07 LC
18 6428-ECS
The
Senate Finance Committee offered the following substitute to HB
225:
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Code Section 48-7-27 of the Official Code of Georgia Annotated, relating
to computation of taxable net income for state income tax purposes, so as to
change certain provisions regarding the amounts of retirement income which may
be excluded from Georgia taxable net income and the requirements regarding such
exclusions; to change certain provisions regarding the deduction for
contributions to certain college savings plans; to provide an effective date; to
provide applicability; to repeal conflicting laws; and for other
purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
Code
Section 48-7-27 of the Official Code of Georgia Annotated, relating to
computation of taxable net income for state income tax purposes, is amended in
subsection (a) by revising paragraph (5) as follows:
"(5)(A)
Retirement income otherwise included in Georgia taxable net income not to exceed
the exclusion
amount
amounts
as follows:
(i)
For taxable years beginning on or after January 1, 1989, and prior to January 1,
1990, retirement income not to exceed an exclusion amount of $8,000.00 per year
received from any source;
(ii)
For taxable years beginning on or after January 1, 1990, and prior to January 1,
1994, retirement income not to exceed an exclusion amount of $10,000.00 per year
received from any source;
(iii)
For taxable years beginning on or after January 1, 1994, and prior to January 1,
1995, retirement income from any source not to exceed an exclusion amount of
$11,000.00;
(iv)
For taxable years beginning on or after January 1, 1995, and prior to January 1,
1999, retirement income from any source not to exceed an exclusion amount of
$12,000.00;
(v)
For taxable years beginning on or after January 1, 1999, and prior to January 1,
2000, retirement income from any source not to exceed an exclusion amount of
$13,000.00;
(vi)
For taxable years beginning on or after January 1, 2000, and prior to January 1,
2001, retirement income not to exceed an exclusion amount of $13,500.00 per year
received from any source;
(vii)
For taxable years beginning on or after January 1, 2001, and prior to January
1, 2002, retirement income from any source not to exceed an exclusion amount of
$14,000.00;
(viii)
For taxable years beginning on or after January 1, 2002, and prior to January 1,
2003, retirement income from any source not to exceed an exclusion amount of
$14,500.00;
(ix)
For taxable years beginning on or after January 1, 2003, and prior to January 1,
2006, retirement income from any source not to exceed an exclusion amount of
$15,000.00;
(x)
For taxable years beginning on or after January 1, 2006, and prior to January 1,
2007, retirement income from any source not to exceed an exclusion amount of
$25,000.00;
(xi)
For taxable years beginning on or after January 1, 2007, and prior to January 1,
2008, retirement income from any source not to exceed an exclusion amount of
$30,000.00;
and
(xii)
For taxable years beginning on or after January 1, 2008,
and prior to
January 1, 2009, retirement income from
any source not to exceed an exclusion amount of
$35,000.00.;
(xiii)
For taxable years beginning on or after January 1, 2009, retirement income from
any source not to exceed an exclusion amount of $35,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (i) or (ii) of
subparagraph (D) of this paragraph or an amount of $65,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (iii) of subparagraph
(D) of this paragraph;
(xiv)
For taxable years beginning on or after January 1, 2010, retirement income from
any source not to exceed an exclusion amount of $35,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (i) or (ii) of
subparagraph (D) of this paragraph or an amount of $100,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (iii) of subparagraph
(D) of this paragraph;
(xv)
For taxable years beginning on or after January 1, 2011, retirement income from
any source not to exceed an exclusion amount of $35,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (i) or (ii) of
subparagraph (D) of this paragraph or an amount of $150,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (iii) of subparagraph
(D) of this paragraph;
(xvi)
For taxable years beginning on or after January 1, 2012, retirement income from
any source not to exceed an exclusion amount of $35,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (i) or (ii) of
subparagraph (D) of this paragraph or an amount of $200,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (iii) of subparagraph
(D) of this paragraph; and
(xvii)
For taxable years beginning on or after January 1, 2013, retirement income from
any source not to exceed an exclusion amount of $35,000.00 for each taxpayer
meeting the eligibility requirement set forth in division (i) or (ii) of
subparagraph (D) of this paragraph or an exclusion of all retirement income from
any source for each taxpayer meeting the eligibility requirement set forth in
division (iii) of subparagraph (D) of this paragraph.
(B)
In the case of a married couple filing jointly, each spouse shall if otherwise
qualified be individually entitled to exclude retirement income received by that
spouse up to the exclusion
amount, so
that the total amount excluded on such joint return may if otherwise allowable
be up to twice the individual exclusion
amount.
(C)
The
exclusion
exclusions
provided for in this paragraph shall not apply to or affect and shall be in
addition to those adjustments to net income provided for under any other
paragraph of this subsection.
(D)
A taxpayer shall be eligible for the
exclusion
exclusions
granted by this paragraph only if the taxpayer:
(i)
Is 62 years of age or older
but less than
65 years of age during any part of the
taxable year;
or
(ii)
Is permanently and totally disabled in that the taxpayer has a medically
demonstrable disability which is permanent and which renders the taxpayer
incapable of performing any gainful occupation within the taxpayer´s
competence;
or
(iii)
Is 65 years of age or older during any part of the taxable
year.
(E)
For the purposes of this paragraph, retirement income shall include but not be
limited to interest income, dividend income, net income from rental property,
capital gains income, income from royalties, income from pensions and annuities,
and no more than $4,000.00 of an individual´s earned income. Earned income
in excess of $4,000.00, including but not limited to net business income earned
by an individual from any trade or business carried on by such individual,
wages, salaries, tips, and other employer compensation, shall not be regarded as
retirement income. The receipt of earned income shall not diminish any
taxpayer´s eligibility for the retirement income
exclusion
exclusions
allowed by this paragraph except to the extent of the express limitation
provided in this subparagraph.
(F)
The commissioner shall by regulation require proof of the eligibility of the
taxpayer for the
exclusion
exclusions
allowed by this paragraph.
(G)
The commissioner shall by regulation provide that for taxable years beginning on
or after January 1, 1989, and ending before October 1, 1990, penalty and
interest may be waived or reduced for any taxpayer whose estimated tax payments
and tax withholdings are less than 70 percent of such taxpayer´s Georgia
income tax liability if the commissioner determines that such underpayment or
deficiency is due to an increase in net taxable income attributable directly to
amendments to this paragraph or paragraph (4) of this subsection enacted at the
1989 special session of the General Assembly and not due to willful neglect or
fraud;"
SECTION
2.
Said
Code section is further amended in subsection (a) by revising paragraph (11) and
by adding a new paragraph to read as follows:
"(11)(A)
For taxable years beginning on or after January 1, 2002,
and prior to
January 1, 2007, an amount equal to
the amount of contributions by parents or guardians of a designated beneficiary
to a savings trust account established pursuant to Article 11 of Chapter 3 of
Title 20 on behalf of the designated beneficiary who is claimed as a dependent
on the Georgia income tax return of the beneficiary´s parents or guardians,
but not exceeding $2,000.00 per beneficiary.
(B)
If the parents or guardians file joint returns, separate returns, or single
returns, the sum of contributions constituting deductions on their returns under
this paragraph shall not exceed $2,000.00 per beneficiary.
(C)
In order to claim the deduction for a taxable year:
(i)
Such parent or guardian must have claimed and been allowed itemized deductions
pursuant to Section 63(d) of the Internal Revenue Code of 1986 and paragraph (1)
of this subsection;
(ii)
The federal adjusted gross income for such taxable year cannot exceed
$100,000.00 for a joint return or $50,000.00 for a separate or single return
except as provided in subparagraph (D) of this paragraph; and
(iii)
Such parent or guardian must be the account owner of the designated
beneficiary´s account.
(D)
The maximum deduction authorized by this paragraph for each beneficiary shall
decrease by $400.00 for each $1,000.00 of federal adjusted gross income over
$100,000.00 for a joint return or $50,000.00 for a separate or single
return.
(E)
For purposes of this paragraph, contributions or payments for any such taxable
year may be made during or after such taxable year but on or before the deadline
for making contributions to an individual retirement account pursuant to Section
219(f)(3) of the Internal Revenue Code of 1986;
(11.1)(A)
For taxable years beginning on or after January 1, 2007, an amount equal to the
amount of contributions to a savings trust account established pursuant to
Article 11 of Chapter 3 of Title 20 on behalf of the designated beneficiary, but
not exceeding $2,000.00 per beneficiary.
(B)
If the contributor files a joint return, separate return, or single return, the
sum of contributions constituting deductions on the contributor´s returns
under this paragraph shall not exceed $2,000.00 per return.
(C)
For purposes of this paragraph, contributions or payments for any such taxable
year may be made during or after such taxable year but on or before the deadline
for making contributions to an individual retirement account under federal law
for such taxable year;"
SECTION
3.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval.
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.