Georgia does tax retirement pensions, but most retirees pay little or nothing on that income because the state offers a large age-based exclusion. If you’re 65 or older, you can exclude up to $65,000 of retirement income per person; between 62 and 64, or permanently disabled under 62, the cap is $35,000 per person. Social Security is fully exempt on top of that. A married couple both 65 or older can shield up to $130,000 of pension and other retirement income from Georgia tax.
Georgia’s Tax Rate on Pension Income
Georgia now uses a single flat income tax rate, which stood at 5.19% for 2025.1Department of Revenue. Important Tax Updates The rate is scheduled to keep declining in future years.2Georgia House of Representatives. Summary of Georgia State Income Tax Changes From 2018 Through 2030
Your Georgia return starts from your federal adjusted gross income, so any pension payment, 401(k) withdrawal, IRA distribution, or annuity payout you report federally flows onto your Georgia return automatically. The retirement income exclusion is then subtracted before the flat rate applies. Whatever falls under the exclusion cap is taxed at zero.
How Much Retirement Income You Can Exclude
The exclusion depends on your age as of December 31 of the tax year:3Department of Revenue. Retirement Income Exclusion
- Age 62 through 64: up to $35,000 per person
- Age 65 and older: up to $65,000 per person
- Under 62 and permanently disabled: up to $35,000 per person
These caps are per person, not per household. Each spouse on a joint return qualifies on their own age, and each spouse can only apply the exclusion to retirement income attributable to them individually. One spouse can’t use the other’s pension to fill their own exclusion.4Legal Information Institute (LII). Georgia Comp. R. and Regs. R. 560-7-4-.02 – Procedures Governing Retirement Income Exclusion Income from jointly owned property is split 50/50 between spouses for exclusion purposes.
The exclusion is a cap, not a fixed deduction. A 66-year-old who receives $50,000 from a pension excludes the entire $50,000, because it falls under the $65,000 limit. Only amounts above your cap get added back into taxable income.
What Counts as Qualifying Retirement Income
Georgia defines qualifying income broadly. It covers more than just pension checks:3Department of Revenue. Retirement Income Exclusion
- Pension and annuity payments, both private and government
- Traditional IRA, 401(k), and 403(b) distributions
- Interest and dividend income
- Capital gains
- Net rental income and royalties
- Up to $5,000 of earned income from wages or self-employment
Because investment income counts, a retiree without a traditional pension can still fill the exclusion with IRA withdrawals, dividends, and capital gains. Someone 65 or older drawing $30,000 from an IRA, $15,000 in dividends, and $10,000 in capital gains shelters the full $55,000. The $5,000 earned-income allowance means a small amount of part-time work doesn’t automatically create Georgia tax.
Social Security Is Fully Exempt
Social Security benefits and Railroad Retirement income are completely exempt from Georgia income tax. There’s no cap and no age requirement. The taxable portion that appears on your federal return gets subtracted on Schedule 1 of Georgia Form 500.5Department of Revenue. Retirees – FAQ
This exemption is separate from the retirement income exclusion, so Social Security doesn’t eat into your $35,000 or $65,000 cap. A 67-year-old receiving $25,000 in Social Security and $60,000 from a pension pays zero Georgia tax on both: the Social Security is exempt outright, and the pension fits under the $65,000 exclusion.
Military Retirement Pay
Military retirees under 62 get a separate exclusion. Historically, veterans younger than 62 could exclude up to $17,500 of military retirement pay, with an additional $17,500 available if the veteran also had at least $17,500 in earned income, for a combined maximum of $35,000.6Georgia General Assembly. Fiscal Note for Senate Bill 31 (LC 50 1003) At 62 and 65, military retirees move onto the standard $35,000 and $65,000 exclusions.
Senate Bill 31, introduced in the 2025-2026 session, would exempt all military retirement benefits from Georgia income tax regardless of the retiree’s age, effective for tax years beginning on or after January 1, 2026.6Georgia General Assembly. Fiscal Note for Senate Bill 31 (LC 50 1003) Confirm the final status of that bill with the Georgia Department of Revenue before filing.
Military disability retirement pay excluded from federal gross income never appears on your Georgia return, because Georgia starts from federal AGI.
Roth Distributions
Qualified Roth IRA and Roth 401(k) distributions aren’t included in federal AGI, so they never reach your Georgia return and aren’t taxed by the state. They also don’t count against your exclusion cap, which leaves the full exclusion available for other income.
If You Move To or From Georgia
Federal law bars any state from taxing pension income you earned while working there once you’ve moved away.7Office of the Law Revision Counsel. 4 USC 114 – Limitation on State Income Taxation of Certain Pension Income If you retired from a New York job and moved to Georgia, only Georgia can tax the pension, and the exclusion applies. If you earned a pension in Georgia and retire to Florida, Georgia can’t tax those distributions once you’ve left.
Move mid-year, and Georgia taxes you as a part-year resident on income received while you lived in the state. The retirement income exclusion is prorated for part-year residents.
Claiming the Exclusion on Your Return
The exclusion isn’t automatic. You claim it on Georgia Form 500 using Schedule 1, which walks through your age, your qualifying income sources, and the exclusion calculation. The result carries to Form 500 as a subtraction from federal AGI.8Department of Revenue. 500 Individual Income Tax Return The Department of Revenue publishes the Form IT-511 instruction booklet each year with current worksheets; use the version matching your tax year.
Watch your withholding. Pension administrators often withhold Georgia tax without accounting for the exclusion, so your withholding can be higher than your actual liability. If you have retirement income without withholding, such as rental income, brokerage capital gains, or interest, Georgia expects quarterly estimated payments.9Georgia.gov. Pay Estimated Tax Underpaying through the year can trigger a penalty. Retirees living mostly on investment income and IRA withdrawals should check the numbers each quarter or work with a tax professional.