Georgia retired pay

Is military retirement taxed in Georgia?

Partly taxed

$17,500 Now, $65,000 Under 65 in 2027.

Partly. For 2025 and 2026, a retiree under 62 excludes $17,500 of military retirement, or $35,000 with more than $17,500 of Georgia earned income; at 62 to 64 the general $35,000 retirement exclusion applies, and at 65 or older it is $65,000. From tax year 2027, HB 266 lets anyone under 65 exclude up to $65,000 of military retirement.

The law: O.C.G.A. § 48-7-27(a)(5.1) (military retirement) and § 48-7-27(a)(5) (retirement income exclusion)
Current rule since: tax year 2022 for the under-62 military exclusion; HB 266 (Act 181 of 2025) replaces it for taxable years beginning on or after January 1, 2027
Where you claim it: Form 500 Schedule 1, Line 7b (you) or 7e (spouse), from the Military Retirement Income Exclusion worksheet on Schedule 1, page 3; at 62 and older, Line 7a or 7d from the Retirement Income Exclusion worksheet on page 2

Read on Georgia’s own sources October 9, 2026

What Georgia’s rule is worth on your retired pay

Enter your annual taxable retired pay (box 2a of your DFAS or Coast Guard 1099-R). The rate starts at Georgia’s flat 4.99% rate for tax year 2026; change it to your own bracket if you know it.

One rate applied to the whole amount, not Georgia’s full return: brackets, other income, deductions and credits change the real figure. Use it to compare, then check the state’s own form instructions.

How it works in Georgia

Under 62, use the Military Retirement Income Exclusion worksheet on page 3 of Form 500 Schedule 1. Line 1 is the taxable military retirement from your 1099-R and Line 2 is the $17,500 base. If your Georgia salary, wages and other earned income total $17,500 or less, stop at Line 3 and carry it to Schedule 1, Line 7b (7e for a spouse). If Georgia earned income is higher, Lines 4 to 8 add a second $17,500, for up to $35,000.

At 62 the military worksheet stops applying; the form marks it for taxpayers under 62. Your retired pay moves into the general Retirement Income Exclusion on Schedule 1, page 2: up to $35,000 at ages 62 to 64 and $65,000 at 65 or older. That limit is shared with your other retirement income, such as pensions, IRA withdrawals, interest, dividends, capital gains and up to $5,000 of earned income. The date of birth is required, and the amount goes on Line 7a (7d for a spouse).

Each spouse qualifies on his or her own. Two military retirees under 62 who both have more than $17,500 of Georgia earned income can each exclude up to $35,000 on one joint return. At 62 and up, income from jointly owned property is split 50% to each spouse for the retirement exclusion.

HB 266, signed May 13, 2025 as Act 181, rewrites § 48-7-27(a)(5.1) for taxable years beginning on or after January 1, 2027: anyone under 65 may exclude up to $65,000 of military retirement, and the earned income test disappears. The same text bars taking the military exclusion and the general retirement exclusion in the same year, so a retiree aged 62 to 64 will pick the larger one. HB 463 (Act 465, signed May 11, 2026) raises the 65-and-older retirement exclusion to $70,000 for 2027 and later.

If you missed the exclusion, file Form 500X with the Schedule 1 worksheet pages, within three years of the later of the return's due date or the date you paid. The 2025 booklet's mailing address for Form 500X is Processing Center, Georgia Department of Revenue, PO Box 740318, Atlanta, GA 30374-0318.

Survivor Benefit Plan annuities

The 2025 IT-511 lists, as its own subtraction (item 27), income a surviving family member receives that is based on the service record of a deceased veteran, without regard to the survivor's age. The booklet does not name SBP or state a dollar limit for that item, and the Department of Revenue's pages do not address SBP separately (read October 9, 2026).

Active-duty pay in Georgia

Georgia taxes a legal resident's military pay wherever earned unless Georgia law exempts it. Guard and reserve pay earned in a combat zone or on orders defending the U.S. border is excluded, and Guard members on active duty over 90 consecutive days get a credit for qualified life insurance premiums.

Missed it in an earlier year?

A claim for refund must be made within three years from the later of the date the tax was paid or the due date of the return, including extensions (2025 IT-511). Amend on Form 500X.

What trips Georgia retirees up

The Department of Veterans Service page says the second $17,500 needs at least $17,500 of earned income. The Department of Revenue's page and the IT-511 say more than $17,500, and the worksheet sends you to Line 3 if Georgia earned income is less than $17,501. Exactly $17,500 of wages does not unlock the extra amount.
The earned income has to be Georgia earned income. Part-year residents and nonresidents may take the base $17,500 against all of their military retirement, but the second $17,500 only after Georgia-source earned income passes the threshold.
The rate is moving too. HB 463 sets Georgia's flat rate at 4.99% for taxable years beginning on or after January 1, 2026, and the Department of Revenue's 2026 Employer's Tax Guide (updated June 2026) applies 4.99% retroactive to January 1, 2026; the 2025 booklet uses 5.19% for 2025. On an assumed $17,500 exclusion, the difference is about $35 a year.

Federal side: DFAS reports retired pay on Form 1099-R, and the IRS taxes it as a pension. VA disability compensation is not taxable income under federal law (IRS Publication 525). The SCRA’s tax-home rule (50 U.S.C. § 4001) protects servicemembers on orders, not retirees, so where a retiree lives decides which state taxes the pension. Compare every state on the 51-state ledger. Georgia’s other servicemember protections are on the Georgia SCRA page.

Frequently asked questions

Does Georgia tax military retirement?

Partly, and it depends on age. For 2025 and 2026, the 2025 IT-511 allows a retiree under 62 to exclude $17,500 of military retirement, plus another $17,500 with more than $17,500 of Georgia earned income. At 62 to 64, military pay falls under the general retirement income exclusion of $35,000, and at 65 or older that exclusion is $65,000, shared with other retirement income. Income above the limit is taxed at the flat 5.19% rate for 2025 and 4.99% for 2026, per Department of Revenue publications read October 9, 2026.

What changes for Georgia military retirees in 2027?

HB 266, signed May 13, 2025 as Act 181, applies to taxable years beginning on or after January 1, 2027. It lets an individual under 65 exclude up to $65,000 of military retirement benefits, with no earned income requirement. It also says no one may take this military exclusion and the general retirement exclusion in the same year. Separately, HB 463, signed May 11, 2026, raises the 65-and-older retirement exclusion to $70,000 from 2027. Both texts were read on legis.ga.gov on October 9, 2026.

Do I need a job to get Georgia's full military retirement exclusion?

For 2025 and 2026, yes, if you are under 62. The base exclusion is $17,500. The second $17,500 requires more than $17,500 of Georgia earned income, such as Georgia wages, according to the Department of Revenue's Retirement Income Exclusion page and the 2025 IT-511 worksheet. A retiree with no Georgia job excludes $17,500. That test ends for taxable years beginning in 2027, when HB 266 allows up to $65,000 under age 65 without any earned income.

Is SBP taxed in Georgia?

The Department of Revenue does not name SBP in its retirement pages. The 2025 IT-511 does list a separate subtraction (item 27) for income received by a surviving family member that is based on the service record of a deceased veteran, without regard to the survivor's age, and gives no dollar limit for it. Because the booklet does not say whether an SBP annuity fits that item, confirm with the Department of Revenue before claiming it (read October 9, 2026).

Sources, read October 9, 2026

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Heads up: SCRA Saver publishes general information, not legal or financial advice. Laws change and every situation differs. Confirm details with your installation legal assistance office (free for service members) or a licensed professional.