SB31: SB31 Income Taxes; all income received as retirement benefits derived from service in the armed forces of the United States or the reserve components; exempt from taxation

Georgia currently lets veterans exclude only part of their military retirement pay from state income tax: up to $17,500 for those under 62, plus another $17,500 if they have enough other earned income. Senate Bill 31 rewrites that section of Georgia's income tax law (O.C.G.A. § 48-7-27) so that all retirement income earned from service in the U.S. armed forces or the reserves is exempt from state income tax, removing the age-under-62 requirement tied to the exemption. The bill keeps a related provision allowing married couples filing jointly to each claim the exclusion individually. It also keeps language making clear this exemption applies in addition to other income adjustments already allowed under Georgia tax law. If enacted, the change would take effect July 1, 2025, and apply to tax years beginning on or after January 1, 2026.

• Rewrites part of Georgia's income tax law (O.C.G.A. § 48-7-27) to exempt all military retirement income from state income tax, rather than only a capped amount.
• Removes the requirement that a retiree be under 62 years old to qualify for the exemption on military retirement pay.
• Keeps a rule letting each spouse in a married couple filing jointly claim the exemption individually on their own retirement income.
• Preserves language stating the exemption applies on top of, and does not replace, other income adjustments allowed elsewhere in Georgia tax law.
• Sets the law to take effect July 1, 2025, applying to tax years starting on or after January 1, 2026.

Georgia residents receiving retirement pay from service in the U.S. armed forces or reserve components, including retired veterans of any age, married couples filing joint state tax returns, and the Georgia Department of Revenue, which administers the state income tax exclusion.

Military retirees in Georgia currently owe state income tax on retirement pay above certain caps, and only qualify for part of the break if they are under 62. This bill would let veterans of any age exclude all of that retirement income from state tax, potentially lowering their tax bills starting with the 2026 tax year.

• Section 1 revises paragraph (5.1)(A) of O.C.G.A. § 48-7-27 to exempt all income received as retirement benefits from military service in the armed forces or reserve components, removing the prior age-under-62 limit.
• Section 1 also retains language allowing an additional exclusion tied to Georgia earned income exceeding $17,500, carried over from the current law's structure.
• Section 1 keeps subsection (B), letting each spouse in a married couple filing jointly claim the exclusion individually up to the allowed amount.
• Section 1 retains subsection (C), clarifying the exclusion applies in addition to other income adjustments under Georgia tax law.
• Section 2 sets the effective date as July 1, 2025, applicable to taxable years beginning on or after January 1, 2026.
• Section 3 repeals any conflicting laws.

1. 2025-03-06House Second Readers (House)
2. 2025-03-04House First Readers (House)
3. 2025-03-03Senate Passed/Adopted (Senate)
4. 2025-03-03Senate Third Read (Senate)
5. 2025-03-03Senate Engrossed (Senate)
6. 2025-02-27Senate Read Second Time (Senate)
7. 2025-02-26Senate Committee Favorably Reported (Senate)
8. 2025-01-28Senate Read and Referred (Senate)

• Greg Dolezal (R, SD-027)Primary sponsor
• Steve Gooch (R, SD-051)
• John Kennedy (R, SD-018)
• Jason Anavitarte (R, SD-031)
• Kay Kirkpatrick (R, SD-032)
• Ed Setzler (R, SD-037)
• Marty Harbin (R, SD-016)
• Billy Hickman (R, SD-004)
• Chuck Payne (R, SD-054)
• Carden Summers (R, SD-013)
• Sam Watson (R, SD-011)
• Chuck Hufstetler (R, SD-052)
• Colton Moore (R, SD-053)
• Ben Watson (R, SD-001)
• Mike Hodges (R, SD-003)
• Michael Rhett (D, SD-033)

1. PassedSenate voteMarch 3, 2025

   33 yea, 23 nay

   Motion To Engross: Sb 31, Sb 175: Senate Vote #115

2. PassedSenate voteMarch 3, 2025

   53 yea, 1 nay (2 not voting, 0 absent)

   Passage: Senate Vote #117

• income taxes
• military retirement pay
• veterans benefits
• tax exemptions