Compilation of Rules and Regulations of the State of Georgia › Department 560 - RULES OF DEPARTMENT OF REVENUE › Chapter 560-7 - INCOME TAX DIVISION › Subject 560-7-4 - NET TAXABLE INCOME (INDIVIDUAL) › Rule 560-7-4-.02 - Procedures Governing Retirement Income Exclusion. Amended

Current through Rules and Regulations filed through June 27, 2024
(1)
Eligibility.
Eligibility is provided in O.C.G.A. §
									48-7-27.
(2)
Married Filing Jointly.
In
				the case of a married couple filing jointly, each spouse shall if otherwise
				qualified be individually entitled to exclude retirement income received by
				that spouse up to the exclusion amount for such spouse. Taxpayers must qualify
				on a separate basis. One spouse may not use any income attributable to the
				other spouse in the calculation of his or her retirement exclusion. If property
				is jointly owned, income derived is allocated to each taxpayer at 50 percent of
				the total.
(3)
Effect on
				Other Adjustments.
The exclusion provided for in this paragraph shall
				not apply to or affect and shall be in addition to those adjustments to net
				income provided for under O.C.G.A. §§
									48-7-27 and 
				 48-7-28.2.
				Accordingly, the other income and loss adjustments to Georgia taxable income
				that are required by O.C.G.A. §§
									48-7-27 and 
				 48-7-28.2 shall be added or subtracted first before computing the retirement income
				exclusion. Only retirement income that is included in Georgia taxable income
				shall be included when computing the retirement income exclusion.
(4)
Computation of the Exclusion.
(a) The amount of the exclusion shall
				be determined based on O.C.G.A. §
										48-7-27(a)(5)(A).
(b) Retirement Income.
1. For the purpose of this paragraph,
				retirement income shall be divided into two parts, the unearned income portion
				of the retirement income exclusion and the earned income portion of the
				retirement income exclusion. The unearned income portion of the retirement
				income exclusion shall include interest income, dividend income, net income or
				loss from rental property that is not subject to Federal FICA tax or Federal
				self employment tax, partnership income that is not subject to Federal FICA tax
				or Federal self employment tax, income from an S-corporation in which the
				taxpayer or the taxpayer's spouse does not materially participate and non trade
				or business income from an S-corporation in which the taxpayer or the
				taxpayer's spouse materially participates, capital gains or losses, income from
				royalties, income from pensions and annuities, and other similar income. The
				earned income portion of the retirement income exclusion is limited to no more
				than $4,000.00 of an individual's earned income. This shall include, but not be
				limited to, the net business income earned by an individual from any trade or
				business carried on by such individual, net income or loss from rental property
				that is subject to Federal FICA tax or Federal self employment tax, partnership
				income that is subject to Federal FICA tax or Federal self employment tax,
				trade orbusiness income from an S-corporation in which the taxpayer orthe
				taxpayer's spouse materially participates, wages, salaries, tips, and other
				employer compensation. For purposes of this paragraph, material participation
				shall be determined in the same manner as provided in Internal Revenue Code
				Section 469.
2. Retirement income
				shall not include income received directly or indirectly from lotteries,
				gambling, illegal sources, or similar income. Indirect income from lotteries,
				gambling, illegal sources, or similar income shall include but not be limited
				to such income received through partnerships, S corporations, limited liability
				companies, trusts, estates, etc.
(c) The earned income portion of the
				retirement income exclusion shall be computed separately from the unearned
				income portion of the retirement income exclusion. For both the earned income
				portion of the retirement income exclusion and the unearned income portion of
				the retirement income exclusion, losses shall be offset against income. If
				after each portion has been separately computed, either portion is less than
				zero, the portion that is less than zero shall not be offset against the other
				portion. For example, if the earned income portion of the retirement exclusion
				is a negative $3,000 and the unearned income portion of the retirement income
				exclusion is a positive $9,000, the total retirement income exclusion that is
				allowed shall be $9,000.