About Georgia State Income Tax
The Georgia state income tax is one of 41 state income taxes around the country. It is a progressive system where the tax rate increases as the amount of taxable income also increases. The Georgia state income tax is a six-bracket format in which most of the state's taxpayers pay 6 percent tax on their income. The numbers and statistics in this article were current as of 2010.
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Function
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The Georgia state income tax is collected through the state's department of revenue and is the principal revenue source for the state government. On average Georgia residents pay nearly $4.5 million in individual income taxes and another $500,000 in corporate income taxes. These tax payments make up nearly two-thirds of Georgia's revenue, which is used to fund a variety of state programs including education, welfare services, highways, health services and corrections. In addition through voluntary contributions provided through Georgia state tax returns, more than $1 million is raised yearly for charitable programs in the state.
Types
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The Georgia state income tax has six brackets with a progressive tax rate of tax in each bracket. For single filers, the tax rates are: 1 percent for taxable income up to $750; 2 percent for taxable income from $751 to $2,250; 3 percent for taxable income from $2,251 to $3,750; 4 percent for taxable income from $3,751 to $5,250; 5 percent for taxable income from $5,251 to $7,000; and 6 percent for taxable income of more than $7,000. For married couples, single parents and head of households the tax rates remain the same but the 1 percent bracket begins at $1,000 and the 6 percent bracket begins at $10,000.
Features
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The Georgia state income tax system features several exemptions and credits. Married couples filing jointly are entitled to a standard exemption of $5,400, and a single person is entitled to an exemption of $2,700. The exemption for each dependent is 3,000. Also people over the age of 62 are entitled for a credit of up to $35,000 for retirement income and those with income of less than $20,000 can file for the low-income credit, which is similar to the federal earned income credit. There are also deductions for qualified contributions to retirement plans, health plans and college savings accounts.
Time Frame
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The deadline for filing a Georgia state income tax return and paying any owed taxes is April 15. Because the starting point for a Georgia return is a person's federal adjusted gross income, the federal tax return must be completed first. Extensions for filing the state return are available through the department of revenue, but in all cases owed taxes must be paid by the April 15 deadline to avoid interest and penalties. Refunds for Georgia state income taxes are typically issued after the return is processed and can take anywhere from two to six weeks depending on when the return is filed.
Expert Insight
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Studies conducted by CNN and "Money Magazine" have consistently rated Georgia in the bottom half of all states in terms of income tax burden. This is because its highest tax rate of 6 percent is lower than or equal to the maximum tax rate of 25 of the other 40 states with income tax system. Also its minimum tax rate is one of the lowest in the country. However Georgia has drawn criticism in some circle because of it low threshold -- $7,000 for single or $10,000 for joint -- for the maximum tax rate. Under the system the vast majority of Georgia taxpayers are subjected to the highest income tax rate.
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