ATLANTA — Military retirement income, up to a certain threshold, will no longer be subject to the state income tax in Georgia, after Gov. Brian Kemp signed a law Monday to put the new policy into effect.
The law, H.B. 1064, was passed earlier this month.
It exempts up to $35,000 of military retirement income. The bill reads:
Up to $17,500.00 of income received by an individual who is less than 62 years of age paid to such individual as retirement benefits from military service in the armed forces of the United States or the reserve components thereof and an additional amount of up to $17,500.00 of such income, provided that he or she has Georgia earned income otherwise included in his or her Georgia taxable net income in an amount that exceeds $17,500.00.
The reason the bill specifies the exemption for people under 62 is that existing Georgia tax law already allows people age 62-64 to exempt $35,000 of retirement income, while those 65 and older can exempt $65,000 of retirement income.
"Yesterday I was proud to sign HB 1064 which creates a state income tax exemption for retired military pay for the first time in GA history. Our heroic veterans made a sacrifice to protect our nation, and this bill rewards their service & strengthens GA's world-class workforce," Gov. Kemp tweeted Tuesday.
The governor signed the bill in a ceremony in Columbus. In remarks there, he said that "when many of us gathered for a roundtable on these issues, one of the best steps we can take in honoring them is to create a career military retirement-income tax exemption."
Up to this point, Georgia was one of a small minority of states that continued to fully tax military retirement income in its state income taxes.
"Until today, we were the only state in the region – and one of only a few in the entire country – that fully taxed our military retirees up to the age of 62, with limited provisions or exemptions," the governor said. "By making this adjustment, we’re incentivizing these highly qualified individuals to continue working in their communities when they start second careers, helping Georgia remain the No. 1 state for business."
The tax exemption, Kemp said, "is the right thing to do."
The law will take effect in July and first apply to the 2022 tax year when people file in 2023.
