Pension income as a non-resident

[Johnsole]

I am a retired, full time resident of Tennessee, so I do not have to file a state return.

However, my pension comes from State of Georgia.  Every year I struggle with the question "I made money in Georgia, but I didn't live there."  Does the pension count as 'earned income?' 

Turbo Tax also has led me to believe that the only reason I have to file in Georgia is because I have withholdings on my pension.  If I cancel all withholdings, which I did mid year in 2022, will that cancel the need to file in Georgia? Will it cause 'red flags' on the Federal taxes?  TYIA 

[DoninGA]

What state the pension originates from is NOT having income from another state.  You DO NOT file Georgia state tax return.  

However -

If you have Georgia state income taxes withheld from your pension income then you need to contact the  pension plan administrator and have them stop withholding GA state taxes.  In this case you do file a nonresident GA state tax return to get all of the taxes withheld refunded to you.  On the nonresident return you enter 0 for income earned in GA.

FWIW - My pension comes from New York state and I live in Georgia.  I do not file a New York state tax return.

[DawnC · Accepted solution]

No, pension income is not earned income.   Yes, if you cancel GA withholding, that will cancel your need to file a GA return.   And no, it will not raise red flags.   You don't owe GA tax on your retirement income.   Pension and retirement income is only taxable on your resident return, which for a resident of TN is nontaxable.   

[Johnsole]

Thank you.  I Have already cancelled my withholdings (mid year, so I have to file to get my 2022 withholdings back), so 2023 taxes will be a breeze.  I appreciate the confirmation of what I thought was true.  Just making sure.