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Military Retirement Income Exclusion Under 62 — Rising to $65,000 in 2027

$17,500 excluded — and another $17,500 if you have at least that much earned income. Both close at 62, when a broader exclusion opens instead. From tax year 2027 this changes substantially: 2025 HB 266 excludes up to $65,000 of military retirement income for individuals under 65, drops the earned-income condition, and lets each spouse on a joint return qualify separately. Those figures do not apply to a 2026 return.

Verified August 27, 2026

What this benefit is

$17,500 excluded — and another $17,500 if you have at least that much earned income. Both close at 62, when a broader exclusion opens instead. From tax year 2027 this changes substantially: 2025 HB 266 excludes up to $65,000 of military retirement income for individuals under 65, drops the earned-income condition, and lets each spouse on a joint return qualify separately. Those figures do not apply to a 2026 return.

What it's worth: Up to $17,500 excluded, or $35,000 with $17,500 of earned income — up to $65,000 from tax year 2027

  • Estimated against Georgia’s income tax on the excluded amount. The second $17,500 requires at least $17,500 of earned income in the same year.
  • The exclusion is aimed at retirees under 62. From 62 Georgia’s general retirement income exclusion applies instead and is larger.
  • 2025 HB 266, signed 13 May 2025, rewrites the paragraph for individuals under 65: up to $65,000 of military retirement income excluded, with the $17,500-plus-earned-income structure removed, and each spouse on a joint return qualifying individually.
  • Section 3(b) of the act makes that effective 1 January 2027, applying to taxable years beginning on or after 1 January 2027. It is NOT tax year 2026, though a number of secondary sources report it that way.
  • The amounts published here remain the operative ones for returns through tax year 2026.
  • Under the new law an individual may not combine the military exclusion with the general retirement exclusion in paragraph (5).

Who is entitled to it

  • You draw military retired pay.
  • Your home is in Georgia.

Not sure whether that describes you?

Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.

How to claim it

Deadline: April 15, with your return
  1. 1If you are under 62, claim the military retirement exclusion on your Georgia return.
  2. 2If you also have earned income of at least $17,500, claim the second tranche — it is not automatic and it is the half most often left behind.
  3. 3If you are 62 or over, look at Georgia’s general retirement income exclusion instead; it is broader and this one is not the right route.
File with
The Georgia Department of Revenue, with your annual return
Documents you will need
form 1099 r
Annual
Claimed once a year.
Worth knowingMarried couples filing jointly qualify INDIVIDUALLY. Retirement income and earned income are not combined across spouses when testing the $17,500 thresholds — each spouse is measured on their own.
Worth knowingThe second $17,500 is conditional on earned income, which is the opposite of how most retirement reliefs work. A retiree who takes a job can end up excluding more, not less.

Sources

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.