🎉 MAJOR TAX REFORM FOR 2025!
Georgia eliminated its complex 6-bracket progressive tax system!
- OLD SYSTEM (2024): 6 brackets ranging from 1% to 5.75% - complicated calculations
- NEW SYSTEM (2025): Simple flat 5.19% - everyone pays the same rate
- FUTURE (2027): Rate drops to 4.99% - even more affordable
- Why? Georgia wants to compete with Florida, Tennessee, and Texas for residents and businesses
This is one of the biggest state tax reforms in the U.S. for 2025!
Calculate Your Georgia State Tax
Georgia's Historic Tax Reform for 2025
In one of the most significant state tax changes in recent history, Georgia passed House Bill 111, which completely transformed the state's income tax system starting January 1, 2025.
What Changed?
| Feature | OLD System (2024) | NEW System (2025) |
|---|---|---|
| Tax Structure | 6-bracket progressive | Flat 5.19% |
| Tax Rates | 1%, 2%, 3%, 4%, 5%, 5.75% | 5.19% for everyone |
| Complexity | High (bracket calculations) | Simple (multiply by 5.19%) |
| Future Changes | N/A | Drops to 4.99% by 2027 |
2025 Georgia Tax System
Simple Formula:
- Start with your gross income
- Subtract standard deduction ($12,000 single / $24,000 married)
- Subtract $4,000 per dependent
- Multiply by 5.19%
- That's your Georgia tax!
Real Example: $75,000 Income
Single Filer, No Dependents:
- Gross Income: $75,000
- Standard Deduction: -$12,000
- Taxable Income: $63,000
- Tax: $63,000 × 5.19% = $3,270
- Effective Rate: 4.36%
Married Filing Jointly, 2 Kids:
- Gross Income: $75,000
- Standard Deduction: -$24,000
- Dependent Exemptions: -$8,000 (2 × $4,000)
- Taxable Income: $43,000
- Tax: $43,000 × 5.19% = $2,232
- Effective Rate: 2.98%
What changed from 2024? Under the old system, this taxpayer would have paid across 6 different brackets. Now it's one simple calculation!
How Georgia Compares to Other States
| State | Tax System | Tax on $75k (single) | vs Georgia |
|---|---|---|---|
| Georgia | 5.19% flat | $3,270 | — |
| Florida | No income tax | $0 | FL saves $3,270 |
| Tennessee | No income tax | $0 | TN saves $3,270 |
| Louisiana | 3.0% flat | $1,890 | LA saves $1,380 |
| North Carolina | 4.25% flat | $2,678 | GA pays $592 more |
| South Carolina | Progressive (up to 6.2%) | ~$3,850 | GA saves $580 |
| Alabama | Progressive (up to 5%) | ~$3,000 | GA pays $270 more |
Georgia Retirement Income Exclusions
Georgia is one of the most retirement-friendly states in the country. Here's why:
Retirement Income Exclusions (2025):
- Age 65+: Exclude up to $65,000 per person ($130,000 for married couples) of retirement income
- Age 62-64: Exclude up to $35,000 per person ($70,000 for married couples) of retirement income
- Social Security: 100% tax-free (no limit)
Retirement Example: Age 67, Married
Let's say you're 67, married, and have:
- Social Security: $40,000 (tax-free)
- 401k/IRA withdrawals: $100,000
- Total income: $140,000
Georgia Tax Calculation:
- Social Security: $40,000 (excluded)
- Retirement income: $100,000
- Retirement exclusion: -$130,000 (full amount excluded!)
- Taxable income: $0
- Georgia tax: $0
In this example, you'd pay ZERO Georgia state income tax despite having $140,000 in income!
Best Places to Live in Georgia (By Income Level)
For Income $30,000 - $50,000
Recommended Cities: Warner Robins, Macon, Augusta, Columbus
Why: Low cost of living, affordable housing ($700-$1,000/month for 2BR), no local income tax
Tax Impact: Effective state rate 3-4% after deductions
Best For: Young professionals, military families (Warner Robins near Robins AFB), starting out
For Income $50,000 - $80,000
Recommended Areas: Atlanta suburbs (Marietta, Roswell, Decatur), Athens, Savannah
Why: Great balance of amenities, culture, and taxes. No city income tax to worry about.
Tax Impact: Effective state rate 4.0-4.5%
Best For: Families, professionals, anyone wanting urban access with lower suburban costs
For Income $80,000 - $150,000
Recommended Areas: Johns Creek, Alpharetta, Sandy Springs, Brookhaven, Dunwoody
Why: Excellent schools, safe neighborhoods, close to Atlanta jobs, strong tech sector
Tax Impact: Effective state rate 4.5-5.0%
Best For: Tech professionals, families prioritizing top schools
For Income $150,000+
Recommended Areas: Buckhead, Johns Creek, Milton, Peachtree City
Why: Premium neighborhoods, top-rated schools, luxury amenities, near Atlanta business district
Tax Impact: Effective state rate ~5.1% (full rate)
Best For: High-income professionals, executives
When Moving to Georgia Makes Sense
- You're moving from a higher-tax state (CA, NY, NJ, IL, MA, OR, MN)
- You're retiring with income under $65k (single) or $130k (married) - you'll pay 0% state tax!
- You work in tech (Atlanta is a growing tech hub with lower taxes than SF/NYC)
- You value simplicity (flat tax = easy calculations)
- You want Southern lifestyle with competitive taxes (better than SC, AL, MS)
- You work remotely for a high-tax state company
- You're moving from a no-tax state (FL, TN, TX, WA, NV) - you'll pay 5.19% more
- You're moving from a lower-tax state (LA 3%, NC 4.25%)
- You're under 62 with significant retirement income (no exclusions apply)
- You're already in a Southern state with lower/no tax
- You prioritize lowest possible taxes above all else (FL/TN/TX are better)
Affordable Tax Filing Resources for Georgia
Georgia's new flat tax is so simple that you can easily file yourself with free or budget software:
Best Free & Budget Options
-
Cash App Taxes - FREE for federal and Georgia state
Completely free, no hidden fees. Perfect for Georgia's simple flat tax. Handles standard deductions, dependent exemptions, retirement exclusions. Works great for W-2 employees and simple situations.
-
FreeTaxUSA - $0 federal, $14.99 Georgia state
Clean interface, excellent for Georgia's simple flat tax system. Handles retirement exclusions automatically.
-
IRS Free File - FREE (income under $79,000)
If your income is under $79,000, you qualify for completely free federal and state filing through IRS Free File Alliance partners.
-
VITA (Volunteer Income Tax Assistance) - FREE (income under $64,000)
IRS-certified volunteers provide free in-person tax preparation. Find locations at IRS Free Tax Prep.
-
Local Enrolled Agent (EA) - $150-$400
For complex situations (retirement exclusions, multiple states, business income), hire a local Enrolled Agent. Search "Enrolled Agent Atlanta" or your city.
Why Georgia Made This Change
Georgia's tax reform wasn't random. Here's the strategic thinking:
Competition from Neighbors:
- Florida (0% tax) has been stealing Georgia residents for decades
- Tennessee (0% tax) eliminated its income tax in 2021
- North Carolina (4.25% flat) has been winning business relocations
Business Attraction:
- Simple flat tax makes Georgia more attractive to businesses
- Easier for companies to calculate employee compensation
- Signals "business-friendly" policy environment
Tax Code Simplification:
- Old 6-bracket system was complex and costly to administer
- Flat tax reduces compliance costs for taxpayers and the state
- Fewer errors, faster processing
Long-term Revenue Stability:
- Flat tax is more predictable for state budgeting
- Less volatility during economic ups and downs
- By 2027 (4.99%), Georgia aims to be highly competitive regionally
Frequently Asked Questions
What if I moved to Georgia mid-year?
You'll be a part-year resident. You'll pay Georgia's 5.19% flat tax only on income earned while living in Georgia. You'll need to file returns in both states. Use the first-in, first-out method or actual method to allocate income.
Does Georgia tax Social Security?
No, Georgia does not tax Social Security benefits at all.
Are there any local income taxes in Georgia cities?
No! Georgia does not allow cities or counties to levy local income taxes. The 5.19% state rate is all you pay. This is a huge advantage over states like Ohio (cities can add 1-3%) or New York (NYC adds ~3-4%).
How does Georgia tax out-of-state income?
If you're a Georgia resident, you pay Georgia tax on all income (including from other states). However, you get a credit for taxes paid to other states to avoid double taxation.
Can I still itemize deductions in Georgia?
Yes, but most people will take the standard deduction ($12,000 single / $24,000 married) because it's generous and simple. You can itemize if your deductions exceed the standard deduction.
What's the penalty for not paying estimated taxes?
If you're self-employed or have significant non-W2 income and don't pay quarterly estimated taxes, Georgia charges interest and penalties. Use Georgia form 500-ES for estimated payments.
When will Georgia's rate drop to 4.99%?
The legislation schedules the reduction to 4.99% by 2027. The exact implementation depends on state revenue targets being met. Georgia wants to ensure the state can afford the reduction before implementing it.
State rankings: Lowest Tax States 2025 | Best States for Retirees | States with Flat Tax | Highest Tax States 2025
Related Resources
- Florida Tax Calculator - Compare Georgia vs FL (0% tax)
- Tennessee Tax Calculator - Compare Georgia vs TN (0% tax)
- North Carolina Tax Calculator - Compare Georgia vs NC (4.25% flat)
- All State Tax Calculators - Compare Georgia to all 50 states
- States With Flat Tax - All flat-tax states like Georgia
- 2025 State Tax Reforms - Georgia's reform + 9 others