Georgia could become one of several states that excludes military retirement income from taxes.
State lawmakers have proposed a bill that could offer former service members a 10 percent to 100 percent tax exemption on their retirement income.
All Georgia taxpayers 62 or older, or those who are disabled, currently qualify for up to a $35,000 tax exclusion on their retirement income. At 65 and older, the threshold is raised to $65,000.
Senate Bill 363, which was filed Tuesday by Sen. Renee Unterman, R–Buford, offers the financial incentive to former military personnel based on their years of experience.
U.S. Armed Forces members become eligible for retirement after 20 years of service. Georgia residents who have served 20 years or more in the Armed Forces or are disabled can qualify for the tax exemption at 50 years old, under Unterman’s bill.
Starting at 10 percent at 50 years old, the exemption will increase by 10 percent per year in age until 59 years old. For instance, retirees who are 51 will get a 20 percent exemption, 52-year-olds will receive 30 percent and so on. Retirees who are 59 and older will get a full exemption – or 100 percent.
A similar bill was filed by state Rep. Jesse Petrea, R–Savannah, in 2018 and 2019. It stalled in the House in January 2019.
The Georgia Department of Veterans Service would not comment on the legislation but confirmed more than 80,000 retirees lived in the state. The American Legion’s Department of Georgia has more than 40,000 members to date, according to its website. The state also is home to a dozen military bases, according to the Department of Community Affairs.
Retirement income for armed service personnel is based on seniority, rank, base pay at retirement and cost-of-living-adjustments, according to the Congressional Research Service.
In fiscal year 2018, the Department of Defense paid about $59 billion to 2.3 million military retirees and survivors across the nation.
Georgia currently offers homestead and vehicle tax exemptions to veterans. Service members also can qualify for discounted fees for business and occupational licenses.
In 2018, finance publication Kiplinger ranked Georgia as the ninth-worst state for military retirees because of its lack of pension tax exclusion. Georgia was bumped off the list in 2019 by Delaware. Also on that list is California, Vermont, the District of Columbia, Montana, Utah, Virginia, Rhode Island and Arizona.
Twenty states have a wide-ranging income tax exemption for retired service members. Florida, Alaska, Nevada, New Hampshire, South Dakota, Texas, Wyoming and Tennessee do not collect state income tax on personal income.