Bottom Line
Middle-Class Families: Not Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)
Georgia's "tax-friendliness" often depends on where you are in life – at least when it comes to income taxes. Most middle-class families find themselves paying the state's top marginal income tax rate of 5.75%, which kicks in at just $10,000 of taxable income for married couples filing jointly or $7,000 for individual filers (the state is going to a flat tax in 2024). On the other hand, retirees find the state more agreeable, thanks to generous tax breaks for retirement income.
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The Peach State's sales tax rates lean high (the average combined state and local sales tax rate is 7.37%), and in some areas, groceries are taxed as well.
Property taxes are middle-of-the-road, though. Plus, there are no estate or inheritance taxes to worry about.
Georgia Income Taxes
Georgia Income Tax Range
Low: 1% (on the first $1,000 of taxable net income for married couples filing jointly; on the first $750 for individual filers; and on the first $500 for married couples filing separately)
High: 5.75% (on taxable income over $10,000 for married couples filing jointly; on taxable income over $7,000 for individual filers; and on taxable income over $5,000 for married couples filing separately)
Beginning in 2024, the state is switching to a flat rate of 5.49%. From 2025 to 2029, the rate will gradually be reduced to 4.99% if certain economic targets are met. If the economic targets are not met, the rate reduction schedule will be delayed.
Georgia Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Georgia Tax Breaks for Other Retirement Income
Taxpayers 65 and older can exclude up to $65,000 of retirement income (up to $35,000 for taxpayers age 62 to 64). Eligible retirement income includes taxable pensions and annuities (including military pensions), taxable IRA distributions, interest, dividends, net income from rental property, capital gains, royalties, and the first $4,000 ($5,000 beginning in 2024) of earned income (such as wages).
Beginning July 1, 2022, up to $35,000 of military retirement pay is exempt for veterans under 62 years of age.
Retired teachers can deduct contributions made between July 1, 1987, and December 31, 1989, to Georgia’s teacher retirement system that were taxed by the state.
Railroad Retirement benefits are also exempt.
Georgia Sales Tax
4% state levy. Localities can add as much as 5%, and the average combined rate is 7.37%, according to the Tax Foundation.
- Groceries: Exempt from state tax, but local taxes may apply
- Clothing: Taxable
- Motor Vehicles: Exempt from state tax, but local taxes may apply
- Prescription Drugs: Exempt
Georgia Real Property Taxes
In Georgia, the median property tax rate is $812 per $100,000 of assessed home value.
Georgia Property Tax Breaks for Retirees
For homeowners 62 and older who earn $10,000 or less, up to $10,000 of their property's assessed value is exempt from school taxes.
People 62 or older whose family income does not exceed $30,000 may qualify for an exemption from state and county property taxes equal to the amount by which the assessed value of the home exceeds the assessed value for the preceding tax year (in effect, freezing their assessed value).
For those 65 and older who earn $10,000 or less, the homestead exemption is doubled, to $4,000. Many counties offer homestead exemptions that may be more beneficial to the taxpayer than the exemptions offered by the state.
Georgia Motor Fuel Taxes
Gasoline: 37.55¢ per gallon (39.65¢ per gallon effective January 1, 2023).
Diesel: 41.39¢ per gallon (43.79¢ per gallon effective January 1, 2023).
Georgia Sin Taxes
Cigarettes: $0.37 a pack
Cigars: 23% of the wholesale price
Other tobacco products: 10% of the wholesale price
Vapor products: $0.05 per ml for closed systems; 7% of wholesale price for open systems and disposables
Beer: $1.01 per gallon (includes mandatory $0.53 per gallon local tax)
Wine: $1.51 per gallon
Liquor: $3.79 per gallon (local taxes may also be due)
Georgia Estate and Inheritance Taxes
No estate or inheritance tax.
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