Update March 22, 2012 – Tax Exemption for Georgia Seniors Capped
The Georgia Senate voted unanimously Thursday for a sweeping tax plan that its supporters said would help the state compete for jobs and help families. The bill now awaits the signature of Gov. Nathan Deal, who helped put the plan together. Here is the key elements of House Bill 386 that will affect the Georgia Income Tax Exemption for Seniors:
Cap nonwork income that seniors can exclude from income taxes at $65,000, or $130,000 per couple.
Below is my orginal article about the state of Georgia Tax Exemption for Seniors. It still applies but now will be cap as per the above limits of 65,000, or $130,000 per couple. This is still quite generous and would cover most people. – Robert Fowler
Currently in Georgia at age 62 citizens may exempt up to $35,000 individually (or $70,000) of retirement income per couple from the state income tax. The state of Georgia income tax rate is 6% of income.Â For a couple exempting the max of $70,000, that would be $4200 in saved on taxes.Â This has been the current law.
Now Georgia Governor Perdue is passing a much broader exception for senior age 65 which will phase in started in 2012. House Bill 1055 (AS PASSED HOUSE AND SENATE (at very end of page) raises the retirement income for persons age 65 during any part of the year in 2012 to $65,000 per person, then in 2013 to $100.000, then in 2014 to $150,000, then in 2015 to $200,000 per person for retirement income exemption. Finally in 2016 all retirement income is exemption from state income tax for a person age 65.
You don’t have to be retired, just have retirement income which is defined as follows:
For the purposes of this paragraph, retirement income shall include but not be limited to interest income, dividend income, net income from rental property, capital gains income, income from royalties, income from pensions and annuities, and no more than $4,000.00 of an individual’s earned income. Earned income in excess of $4,000.00, including but not limited to net business income earned by an individual from any trade or business carried on by such individual, wages, salaries, tips, and other employer compensation, shall not be regarded as retirement income. The receipt of earned income shall not diminish any taxpayer’s eligibility for the retirement income exclusionexclusions allowed by this paragraph except to the extent of the express limitation provided in this subparagraph.
This is a major benefits for the state of Georgia seniors and anyone considering relocating to Georgia. We applauded Governor Perdue and the state of Georgia for passage of this benefit for the seniors of Georgia. This will be a boost over the long terms to the senior communities of GA.