TAX NEWS - JUNE 2009

Nonresidents and part-year residents Tax FAQ - State of Georgia tax

Q. Is severance pay received by a nonresident taxable for Georgia purposes?

A. Severance pay received by a nonresident is not taxable for Georgia purposes. Non taxable severance pay is defined as pay that is received for which no services are rendered in Georgia. Any portion of the income included in the W-2 that is received for past or future services rendered in Georgia, including accrued vacation, sick pay, and holidays, will still be taxable for Georgia purposes as is outlined in the next question. For example, a taxpayer is terminated by a Georgia employer but the employer agrees to pay them $500 per week severance pay for two weeks. No services are required to be rendered to receive this pay. The first week the taxpayer receives a check for $1100, which includes $500 of severance pay and $600 of accrued vacation pay. The $600 accrued vacation pay is taxable for Georgia purposes but the $500 severance pay is not taxable. The next week the taxpayer receives a check for $500 for severance pay. This is not taxable for Georgia purposes.


Q. Are vacation, holiday, and sick pay for a nonresident who works in Georgia taxable for Georgia purposes?

A. If a nonresident works in Georgia, he/she is taxed on all income that is received from an employer, including vacation, holiday, and sick pay, based on regulation 560-7-8-.01(b)(1), unless he/she falls under the 5% exception of Georgia code section 48-7-1(11)(A). Georgia regulation 560-7-8-.01(b)(1) is clear that for a nonresident the actual number of days worked in Georgia divided by the total days worked everywhere is the ratio that should be applied to determine Georgia source income. If the nonresident only works in Georgia, the ratio would be 100 percent and all income that is included in the W-2 that is received for past or future services rendered in Georgia, including vacation, holiday, and sick pay, would be taxable for Georgia purposes.


Q. If I am receiving a pension from another state and I move to Georgia, is the pension taxable for Georgia purposes?

A. Yes.


Q. If I am receiving a pension from Georgia and I move to another state, is the pension taxable for Georgia purposes?

A. No.


Q. What form should be used by a nonresident or a part-year resident?

A. Form 500, including schedule 3.


Q. I live in another state but receive interest from a savings account in a Georgia bank. Is it taxable for Georgia purposes?

A. Generally it is not taxable for Georgia purposes if an individual owns it.