SB 31: 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 allows a limited state income tax break for military retirement pay: individuals under 62 can exclude up to $17,500, with an extra $17,500 available if they also have enough earned income. This bill rewrites that part of Georgia's income tax law (O.C.G.A. § 48-7-27) to remove those limits entirely. Under the bill, all income a person receives as retirement benefits from service in the U.S. armed forces or its reserve components would be exempt from Georgia income tax, regardless of age or other earned income. It also removes a provision that let each spouse in a married couple separately claim the old exclusion, since the new exemption applies without a dollar cap. The change would take effect July 1, 2025, and apply to tax years starting on or after January 1, 2026.

• Removes the current $17,500 cap (and the additional $17,500 for those with enough other earned income) on the military retirement income tax exclusion.
• Eliminates the age-62 restriction, so veterans of any age can claim the full exemption on military retirement pay.
• Makes all military retirement income, from active duty or reserve component service, fully exempt from Georgia state income tax.
• Removes the separate spousal exclusion rule since it is no longer needed once the exemption becomes unlimited.
• Sets the law to take effect July 1, 2025, applying to tax years beginning on or after January 1, 2026.

Military retirees living in Georgia who receive retirement pay from the armed forces or reserve components, including those previously too young or with too little other income to claim the full existing exclusion. It also affects the state's income tax revenue collection.

Veterans who receive military retirement pay would no longer have any state income tax owed on that income, potentially saving eligible retirees thousands of dollars a year depending on their pension size, while reducing the state tax revenue collected from this group.

• Section 1 revises O.C.G.A. § 48-7-27(a)(5.1)(A), changing the exclusion from 'up to $17,500' for those under 62 to 'all' military retirement income regardless of age.
• Section 1 removes the extra $17,500 exclusion tier that previously required the taxpayer to have Georgia earned income exceeding $17,500.
• Section 1 deletes former subsection (B), which had let each spouse in a joint filing separately claim the capped exclusion.
• Section 2 sets the effective date as July 1, 2025, applicable to taxable years beginning on or after January 1, 2026.

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

• Greg Dolezal (R, SD-027)Patrocinador principal
• 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. AprobadaVotación: Senado3 de marzo de 2025

   33 a favor, 23 en contra

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

2. AprobadaVotación: Senado3 de marzo de 2025

   53 a favor, 1 en contra (2 sin votar, 0 ausentes)

   Passage: Senate Vote #117

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