Does the State of Georgia impose a limit on the amount of retirement income (i.e. social security) which may be deducted from taxable gross income?

TurboTax is calculating a deduction for retirement income from my Georgia income but the value is only about 20% of the social security payment received


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When it comes to Georgia tax returns you must look at retirement income and Social Security seperately.

First of all let's take Social Security. Some of your social security may be taxable on your Federal return. This will appear on line 20b on your Form 1040. If you input this correctly then this amount will be transferred to Schedule 1  line 8 of the Georgia return as a SUBTRACTION from income.Therefore any taxable SS income on the Federal is never taxed on the Georgia return.

Now let's look at other income. If you are 62 or older and if your spouse is 62 or older you qualify for the Georgia retirement exclusion. This is a SUBTRACTION from income on line 7 of Schedule 1 of the Georgia Form 500.

Many think you have to be retired to receive this and many do not realize all the different incomes that can be included. If you or your spouse are 62-64 then one or both are entitled to a retirement exclusion of up to $35,000. If you or your spouse are 65 or older you  or both of you qualify for up to $65,000 each. Now what income can be excluded. Pensions, dividends, interest, capital gains, and really almost anything with the exception of earned income which is limited to $4,000 as part of your exclusion. The problem that some have is that one or both of you may not have enough income in your name to use the entire exclusion. Joint income counts 50/50 for each.

I hope this clears up the way Georgia handles these 2 income sources.

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