Georgia does not tax capital gains at a special rate. A gain from stocks, a business or real estate is part of your federal adjusted gross income, and Georgia taxes the whole of that income at one flat rate. That makes the Georgia side simple, but there are three points worth knowing: the rate fell for 2026, nonresidents are taxed only on the Georgia share, and Georgia lets you subtract some federal items but has no capital gains subtraction that we found.
This guide uses the Georgia Department of Revenue's Important Tax Updates page, its 2025 IT-511 individual income tax booklet, House Bill 463 and two IRS pages, all read on 3 November 2026. We also read the text of Georgia House Bill 463 (2026) as passed, which amends O.C.G.A. 48-7-20 and 48-7-27 and set the 2026 rate; we did not read the current codified statute, so every other rule below is stated as the Department states it.
The Department's Important Tax Updates page, under 2026 Income Tax Changes, says the Georgia income tax rate has been reduced to a flat rate of 4.99%. The same page says the standard deduction has increased to $15,000 for single taxpayers, heads of households and married taxpayers filing separately, or $30,000 for married taxpayers filing jointly.
For the previous year, the Department's 2025 IT-511 booklet says that effective January 1, 2025, the income tax rate is 5.19%, and the Form 500 instructions tell filers to multiply taxable income by 5.19% and round to the nearest dollar. The Act that set the 2026 rate (House Bill 463, as passed, applying to taxable years beginning on or after January 1, 2026) also provides for further rate cuts of 0.125 percentage point a year from 2027 until the rate reaches 3.99%, but each cut is delayed by a year if the revenue tests in the Act are not met as of December 1. No 2027 rate is therefore fixed in advance; check the Department before planning a later sale. The same Act raises the standard deduction by $750 (joint) or $375 (other filers) a year from 2027, up to $36,000 or $18,000, subject to the same delays.
The booklet's instruction for Form 500 Line 8 says to enter federal adjusted gross income from Form 1040 and not federal taxable income. A capital gain that is reported on your federal return is therefore already in your starting figure, and Georgia then taxes it with the rest of your income. We read nothing in the Georgia pages that treats short-term and long-term gains differently.
Line 9 lets you adjust that figure for income taxable federally but not by Georgia, or the reverse, on Schedule 1. The booklet gives one example of a federal deduction Georgia does not follow: Georgia does not allow the 20% qualified business income deduction, and because Georgia starts with federal adjusted gross income no adjustment is needed on the Georgia return. We found no Schedule 1 subtraction aimed at capital gains in the additions and subtractions lists of the booklet, so a gain is taxed unless a general subtraction applies to you. The main one is the retirement income exclusion, which the booklet caps at $35,000 for people aged 62 to 64 (or permanently disabled under 62) and $65,000 for those 65 or older; its worked example lists capital gains among the unearned income lines (Line 9) that count toward the exclusion, so check the booklet's eligibility rules and worksheet. House Bill 463 raises the $65,000 cap to $70,000 for taxable years beginning on or after January 1, 2027.
The federal system can tax a net capital gain at a lower rate than ordinary income. IRS Topic 409 says that if you have a net capital gain, a lower tax rate may apply than the rate that applies to your ordinary income, that you generally have a long-term gain if you hold the asset more than one year, and that net short-term capital gains are taxed as ordinary income at graduated rates. Georgia's return, as the Department's booklet describes it, applies one flat rate to taxable income. We found no holding-period or lower-rate rule in the Georgia pages.
This table is our arithmetic (gain times the flat rate), not an official calculation. It shows the Georgia tax a gain adds when it sits on top of your other taxable income, ignoring credits, exemptions and adjustments, rounded to the nearest dollar.
| Capital gain included in federal AGI | Added Georgia tax at 4.99% (2026) | Added Georgia tax at 5.19% (2025) |
|---|---|---|
| $10,000 | $499 | $519 |
| $50,000 | $2,495 | $2,595 |
| $100,000 | $4,990 | $5,190 |
| $500,000 | $24,950 | $25,950 |
Worked example (ours): a single filer has $60,000 of wages and a $50,000 long-term gain in the tax year, takes the Georgia $15,000 standard deduction and has no adjustments, credits or dependents. Federal adjusted gross income is $110,000 and Georgia taxable income is $95,000, so tax at 4.99% is $4,741. Without the gain, taxable income would be $45,000 and tax $2,246. The gain adds $2,495. Real returns can differ because of credits, exemptions, itemized deductions and other items on Form 500.
The booklet says full-year residents are taxed on all income, except tax-exempt income, regardless of the source or where derived.
Nonresidents who work in Georgia or receive income from Georgia sources and are required to file a federal return must file a Georgia return. Part-year residents and nonresidents skip Lines 9 to 14 and use Schedule 3. In Schedule 3, Column A lists your income as if you were a Georgia resident and Column C lists your Georgia taxable income. Line 9 divides Line 8 Column C by Line 8 Column A to give the ratio of Georgia income to total income, and the ratio cannot exceed 100%.
The booklet also says withholding is required on the sale or transfer of real property and associated tangible personal property by nonresidents of Georgia, reported on Form G2-RP and entered on Form 500, Line 25. In the passages we read it does not say how a nonresident should treat a gain on intangible assets such as stock, so we do not state a rule for that; ask the Department or a preparer.
The booklet's Georgia rules start from federal adjusted gross income, and we found no separate Georgia home sale rule. IRS Topic 701 says you may qualify to exclude up to $250,000 of the gain on the sale of your main home from your income, or up to $500,000 if you file a joint return with your spouse. Because that excluded gain is not part of your income on the federal return, we read the effect as leaving only the gain above the exclusion for Georgia to tax at the flat rate; the Department's pages we read do not say this in so many words. For the federal test, see our home sale capital gains guide.
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