-specific move worth making.

Property tax relief: at the county, by April 1

Nothing on Form 500 reduces a property tax bill. Georgia’s help for senior homeowners is the homestead exemption, applied for at the county tax commissioner or assessor by April 1 of the tax year, or within the 45-day appeal window after the assessment notice. You must own and live in the home on January 1. Once granted, most exemptions renew on their own.

The state exemptions are small and their income tests are from another era; a $10,000 test that ignores retirement income is still passed by many retirees, but $4,000 of assessed value is worth perhaps $150 of tax. The local senior school-tax exemptions in Cobb, Fulton, DeKalb, Gwinnett and other counties are where the real money is, often thousands of dollars a year, and each has its own age, income and application rules (verify).

The live issue is the cap. HB 581, approved by voters in November 2024, froze homestead assessed values at a 2024 base growing only with inflation, but let cities, counties and school boards opt out, and roughly a third did (verify). SB 33, signed May 11, 2026, ends the opt-outs and makes the cap mandatory from the 2027 tax year, and lets a county adopt a 1% homestead sales tax by referendum to make up the difference. Selling the house ends the cap; the buyer starts a new base year. A retiree who downsizes within Georgia gives up a frozen assessment for a fresh one at the new home’s price.

Withholding and estimated payments

Most pension payers and IRA custodians will withhold Georgia tax if you ask, and for a retiree whose income fits inside the exclusion there is no reason to ask. The people who need to watch are retirees under 62, anyone whose pension and IRA income runs well past $65,000, and anyone with a large taxable brokerage account or a one-time gain from selling property. Georgia requires estimated payments when you expect more than $1,000 of income not covered by withholding, after deductions, and the safe harbor is 70% of this year’s tax or 100% of last year’s. The penalty is 9% a year, figured on Form 500 UET.