If you are a Tennessee resident, you may owe Georgia income taxes if you lived part of the year in Georgia or if you earned income from a Georgia company. Of course, you also pay sales, excise and use taxes any time you are a visitor to Georgia and local property taxes if you have a second home or vacation property in the Peach State.
Residents and Nonresidents
If you are a resident of Georgia for part of the year and have to file a federal income tax return, then you must also file a Georgia tax return. If you live in Tennessee but work in Georgia, or earn money from a Georgia company, you also must file a Georgia return. The income may be wages, salary, rent or the earnings from a partnership or corporation established in Georgia. Georgia also taxes any lottery or gambling winnings you earned from a Georgia source.
If you are a resident of Tennessee and only earned money as an employee in Georgia, then you don't need to file a Georgia return if the money you earned in Georgia is not more than $5,000, or 5 percent of your total income, whichever is less. If your total wages for the year were $80,000, for example, and you earned less than $4,000 in Georgia, then you don't need to file a return. If your total wages were $100,000 or more, you are exempt if you made less than $5,000 in Georgia.
Schedule 3 and Tax Credits
To calculate the income subject to Georgia income tax, part-time residents and nonresidents complete Georgia's Schedule 3. To complete the form, you enter income earned from Georgia and non-Georgia sources, calculate and apply the ratio between the two numbers, subtract federal and state exemptions and arrive at Georgia taxable income. In addition, you may take a credit for taxes paid to another state to taxes owed to Georgia; the credit may not exceed your Georgia tax liability.
Tennessee Income Tax
Tennessee, in the meantime, requires you to file a tax return if you moved to or from the state and earned more than $1,250 while you lived in Tennessee. This applies to individuals; the earnings threshold is $2,500 for a couple filing a joint return. Income includes wages, interest, dividends and capital gains from mutual funds; Tennessee exempts interest on bank accounts, Tennessee municipal bonds and capital gains on stock transactions.
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