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.

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.

Worked example. A couple, both 66, with $40,000 of Social Security and $90,000 of combined pension/IRA income: the Social Security is fully exempt, and the $90,000 is well under their combined $130,000 exclusion. Georgia taxable retirement income: $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.

Confirm the current-year rate with the Georgia Department of Revenue before relying on a specific percentage — it is actively changing. The exclusion mechanics above are the stable, decisive part.

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.

Run your numbers with us