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Category: Georgia

Georgia Subtractions from Income

If you have income that is taxable by the Federal Government but not taxable to Georgia, you must adjust your Federal Adjusted Gross Income. The following is a list of additional adjustments that may be subtracted or allowed by the State of Georgia.

1. Other State Tax Refunds included on your Federal Return: Income tax refunds from states other than Georgia included in Federal adjusted gross income.

Note: Do not subtract Georgia income tax refunds.


2. Salaries and WagesSalaries and wages reduced from Federal taxable income because of the Federal Jobs Tax Credit.


3. Individual retirement account, Keogh, SEP and SUB-S: Individual retirement account, Keogh, SEP and SUB-S plan withdrawals where tax has been paid to Georgia because of the difference between Georgia and Federal law for tax years 1981 through 1986.


4. Depreciation Adjustment: Depreciation because of differences in Georgia and Federal law during tax years 1981 through 1986.


5. Income Taxed at Corporate Level: Adjustment to Federal Adjusted Gross Income for Georgia Resident shareholders for Subchapter S income where the Sub S election is not recognized by Georgia or another state in order to avoid double taxation.

This adjustment is only allowed for the portion of income on which the tax was actually paid by the corporation to another state (s).**In cases where the Sub S election is recognized by another state(s) the income should not be subtracted but a credit for taxes paid to other states may apply.


Adjustments to Federal adjusted gross income for Georgia resident partners in a partnership or member(s) in a LLC where such entities income has been taxed at the entity level by another state. Adjustment is only allowed for the portion of income on which the tax was actually paid.


6. Dependent’s Unearned Income: Dependent’s unearned income included in parents’ Federal adjusted gross income.


7. Funds and Programs: Income from any fund, program or system which is exempted by Federal law or treaty.


8. Teachers Retirement: Adjustment for teachers retired from the Teacher’s Retirement System of Georgia for contributions paid between July 1, 1987 and December 31, 1989 that were reported to and taxed by Georgia.


9. High Deductible Health Plans Premiums Paid : An amount equal to 100% of the premium paid by the taxpayer during the taxable year for high deductible health plans as defined by Section 223 of the Internal Revenue Code. The amount may only be deducted to the extent the deduction has not been included in federal adjusted income and the expenses have not been provided from a health reimbursement arrangement and have not been included in itemized deductions.


10. Retirement Income : For tax year 2016, the maximum retirement income exclusion is $35,000 for taxpayers who are:

A. 62 - 64 years of age


B. less than 62 and permanently disabled to such an extent that they are unable to perform any type of gainful employment.

The retirement exclusion is $65,000 if the taxpayer is 65 or older.

The exclusion is available for the taxpayer and his/her spouse; however each must qualify separately.


11. Georgia Higher Education Savings Plan (529) : Deductible portion of contributions to the Path2College 529 Plan. The deduction is limited on a return to the amount contributed but cannot exceed $2000 per beneficiary.