Starting July 1st, a new Georgia law, HB266, is set to provide a significant tax break to military retirees across the state. Signed into law recently, the bill aims to simplify and enhance the existing retirement income exemption, offering a potential savings for those who served our nation.

Beginning with the 2026 tax year (affecting taxes filed in 2027), all military retirees in Georgia will be able to exempt up to $65,000 of their military retirement income from state income tax, regardless of age. This marks a substantial increase and simplification compared to the previous tiered system, which offered varying exemptions based on age. Formerly, the exemption was $17,500 for those under 62, $35,000 for those between 62 and 64, and $65,000 for those 65 and older. It’s important to note that the new exemption applies specifically to military retirement income and cannot be combined with other existing income exclusions.

Additionally, the exemption does not currently extend to survivor benefits or members of the U.S. Public Health Service or NOAA. However, discussions are underway regarding a potential expansion of the law to include all “uniformed services,” which would encompass retired officers from the USPHS and NOAA. This would further broaden the scope of the tax benefit and provide even greater support to those who have served.

Military retirees in Georgia are encouraged to consult with a tax professional to understand the full impact of HB266 on their individual tax situations.