Georgia state income tax applies to individuals who earn ordinary income. Ordinary income includes money earned from your job, investments, and savings accounts, as well as dividends, interest, and royalties. It excludes long-term capital gains, which are typically taxed at a lower rate. Most Georgia residents need to file a return if they have Georgia-source income. This income includes wages, tips, business income and interest. In addition, certain military personnel stationed in Georgia may be required to file a Georgia return.
Nonresidents and part-year residents must also file a Georgia return if they are required to file a federal income tax return. However, filing a Georgia return does not relieve them of their requirement to pay state taxes. Georgia’s income tax is progressive, meaning the rate of taxation increases with taxable income. The state also has special tax rules for corporations that require them to pay a net worth tax. The tax laws in this state are complicated and should be reviewed with a professional.
How to Pay Georgia State Income Tax?
If you’re a Georgia resident, you have several ways to pay your state income tax. You can mail a payment voucher (Form 525-TV) with a check or money order or use Direct Debit to pay your taxes from your bank account. You can also make payments online using the Georgia Department of Revenue website.
If you owe Georgia state taxes, you can request a state payment plan if you can’t pay your debt in full. This will stop any liens placed against you by the Georgia Department of Revenue and allow you to pay your tax debt over time.
Georgia State Income Tax Exemptions
There are a number of state and local tax exemptions, including a standard deduction, itemized deductions, and a low-income credit. In addition, a portion of Social Security benefits is exempt from Georgia taxes.
A new law allows pass-through entities to elect to pay state income tax at the entity level beginning in 2022, reducing their individual income tax liability. This election is available to all eligible entities, including S corporations and most partnerships.
The state of Georgia does not impose a gift tax, but the federal government imposes a limit on the amount of gifts individuals can make each year. In addition, a homestead exemption is available to homeowners who use their property as a primary residence.