Georgia Tax Exemption for Military Retired Pay

Here’s how Georgia taxes military retired pay for state income tax purposes:In Georgia, military retirement pay can receive a partial state income tax exclusion, but it is not completely exempt by default like in some other states. The current law allows Georgia residents to exclude up to certain amounts of military retired pay from their Georgia taxable income depending on age and other income:

• Under age 62: You can exclude up to $17,500 of military retirement income. An additional $17,500 exclusion may be available if you also have at least $17,500 in earned income, effectively letting you exclude up to $35,000 in some cases.
• Ages 62 to 64: You may exclude up to $35,000 of military retirement income.
• Age 65 and older: You may exclude up to $65,000 of military retirement income.
  These amounts are per taxpayer, so married couples filing jointly may each qualify for the exclusions separately if they each meet the requirements.

Importantly, a legislative change set to take effect in future tax years (e.g., beginning in tax year 2026 or later) aims to expand the exclusion so that retirees of any age may fully exempt up to $65,000 of military retired pay from Georgia taxable income, making the benefit more uniform across age groups. In practice, Georgia treats military retirement pay as income subject to state tax, but these exclusions reduce the amount included in taxable income on your Georgia state tax return.