HB 782 - Income tax; certain retirement income exclusion; remove limitation

First Reader Summary

A BILL to amend Code Section 48-7-27 of the Official Code of Georgia Annotated, relating to computation of Georgia taxable net income, so as to remove certain limitations with respect to the exclusion of certain retirement income; and for other purposes.

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HB 782                                             LC 18 8071 
 
 
 
 
 
 
                        A BILL TO BE ENTITLED 
                               AN ACT 
 
 
  1- 1  To amend Code Section 48-7-27 of the Official Code of 
  1- 2  Georgia Annotated, relating to computation of Georgia 
  1- 3  taxable net income, so as to remove certain limitations with 
  1- 4  respect to the exclusion of certain retirement income; to 
  1- 5  provide an effective date; to repeal conflicting laws; and 
  1- 6  for other purposes. 
 
  1- 7       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 
 
  1- 8                           SECTION 1. 
 
  1- 9  Code Section 48-7-27 of the Official Code of Georgia 
  1-10  Annotated, relating to computation of Georgia taxable net 
  1-11  income, is amended by striking paragraph (5) of subsection 
  1-12  (a) and inserting in its place a new paragraph (5) to read 
  1-13  as follows: 
 
  1-14        "(5)(A) Retirement income otherwise included in 
  1-15        Georgia taxable net income not to exceed the exclusion 
  1-16        amount as follows: 
 
  1-17          (i) For taxable years beginning on or after January 
  1-18          1, 1989, and prior to January 1, 1990, retirement 
  1-19          income not to exceed an exclusion amount of 
  1-20          $8,000.00 per year received from any source; 
 
  1-21          (ii) For taxable years beginning on or after January 
  1-22          1, 1990, and prior to January 1, 1994, retirement 
  1-23          income not to exceed an exclusion amount of 
  1-24          $10,000.00 per year received from any source; 
 
  1-25          (iii) For taxable years beginning on or after 
  1-26          January 1, 1994, and prior to January 1, 1995, 
  1-27          retirement income from any source not to exceed an 
  1-28          exclusion amount of $11,000.00; and 
 
  1-29          (iv) For taxable years beginning on or after January 
  1-30          1, 1995, retirement income from any source not to 
  1-31          exceed an exclusion amount of $12,000.00. 
 
 
 
 
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  2- 1        (B) In the case of a married couple filing jointly, 
  2- 2        each spouse shall if otherwise qualified be 
  2- 3        individually entitled to exclude retirement income 
  2- 4        received by that spouse up to the exclusion amount, so 
  2- 5        that the total amount excluded on such joint return 
  2- 6        may if otherwise allowable be up to twice the 
  2- 7        individual exclusion amount. 
 
  2- 8        (C) The exclusion provided for in this paragraph shall 
  2- 9        not apply to or affect and shall be in addition to 
  2-10        those adjustments to net income provided for under any 
  2-11        other paragraph of this subsection. 
 
  2-12        (D) A taxpayer shall be eligible for the exclusion 
  2-13        granted by this paragraph only if the taxpayer: 
 
  2-14          (i) Is 62 years of age or older during any part of 
  2-15          the taxable year; or 
 
  2-16          (ii) Is permanently and totally disabled in that the 
  2-17          taxpayer has a medically demonstrable disability 
  2-18          which is permanent and which renders the taxpayer 
  2-19          incapable of performing any gainful occupation 
  2-20          within the taxpayer's competence. 
 
  2-21        Provided, however, that the limitations provided for 
  2-22        in this subparagraph shall not apply to taxable years 
  2-23        beginning on or after January 1, 1998. 
 
  2-24        (E) For the purposes of this paragraph, retirement 
  2-25        income shall include but not be limited to interest 
  2-26        income, dividend income, net income from rental 
  2-27        property, capital gains income, income from royalties, 
  2-28        income from pensions and annuities, and no more than 
  2-29        $4,000.00 of an individual's earned income.  Earned 
  2-30        income in excess of $4,000.00, including but not 
  2-31        limited to net business income earned by an individual 
  2-32        from any trade or business carried on by such 
  2-33        individual, wages, salaries, tips, and other employer 
  2-34        compensation, shall not be regarded as retirement 
  2-35        income.  The receipt of earned income shall not 
  2-36        diminish any taxpayer's eligibility for the retirement 
  2-37        income exclusion allowed by this paragraph except to 
  2-38        the extent of the express limitation provided in this 
  2-39        subparagraph. 
 
  2-40        (F) The commissioner shall by regulation require proof 
  2-41        of the eligibility of the taxpayer for the exclusion 
  2-42        allowed by this paragraph. 
 
 
 
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  3- 1        (G) The commissioner shall by regulation provide that 
  3- 2        for taxable years beginning on or after January 1, 
  3- 3        1989, and ending before October 1, 1990, penalty and 
  3- 4        interest may be waived or reduced for any taxpayer 
  3- 5        whose estimated tax payments and tax withholdings are 
  3- 6        less than 70 percent of such taxpayer's Georgia income 
  3- 7        tax liability if the commissioner determines that such 
  3- 8        underpayment or deficiency is due to an increase in 
  3- 9        net taxable income attributable directly to amendments 
  3-10        to this paragraph or paragraph (4) of this subsection 
  3-11        enacted at the 1989 special session of the General 
  3-12        Assembly and not due to willful neglect or fraud;". 
 
  3-13                           SECTION 2. 
 
  3-14  This Act shall become effective on January 1, 1998. 
 
  3-15                           SECTION 3. 
 
  3-16  All laws and parts of laws in conflict with this Act are 
  3-17  repealed. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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