Georgia State Income Tax: Flat Rate, Deductions and Withholding
Georgia moved from graduated brackets to a flat income tax that steps down on a legislated schedule. The current rate, the Form G-4 withholding certificate and what to file.
Georgia replaced its graduated income tax brackets with a single flat rate, and legislation set that rate to decline in steps over several years subject to revenue conditions. The result is a simpler calculation than most states, with one caveat: the rate you need is the one in force for the tax year you are filing.
The Flat Rate
Under the current schedule the rate sits around 5%, stepping down toward a lower target in later years. Because the reductions are conditional and have been revised by the legislature more than once, treat any rate you remember as provisional and confirm it with the Georgia Department of Revenue for the year in question.
A flat rate means every dollar of Georgia taxable income is taxed at the same percentage. It does not mean every dollar of your income is taxed, because deductions and exemptions still come off first.
Deductions and Exemptions
Georgia provides a standard deduction and personal exemptions that reduce taxable income before the rate is applied. The amounts depend on filing status and the number of dependents, and they have changed alongside the rate reforms. Taxpayers with significant itemised deductions should compare both routes rather than defaulting to the standard figure.
Withholding Runs on Form G-4
Georgia uses its own employee withholding certificate, Form G-4, rather than relying on the federal Form W-4. Payroll uses the entries on the G-4 with the state's withholding tables. If you never completed one, your state withholding is being calculated on a default basis, which is a frequent cause of an unexpected balance at filing.
I go through the rate schedule, the deduction amounts and the G-4 entries in more detail in my guide to Georgia state income taxes for Online Paystub.
Filing
Full-year residents file Form 500. Part-year residents and nonresidents with Georgia-source income use the nonresident schedule to allocate income between Georgia and elsewhere. If you worked in Georgia for part of the year, that allocation is the part of the return worth checking carefully.