Georgia: state tax on early 401(k) and IRA withdrawals
Georgia's retirement income exclusion is generous once it starts, but it starts at 62: a FIRE retiree drawing a 401(k) or IRA in the fifties pays the flat 4.99 % on every dollar.
Georgia: state tax on this withdrawal
$1,996
Georgia excludes up to $35,000 a person from 62 to 64 and $65,000 from 65 (2025 booklet amounts); before 62, payouts are fully taxable.
| Excluded by the state | $0 |
| Taxed by the state | $40,000 |
| Rate used | 4.99 % |
| State early-distribution tax | $0 |
Worked out by Radif Partners · How we calculate · rules read on the Georgia revenue department site, tax year 2026
Georgia excludes up to $35,000 of retirement income per person from 62 to 64 and up to $65,000 from 65, IRA and plan payouts included. Those are the amounts in the 2025 IT-511 booklet; the 2026 booklet was not out when we read the Department of Revenue site, and its 2026 tax updates page shows no change to them. Below 62, unless permanently and totally disabled, retirement distributions are fully taxable, and from 2026 the state rate is a flat 4.99 %, down from 5.19 % in 2025. For someone who stops working at 50, that means 12 years of fully taxed withdrawals before the exclusion appears. On $45,000 a year, Georgia takes $2,246 at 58, $499 at 63 and $0 at 66. Each spouse must qualify on their own age and income, and up to $5,000 of the exclusion may be earned income, such as part-time pay in a Barista FIRE plan.
A long wait for early retirees
Georgia's exclusion is aimed at traditional retirees, and its age gate shows it. The IT-511 booklet sets the maximum at $35,000 for taxpayers "62 - 64 years of age" and $65,000 at 65 or older. Nothing is available at 55, at 59½ or at 61. A resident who leaves work at 50 and lives on a 401(k) or IRA until 62 reports every dollar to Georgia for 12 years, whatever the IRS says about the federal penalty.
Georgia tax on a withdrawal at 58
Georgia: state tax on this withdrawal
$2,246
| Excluded by the state | $0 |
| Taxed by the state | $45,000 |
| Rate used | 4.99 % |
| State early-distribution tax | $0 |
One withdrawal, three ages
| Age during the year | Georgia exclusion | Taxed in Georgia | Tax at 4.99 % |
|---|---|---|---|
| 58 | $0 | $45,000 | $2,246 |
| 63 | $35,000 | $10,000 | $499 |
| 66 | $45,000 | $0 | $0 |
The drop between 61 and 62 is the largest single change in the table. That is why the order of withdrawals matters more in Georgia than the rate alone suggests: pre-tax money drawn at 60 is taxed in full, while the same money drawn at 62 sits largely inside the exclusion.
Filling the years before 62
The years from leaving work to 62 are better carried by money that adds little or nothing to taxable income. Roth contributions come back out without federal tax, and cash savings are not income at all. A Roth conversion ladder works too, with one Georgia point to weigh: a conversion before 62 raises income in a year when no state exclusion exists to absorb it. Whether a conversion made after 62 falls inside the exclusion is not something the booklet we read addresses, so this page leaves it open. The bridge page lays out the federal sequence.
Couples and part-time work
Each spouse qualifies separately, on their own age and income. A 63-year-old married to a 58-year-old has one exclusion, not two: the younger spouse's IRA withdrawals stay fully taxable until that spouse reaches 62. Up to $5,000 of each person's exclusion may be earned income, which helps a Barista FIRE retiree past 62 who keeps a part-time job. A taxpayer who is permanently and totally disabled can claim the exclusion before 62.