Georgia Tax Form 500-EZ - Short Individual Income Tax Return Instructions

WHERE DO YOU FILE?

WHERE TO FILE FOR INDIVIDUAL TAXPAYERS

Form 500 Tax Returns: Form 500 2D Tax Returns:  
Refunds Refunds Form 500-ES Individual Estimated Tax:
GEORGIA DEPARTMENT OF REVENUE
PROCESSING CENTER
PO BOX 740380
ATLANTA GA 30374-0380
 GEORGIA DEPARTMENT OF REVENUE
PROCESSING CENTER
PO BOX 105597
ATLANTA GA 30348-5597		 GEORGIA DEPARTMENT OF REVENUE
PROCESSING CENTER
PO BOX 740319
ATLANTA GA 30374-0319
Payments Payments Payments
GEORGIA DEPARTMENT OF REVENUE
PROCESSING CENTER
PO BOX 740399
ATLANTA GA 0374-0399		 GEORGIA DEPARTMENT OF REVENUE
PROCESSING CENTER
PO BOX 105613
ATLANTA GA 30348-5613		 GEORGIA DEPARTMENT OF REVENUE
PROCESSING CENTER
PO BOX 740323
ATLANTA GA 30374-0323

NEW DEVELOPMENTS

Georgia Student Finance Authority Funds- Effective for taxable years beginning on or after January 1, 2008, individual taxpayers may contribute to student loan funds. See page 5 for more information.

Contributions to the Georgia Higher Education Fund- Effective for taxable years beginning on or after January 1, 2008, other-than-qualified withdrawals from a savings trust account and withdrawals from a savings trust account which are rolled over to a tuition program other than the Georgia Higher Education Savings Plan, may be subject to taxation.

For additional information, see the Regulation 560-7-4.04 on the Georgia DOR website

Assignment of Lottery Prize Proceeds- Effective May 12, 2008, the right of a person to a prize payable by the Georgia Lottery Corporation in installment payments may be voluntarily assigned in certain circumstances. In this case, the assignee withholds federal and state income tax from the purchase price.

Qualified Education Expense Credit- Effective for taxable years beginning on or after January 1, 2008, a credit is allowed for contributions to a student scholarship organization. An individual is eligible for a credit of up to $1,000 (single or head of household), $1,250 (married filing separate), or $2,500 (married filing joint). The credit is allowed on a first come, first served basis and must be preapproved. The taxpayer must add back to Georgia taxable income that part of any federal charitable contribution deduction taken on a federal return for which a credit is allowed. Please see forms IT-QEE-TP1 and IT-QEE-TP2 for more information.

Adoption Credit Effective for taxable years beginning on or after January 1, 2008, a taxpayer is entitled to an income tax credit for the adoption of a qualified foster child. This credit applies to adoptions occurring in taxable years beginning on or after January 1, 2008. The amount of the credit is $2,000 per qualified foster child per taxable year, commencing with the year in which the adoption becomes final, and ending in the year in which the adopted child attains the age of 18.

Premium Payments for High Deductible Health Plans- Effective for taxable years beginning on or after January 1, 2009, taxpayers may subtract from taxable income an amount equal to 100 percent of the premium paid by the taxpayer during the taxable year under the applicable provisions of Section 223 of the Internal Revenue Code. The amount may only be deducted to the extent the amount has not been included in federal adjusted gross income and the expenses have not been provided from a health reimbursement arrangement and have not been included in itemized non business deductions.

Employer Health Insurance Credit- Effective for taxable years beginning on or after January 1, 2009, an employer (but only an employer who employs 50 or fewer persons either directly or whose compensation is reported on Form 1099) is allowed a tax credit for qualified health insurance expenses in the amount of $250.00 for each employee enrolled for twelve consecutive months in a qualified health insurance plan. Qualified health insurance means a high deductible health plan that includes, at a minimum, catastrophic health care coverage which is established and used with a health savings account established under Section 223 of the Internal Revenue Code. The qualified health insurance must be made available to all employees and compensated individuals of the employer pursuant to the applicable provisions of Section 125 of the Internal Revenue Code. The total amount of the tax credit for a taxable year cannot exceed the employer’s income tax liability. The qualified health insurance premium expense must equal at least $250 annually.

ELECTRONIC FILING

The Department of Revenue has entered into an alliance with certain software companies to offer free on-line filing services to Georgia taxpayers. Under this agreement, qualified taxpayers can prepare and file their Georgia individual income tax returns for free using approved software.

Some software companies have income limitations and other restrictions for their free services. Please review each company’s offer before selecting a product. For more information, visit our website at www.dor.ga.gov/inctax/efile/ TSD_Free_Electronic_Filing_Program_2008.pdf.

If you do not qualify for free electronic services, you may file electronically using software produced by an approved vendor listed at www.dor.ga.gov/inctax/efile/electronicfile.aspx.

TWO-DIMENSIONAL BARCODE RETURNS

If you choose to file a paper return, we recommend using a return containing a two-dimensional (2D) barcode. A 2D barcode is similar to the one located on the back of your Georgia driver’s license. Information from your return is captured by a machine-readable barcode rather than manually entered, which reduces processing errors. The 2D barcode is only visible after your return has been printed.

A list of companies that produce forms with a 2D barcode is available at www.dor.ga.gov/processingctr/taxpayers.aspx.

CREDIT CARD PAYMENTS

The Georgia Department of Revenue accepts Visa, American Express, MasterCard, and Discover credit cards as payment for current year individual income tax due on original Forms 500, 500EZ, and 500ES, as well as liabilities presented to taxpayers via Georgia Department of Revenue assessment notices. To make a payment, use Official Payments Corporation’s (OPC) secure website or call OPC toll-free at 1800- 2PAY-TAX. When calling, use Jurisdiction Code 2000.

For more information, visit our website at www.dor.ga.gov/ inctax/creditcardpay.aspx.

ELECTRONIC PAYMENTS

In April 2006, the Department of Revenue implemented a system to allow taxpayers to file and pay certain business taxes electronically. Since that time, the system has been expanded to accept individual income and estimated tax payments. For information about the e-File & e-Pay System, visit our website at www.dor.ga.gov/busEfileEpay.aspx. You may also contact the Electronic Services Group at 404-417-4488, 1-888-6049875, or efile@dor.ga.gov for assistance. To access the e-File & e-Pay System, visit our website at https://gaefile.dor.ga.gov/ HelpLinks/welcome.htm.individual_tax_forms.aspx

WHERE’S MY REFUND?

You may check the status of your refund on-line at https:// www.dor.ga.gov/WMRefund/index.aspx. You may also check the status of your refund by calling 404-656-6286 if you live within the metro-Atlanta area, 1-800-338-2389 if you live in Georgia but outside of the metro-Atlanta dialing area, or 1877- 602-8477 if you live outside Georgia.

Before making an inquiry, please allow:

  • 2 weeks for returns filed electronically.
  • 7 weeks for paper returns filed prior to April 1st.
  • 10 weeks for paper returns filed after April 1st.

Note: A claim for refund must be made within three (3) years from the later of the date the tax was paid or the due date of the return, including extensions. For tax years prior to 2003, a claim for refund must be made within 3 years from the date taxes were paid.

REQUESTING AN EXTENSION

You have an automatic six-month extension to file your Georgia return when you receive an extension to file your Federal return. The Georgia return must be filed along with a copy of Federal Form 4868 or the IRS confirmation letter on or before the extended Federal due date. If you do not need a Federal extension, you may use Georgia Form IT 303 to request an extension to file your Georgia return.

An extension to file does not extend the date for paying the tax. Tax must be paid with Form IT 560 by the statutory due date to avoid late payment penalty and interest. The amount paid should be entered on Form 500, Line 20.

TAX TIPS

  1. File Electronically.
  2. If you or your spouse are at least 62 years of age or totally and permanently disabled to such an extent that you are unable to perform any type of gainful employment, see the instructions for Line 9 on page 9 and page 11 for information about the retirement income exclusion.
  3. Write your social security number(s) and the tax year on all payments and correspondence.
  4. Include copies of all income statements (W-2, 1099, etc.) indicating Georgia income tax withheld. You are not required to submit 1099 forms with your Georgia return unless Georgia income tax was withheld.
  5. Mail your return, payment and all necessary documentation to the appropriate address listed on the return. Sending your return via certified mail or courier will not speed processing of your return and will delay your refund.
  6. For faster, more accurate posting of your payment, use a payment voucher with a valid scanline from the Department of Revenue’s website at www.dor.ga.gov/inctax/ individual_income_tax_forms.aspx.

FILING REQUIREMENTS

Full-year Residents

Full-year residents are taxed on all income, except tax exempt income, regardless of the source or where derived. You are required to file a Georgia income tax return if:

  • You are required to file a Federal income tax return;
  • You have income subject to Georgia income tax that is not subject to Federal income tax;
  • Your income exceeds the standard deduction and personal exemptions as indicated below:

A. Single, Head of Household or Qualifying Widow(er)

  1. Under 65, not blind $ 5,000
  2. Under 65, and blind 6,300
  3. 65 or over, not blind 6,300
  4. 65 or over, and blind 7,600

B. Married filing Joint

  1. Both under 65, not blind $ 8,400
  2. One 65 or over, not blind 9,700
  3. Both under 65, both blind 11,000
  4. Both under 65, one blind 9,700
  5. Both 65 or over, not blind 11,000
  6. One 65 or over, and blind 11,000
  7. One 65 or over, and both blind 12,300
  8. Both 65 or over, and blind 13,600

C. Married filing Separate

  1. Under 65, not blind $ 4,200
  2. Under 65, and blind 5,500
  3. 65 or over, not blind 5,500
  4. 65 or over, and blind 6,800

These requirements apply as long as your legal residence is Georgia even if you are absent from or live outside the State temporarily. A credit for taxes paid to another state is allowed. See the worksheet on page 12 and the instructions for Line 17 on page 10 for more information.

Filing for Deceased Taxpayers

The surviving spouse, administrator, or executor may file a return on behalf of a taxpayer who dies during the taxable year. When filing, use the same filing status that was used on the Federal income tax return. The due date for filing is the same as for Federal purposes.

To have a refund check in the name of a deceased taxpayer reissued, mail Georgia Form 5347 and a copy of the death certificate along with the check to the address on the form.

Part-year Residents and Nonresidents

Instructions for part-year residents and nonresidents are available on pages 14 through 15.

Military Personnel

Residents. Military personnel whose home of record is Georgia or who are otherwise residents of Georgia are subject to Georgia income tax on all income regardless of the source or where earned, unless specifically exempt by Georgia law. Military personnel who serve outside of the continental U.S. may file their Georgia income tax return within six months after they come back to the continental U.S. No penalties or interest will accrue during this period. Members of the National Guard or Air National Guard who are on active duty for a period of more than 90 consecutive days are allowed a tax credit against their individual income tax. The credit cannot exceed the amount expended for qualified life insurance premiums or the taxpayer’s income tax liability and should be claimed on Form IND CR.

Nonresidents. Military personnel whose home of record is not Georgia and who are not otherwise residents of Georgia are only required to file a Georgia income tax return if they have earned income from Georgia sources other than military pay. If required, nonresident military personnel should file Georgia Form 500 and use Schedule 3 to calculate Georgia taxable income. (See pages 14-15 for instructions on completing Schedule 3.)

Combat Zone Pay. Effective tax year 2003, military income earned by a member of the National Guard or any reserve component of the armed services while stationed in a combat zone is not subject to Georgia income tax. The exclusion from income is only with respect to military income earned in the combat zone during the period covered by the soldier’s military orders. A copy of the Federal return must be enclosed with the Georgia return to claim this exclusion. The exclusion is limited to the amount included in Federal Adjusted Gross Income.

Taxpayers Required to File Form 1040NR

Taxpayers who are required to file Federal Form 1040NR must file Georgia Form 500. Similar to Federal income tax rules, most Georgia taxpayers are only allowed to deduct the applicable Georgia personal exemption and expenses reflected on Form 1040NR. Most taxpayers are not allowed to take the standard deduction and they are allowed only limited itemized deductions as shown on Form 1040NR, Schedule A.

Other State’s Tax Return

If you claim a credit for taxes paid to another state(s), you must include a copy of your return filed with that state along with your Georgia return. No credit for taxes paid to another state will be allowed unless the other state’s return is enclosed with the Georgia return.

Amended Returns

File Form 500X to correct information reported on Form 500. Do not use Form 500 to correct a previously filed return or Form 500X as an original return.

TAX-DEDUCTIBLE DONATIONS TO SPECIAL FUNDS

Georgia Wildlife Conservation Fund. Protects and preserves Georgia’s nongame wildlife, including bald eagles, sea turtles, and other animals that are not hunted, trapped or fished. Make a donation on your tax return, or mail your donation to the Georgia Department of Natural Resources, 116 Rum Creek Drive, Forsyth, GA 31029. For more information, visit www.georgiawildlife.com.

Georgia Fund for Children and Elderly. Provides programs for preschool children with special needs, as well as elderly services such as home-delivered meals and transportation to medical appointments. Make a donation on your tax return, or mail your donation to the Georgia Department of Human Resources, Two Peachtree Street NW, Room 27-295, Atlanta, GA 30303-3142. Call the Children Trust Fund at 404-206-6037 or Division of Aging Services at 404-657-5253 for more information.

Georgia Cancer Research Fund (Breast Cancer, Prostate Cancer, and Ovarian Cancer). Funds innovative and promising research on breast, prostate, and ovarian cancer. Make a donation on your tax return, or mail your donation to the Georgia Department of Human Resources, Two Peachtree Street NW, Room 27-240, Atlanta, GA 30303-3142. Mobilizing Georgia. Immobilizing Cancer. For more information, visit www.georgiacancer.org.

Statewide Land Conservation Program. Provides funds for land conservation to protect natural resources and increase the State’s economic competitiveness. Make a donation on your tax return, or mail your donation to the Georgia Environmental Facilities Authority, 233 Peachtree Street NE, Suite 900, Atlanta, GA 30303. For more information, visit www.glcp.ga.gov.

Georgia National Guard Foundation Inc. Supports members of the Georgia National Guard and their families. Make a donation on your tax return, or mail your donation to the Georgia National Guard Foundation, 935 East Confederate Ave, S.E., Bldg 21, Atlanta, GA 30316-0965. For more information, contact the Foundation at 678-569-6420 or visit www.gahro.com/ga_guard_foundation.htm.

Dog and Cat Sterilization Fund. Provides financial support for the sterilization of dogs and cats, as well as education to the public about the benefits of animal sterilization. Make a donation on your tax return, or mail your donation to the DCSF, P.O. Box 347043, Atlanta, GA 30334-7043. For more information, visit www.agr.state.ga.us.

Saving the Cure Fund. This fund is designed to encourage the donation, collection, and storage of stem cells collected from postnatal tissue and fluid and to make such stem cells available for medical research and treatment; to promote principled and ethical stem cell research; and to encourage stem cell research with immediate clinical and medical applications. For more information visit www.savingthecure.com.

Georgia Student Finance Fund. Provides Individual taxpayers the opportunity to contribute to low cost 1% student loan funds by either donating all or any part of a tax refund due or by contributing any amount over taxes owed by adding that amount to the taxpayer’s payment. These donations are tax deductible as charitable contributions for both Federal and State of Georgia Income tax purposes. Make a donation on your tax return or mail your donation to Georgia Student Finance Commission, 2082 East Exchange Place, Tucker, GA 30084. For more information visit www.gsfc.org.

FEDERAL TAX CHANGES

Georgia has adopted provisions of all federal tax acts (as they relate to the computation of Federal adjusted gross income) that were enacted on or after January 1, 2008, except for I.R.C. 168(k) (the 30% and 50% bonus depreciation rules). This exception does not apply to I.R.C. 168(k)(2)(A)(i), (the definition of qualified property), I.R.C. 168(k)(2)(D)(i), (exceptions to the definition of qualified property) and 168(k)(2)(E),(special rules for qualified property). Georgia has also not adopted I.R.C. Section 199 (deduction for income attributable to domestic production activities), I.R.C. Section 1400L (New York Liberty Zone Benefits), I.R.C. Section 1400N(d)(1) (post 8/28/2006 Gulf Opportunity Zone (GOZ) property, I.R.C. Section 1400N(j) (GOZ public utility casualty losses), and I.R.C. Section 1400N(k) (NOLs attributable to GOZ losses). For tax years beginning on or after January 1, 2008, Georgia has adopted the increased I.R.C Section 179 deduction and the related phase out that was enacted as part of the Small Business and Work Opportunity Act of 2007. As per current legislation, GA will not follow the increased Section 179 expensing per the Economic Stimulus Act of 2008 that was signed into law on February 13, 2008.

Federal deduction for income attributable to domestic production activities (I.R.C. Section 199). This should be entered on Form 500 Page 4 Schedule 1, Line 3.

Depreciation Differences. Depreciation differences due to certain Federal acts should be handled as follows. If the taxpayer has depreciation differences from more than one Federal act, it is not necessary to make a separate adjustment for each act.

  • Depreciation must be computed one way for Federal purposes and another way for Georgia purposes. To compute depreciation for Federal purposes, taxpayers should use the 2008 IRS Form 4562 and attach it to the Georgia return. This amount should be entered on Page 4, Schedule 1, Line 4 along with the words “ Deprec Adj”.
  • Depreciation must also be computed for Georgia purposes. Taxpayers should use Georgia Form 4562 to compute depreciation for Georgia purposes and attach it to the Georgia return. This amount should be entered on Page 4, Schedule 1, Line 10 along with the words “Deprec Adj”. Georgia Form 4562 and related instructions can be obtained from our website at www.dor.ga.gov or from any Revenue Office. Depreciation and other differences may also be reported to you by a partnership, S Corporation, limited liability company, or limited liability partnership that you own. Positive adjustments from these should be entered on Schedule 1, Line 4. Negative amounts should be entered as adjustments on Schedule 1, Line 10.

Additionally, the provisions listed above may have an indirect affect on the calculation of Georgia taxable income.

  1. When property for which different depreciation was claimed is sold, there will be a difference in the gain on such sale.
  2. The depreciation adjustment may be different if the taxpayer is subject to passive loss rules and is not able to claim the additional depreciation on the Federal return.
  3. Other Federal items computed based on adjusted gross income must be recomputed if provisions of the Federal acts are claimed, including itemized deductions, student loan interest deduction, self-employed health insurance deduction, etc.

Positive adjustments for these items should be entered on Schedule 1, Line 4. Negative amounts should be entered as adjustments on Schedule 1, Line 10.

GENERAL INFORMATION

Due Dates. Calendar year taxpayers are required to file on or before April 15, 2009. Fiscal year taxpayers must file on or before the 15th day of the fourth month after the close of their taxable year.

Mail your return and documents, including Form 525 TV if tax is due, to the address listed on the return. Do not staple documents to your return.

Address Changes. We do not have a change of address form. Call the Registration and Licensing Unit at 404-417-4490 to submit an address change. Also write the new address on your tax return and check the address change box.

Supporting Documents. We will request information to support the amounts listed on your Georgia income tax return and related schedules when necessary. However, you must enclose the indicated documentation with your Georgia return in the following situations:

  • The amount on Form 500, Line 8 is $40,000 or more, or less than the total income on your W-2(s) - submit a copy of Pages 1 and 2 of your Federal return.
  • You itemize deductions - submit a copy of Federal Form 1040 Schedule A.
  • You claim the Georgia child and dependent care expense credit - submit the appropriate Federal child care credit schedule.
  • You claim a credit for taxes paid to another state(s) - submit a copy of your return filed with the other state(s).

Special Program Code. This code is only used when designated by an announcement after the beginning of the tax year. Use of this code and the appropriate codes to be used will be announced to tax preparers as well as posted to the Georgia Department of Revenue website.

Installment Payments. You may request an installment payment agreement by submitting Form GA 9465. Approval of an installment request requires direct withdrawal of funds from your bank account. An installment agreement does not prevent the assessment of interest and penalty on any tax not paid by the statutory due date of the return.

For more information, contact the Installment Program Section at 404-417-6486 or via e-mail to ipa@dor.ga.gov.

Individual Retirement Accounts. The provisions concerning taxability and conversion from a traditional IRA to a Roth IRA are the same for Georgia as they are for the Internal Revenue Service.

Withholding on Lump-sump Distributions. For taxable years beginning on or after January 1, 2008, the payee of any non-periodic payment may elect to have withholding made on such non-periodic distributions from a pension, annuity, or similar fund. Such an election shall remain in effect until revoked by the payee.

Innocent Spouse Relief. In accordance with O.C.G.A. Section 48-7-86(g), individuals granted innocent spouse relief under Section 6015 of the Internal Revenue Code are eligible for relief from liability for tax, interest and penalty to the extent relief was granted by the Internal Revenue Service.

Income from Partnerships and S Corporations. All partners must pay Georgia income tax on their portion of the partnership’s net Georgia income. Nonresident shareholders must pay Georgia income tax on their portion of Georgia corporate income; resident shareholders must report their total S Corporation income. Distributions from earnings and profits accumulated prior to a corporation acquiring Georgia S Corporation status must be reported as dividends.

Low and Zero Emission Vehicle Credit. O.C.G.A. Section 48-7-40.16 provides a tax credit for the purchase of low and zero emission vehicles.

These credits do not extend to hybrid vehicles.Visit www.dor.ga.gov/inctax/info_taxcredits.aspx for more information.

Federal Audit. Whenever a Federal audit or other Federal adjustment results in a change in net income for any year, you are required to furnish under separate cover, within 180 days, a schedule reflecting all changes to the Taxpayer Services Division, Department of Revenue, P.O. Box 740380, Atlanta, Georgia 30374-0380. If you do not submit a return reflecting all changes and the Commissioner receives this information in a report from the United States Government, the Commissioner will issue an assessment for tax due within five years from the date the report is received from the United States Government.

A taxpayer who fails to notify the Commissioner within 180 days forfeits any Georgia refund as a result of an audit if the normal statute of limitations has expired. However, 90 percent of any overpayment can be applied to a balance due for another year that is a result of the same IRS audit.

As an alternative to withholding, an entity may file a composite return for its nonresident members. Form IT-CR may be downloaded and printed from the Departments website.

Consent Requirement for Nonresident Shareholders. For tax years beginning on or after January 1, 2008, nonresident shareholders of “S” Corporations will only need to file a single consent form in the year in which the ‘S’ Corporations is first required to file a Georgia income tax return. Form IT-CR may be downloaded and printed from the Departments website

Withholding on Nonresidents. Withholding is required on any distributions paid or distributions credited by Partnerships, Limited Liability Companies and S Corporations. Withholding should be reported on Form G 2A and entered on Form 500, Line 19. Include a copy of Form G 2A with your return.

Withholding is also required on the sale or transfer of real property and associated tangible personal property by nonresidents of Georgia. Tax withheld is reported on Form G 2RP and should be entered on Form 500, Line 19. Include a copy of Form G 2RP with your return.

TAXPAYER ASSISTANCE

For general income tax information, you may telephone Taxpayer Information Programs and Services (TIPS) at 404-417-4477 or 1-877-602-8477. Visite www.dor.ga.gov/esp/indivtax_esp.aspx para ver la versión española de este librete.

For most individual taxpayers, this instruction booklet is the only material needed to complete the 2008 Georgia income tax return. If you need additional information or assistance, call or visit one of the Revenue Offices.

DEPARTMENT OF REVENUE WEBSITE: www.dor.ga.gov

Visit our website to download tax forms, view a list of the mailing addresses for commonly used forms, and obtain answers to Frequently Asked Questions. You may also order forms by submitting an e-mail to taxforms@dor.ga.gov.

Senior citizens may call AARP Tax-Aide toll-free at 1-888-AARPNOW (1-888-227-7669) from February 1 to April 15 for assistance with filing both Federal and Georgia income tax forms.

If you have a disability and need additional assistance, please contact one of the Revenue Offices listed above.

TELEPHONE SERVICE FOR DEAF AND HARD OF HEARING PERSONS (TDD)

Deaf and hard of hearing taxpayers who have access to TDD equipment can call 404-417-4302 for assistance.

PROBLEM RESOLUTION

If you have an income tax problem, contact one of the regional offices listed above for assistance. For information concerning a notice or letter from the Department of Revenue, call the telephone number listed on the document. For additional assistance, contact the Taxpayer Services Division at 404-417-4480 or the Taxpayer Advocate’s Office at 404-417-2100 or via e-mail to taxadv@dor.ga.gov. For additional assistance with e-file contact 404-417-4488

FORM 500 INSTRUCTIONS

Include all completed schedules with your Georgia return.

Your Federal return contains information necessary for completing your Georgia return; therefore, you should complete your Federal return before starting your Georgia return. If you owe tax, mail your return and payment along with Payment Voucher 525 TV to the address on the return. Make your check or money order payable to Georgia Department of Revenue. Visit our website at www.dor.ga.gov for information about alternate payment methods.

Part-year residents and nonresidents must omit Lines 9 -14 and follow the Schedule 3 instructions that begin on page 14.

LINES 1 - 3

If your mailing label is correct, attach it to this area of the form and write your social security number(s) in the space provided. If the label is incorrect or you do not have a label, print or type your name(s), address (including apartment number if applicable) and social security number(s) in the spaces provided. Do not write a street address and post office box in the address field.

LINE 4

If you lived in Georgia the entire year, regardless of temporary living arrangements, enter 1 in the residency status box. If you lived in Georgia part of the year, enter 2 in the residency status box and list the dates you lived in Georgia. If you did not live in Georgia, enter 3 in the residency status box.

If one spouse is a resident and one is a part-year resident or nonresident, enter 3 in the residency status box and complete Schedule 3 to calculate Georgia taxable income.

LINE 5

Enter the letter appropriate for your filing status. You should use the same status that you use on your Federal return. However, if one spouse is a resident and the other is a nonresident without any Georgia-source income, your Georgia return may be filed jointly or separately with each spouse claiming the appropriate personal allowances and deductions. If your filing status is qualifying widow(er) on your Federal return, use filing status D on your Georgia return.

LINE 6a-c

Check box 6a for yourself and box 6b if you claim your spouse. Enter the number of boxes checked in box 6c.

LINES 7a&b

List the requested information about your dependents in the spaces provided. Include a schedule if you have more than three dependents. Write the total number of dependents on Line 7a. Do not include yourself or your spouse. Add Lines 6c and 7a; write the total on Line 7b.

LINE 8

Enter Federal adjusted gross income from Form 1040, 1040A or 1040EZ. Do not use Federal taxable income. If the amount is negative, fill in the circle next to the line number.

LINE 9

If you have income that is taxable by the Federal Government but not taxable to Georgia or vice versa, you must adjust your Federal adjusted gross income. You must document your adjustments on Schedule 1 and enter the total amount here. If the amount is negative, fill in the circle next to the line number.

The following adjustments may be ADDED:

  1. Interest received from non-Georgia municipal bonds and dividends received from mutual funds that derived income from non-Georgia municipal bonds.
  2. Loss carryovers from years when you were not subject to Georgia income tax.
  3. Lump sum distributions from employee benefit plans reported on IRS Form 4972.
  4. Depreciation because of differences in Georgia and Federal law during tax years 1981 through 1986.
  5. Adjustments due to Federal tax changes.
  6. Federal deduction for income attributable to domestic production activities under I.R.C. Section 199.
  7. Payments for more than $600 in a taxable year made to employees which are not authorized employees and which are not excepted by Code Section 48-7-21.1. An authorized employee is someone legally allowed to work in the United States.
  8. Portion of charitable contributions for which a qualified education expense credit was claimed.
  9. Taxable portion of withdrawals on the Georgia Higher Education Savings Plan.

The following adjustments may be SUBTRACTED:

  1. Retirement income. For tax year 2008, the maximum retirement income exclusion is $35,000 for taxpayers who are:
    • 62 years of age or older, or
    • permanently disabled to such an extent that they are unable to perform any type of gainful employment.

    The exclusion is available for the taxpayer and his/her spouse; however, each must qualify on a separate basis. If both spouses qualify, the maximum allowable exclusion on a joint return is $70,000. Income from property that is jointly owned should be allocated to each taxpayer at 50% of the total value. Up to $4,000 of the maximum allowable exclusion may be earned income. Use the worksheet on page 11 to calculate the exclusion and document the adjustment on Form 500, Schedule 1.

  2. Interest and dividends on U.S. Government bonds and other U.S. obligations. These must be reduced by direct and indirect interest expenses which are attributable to the income. Interest received from the Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Mortgage Corporation, and from repurchase agreements is taxable.
  3. Social security or railroad retirement paid by the Railroad Retirement Board included in Federal adjusted gross income.
  4. Salaries and wages reduced from Federal taxable income because of the Federal Jobs Tax Credit.
  5. Individual retirement account, Keogh, SEP and SUB-S plan withdrawals where tax has been paid to Georgia because of the difference between Georgia and Federal law for tax years 1981 through 1986.
  6. Depreciation because of differences in Georgia and Federal law during tax years 1981 through 1986.
  7. Dependent’s unearned income included in parents’ Federal adjusted gross income.
  8. Income tax refunds from states other than Georgia included in Federal adjusted gross income. Do not subtract Georgia income tax refunds.
  9. Income from any fund, program or system which is exempted by Federal law or treaty.
  10. Adjustment to Federal adjusted gross income for Georgia resident shareholders for Subchapter S income where the Sub S election is not recognized by Georgia or another state in order to avoid double taxation. This adjustment is only allowed for the portion of income on which the tax was actually paid by the corporation to another state(s). In cases where the Sub S election is recognized by another state(s) the income should not be subtracted. Credit for taxes paid to other states may apply.
  11. Adjustment for teachers retired from the Teacher’s Retirement System of Georgia for contributions paid between July 1, 1987 and December 31, 1989 that were reported to and taxed by Georgia.
  12. Amount claimed by employers in food and beverage establishments who took a credit instead of a deduction on the Federal return for FICA tax paid on employee cash tips.
  13. An adjustment of 10% of qualified payments to minority subcontractors or $100,000, whichever is less, per taxable year by individuals, corporations or partnerships that are party to state contracts. For more information call the Department of Administrative Services at 404-656-6315 or visit their website: http://ssl.doas.state.ga.us/VendorDB/ mainframe.jsp.
  14. Deductible portion of contributions to the Georgia Higher Education Savings Plan. The deduction is limited on a return to the amount contributed but cannot exceed $2,000 per beneficiary.
  15. Adjustments due to Federal tax changes. (See page 6 for information.)
  16. Combat zone pay exclusion.
  17. Up to $10,000 of unreimbursed travel expenses, lodging expenses and lost wages incurred as a direct result of a taxpayer’s donation of all or part of a kidney, liver, pancreas, intestine, lung or bone marrow during the taxable year.
  18. Adjustments to Federal adjusted gross income for Georgia resident partners in a partnership or member(s) in a LLC where such entities income has been taxed at the entity level by another state. Adjustment is only allowed for the portion of income on which the tax was actually paid.

LINE 10

Georgia adjusted gross income (net total of Line 8 and Line 9). If the amount is negative, fill in the circle next to the line number.

LINES 11a-c

Enter the standard deduction that corresponds to your marital status as indicated below and any additional deductions on Lines 11a and 11b. Enter the total standard deduction on Line 11c. If you use the standard deduction on your Federal return, you must use the Georgia standard deduction on your Georgia return. The additional deduction applies if you and/or your spouse are age 65 or over and/or blind.

Leave Lines 12a-c blank if you use the standard deduction.

Single/Head of Household: $2,300
Married Filing Separate: $1,500
Additional Deduction: $1,300
Married Filing Joint: $3,000

LINES 12a-c

Enter itemized deductions from Federal Schedule A on Line 12a; enter adjustments for income taxes other than Georgia and investment interest expense for the production of income exempt from Georgia tax on Line 12b. Subtract Line 12b from Line 12a; enter the total on Line 12c.

Leave Lines 11a-c blank if you itemize deductions.

When Federal itemized deductions are reduced because of high income, the reduced amount should be used as the starting point to compute Georgia itemized deductions.

If you itemize deductions on your Federal return, or if you are married filing separate and your spouse itemizes deductions, you must itemize deductions on your Georgia return. Include a copy of Federal Schedule A with your Georgia return.

LINE 13

Subtract Line 11c or 12c from Line 10. If the amount is negative, fill in the circle next to the Line number.

LINES 14a-c

Multiply the number on Line 6c by $2,700; enter the total on Line 14a. Multiply the number on Line 7a by $3,000; enter the total on Line 14b. Add the amounts on Lines 14a and 14b; enter the total on Line 14c.

LINE 15

Subtract Line 14c from Line 13 to determine your Georgia taxable income. If this amount is negative, fill in the circle next to the line number.

LINE 16

Use the amount on Line 15 and the tax tables on pages 17 through 19 to determine your tax liability.

LINE 17

If you paid tax to more than one state, use the total of the other state’s income and the worksheet on page 12 to calculate the Other State’s Tax Credit. You must complete Schedule 2 and include a copy of the return filed with the other state(s) with your Georgia return or the credit will not be allowed.

LINE 18

Subtract Line 17 from Line 16. If zero or less, enter zero.

LINE 19

Enter Georgia income tax withheld from all W-2s, 1099s or other income statements. Mail a copy of these statements with your return or this amount will not be allowed.

LINE 20

Enter estimated tax payments, including amounts credited from a previous return, and any payments made with Form IT 560.

LINES 21a-c

If you qualify, use the worksheet on page 11 to calculate the low income credit.

LINE 23

Enter the total of Lines 19, 20 and 21c.

LINE 24

If Line 18 is more than Line 23, subtract Line 23 from Line 18 to calculate the balance due.

LINE 25

If Line 23 is more than Line 18, subtract Line 18 from Line 23 to calculate your overpayment.

LINE 26

Enter the amount you want credited to estimated tax.

LINES 27 - 34

Enter donation amount (not less than $1).

LINE 35

Enter estimated tax penalty from Form 500 UET.

LINE 36

Add Lines 24 and 27 through 35 and enter the total amount due. Mail your return and payment along with Form 525 TV (see page 16) to the address on Form 500.

LINE 37

Subtract the sum of Lines 26 through 35 from Line 25

Married Filing Separate: $1,500 and enter the amount to be refunded to you.

Low Income Credit Worksheet

You may claim the low income credit if your Federal adjusted gross income is less than $20,000 and you are not claimed or eligible to be claimed as a dependent on another taxpayer’s Federal or Georgia income tax return. Full-year residents should claim the credit on Form 500, Line 21 or Form 500EZ, Line 6. Part-year residents may only claim the credit if they were residents at the end of the tax year. Taxpayers filing a separate return for a taxable year in which a joint return could have been filed can only claim the credit that would have been allowed had a joint return been filed. You cannot claim this credit if you are an inmate in a correctional facility.

1. Enter the amount from Form 500, Line 8 or Form 500EZ, Line 1. ___________
2. Enter total exemptions. Exemptions are self, spouse and natural or legally adopted children. ___________
3. Enter 1 if you or your spouse is 65 or older; enter 2 if you and your spouse are 65 or older. ___________
4. Add Lines 2 and 3; enter on Form 500, Line 21a or Form 500EZ, Line 6a. ___________
5. Find the credit that corresponds to your income in the table below and enter on Form 500, Line 21b or Form 500EZ, Line 6b. ___________
6. Multiply Line 4 by Line 5; enter the total on Form 500, Line 21c or Form 500EZ, Line 6c. ___________
Credit Table: Federal Adjusted Gross Income Credit All claims for the low income credit, including
claims on amended returns, must be filed on
or before the end of the 12th month following
the close of the tax year for which the credit
may be claimed.
Under $6,000 $26
$6,000 but not more than $7,999 $20
$8,000 but not more than $9,999 $14
$10,000 but not more than $14,999 $ 8
$15,000 but not more than $19,999 $ 5

RETIREMENT INCOME EXCLUSION WORKSHEET (Keep for your records)

  TAXPAYER SPOUSE 
1. Salary and wages _________ _________
2. Other Earned Income(Losses) _________ _________
3. Total Earned Income _________ _________
4. Maximum Earned Income $4000 $4000
5. Smaller of Line 3 or 4; if zero or less, enter zero _________ _________
6. Interest Income _________ _________
7. Dividend Income _________ _________
8. Alimony _________ _________
9. Capital Gains(Losses) _________ _________
10. Other Income(Losses) _________ _________
11. Taxable IRA Distributions _________ _________
12. Taxable Pensions _________ _________
13. Rental, Royalty, Partnership, S Corp, etc. Income(Losses) _________ _________
14. Total of Lines 6 through 13; if zero or less, enter zero _________ _________
15. Add Lines 5 and 14 _________ _________
16. Maximum Allowable Exclusion for Tax Year 2008 $4,000 $4,000 $35,000 $35,000 _________ _________
17. Smaller of Lines 15 and 16; enter here and on Form 500, Schedule 1, Lines 6 A & B _________ _________

Social security and railroad retirement paid by the Railroad Retirement Board, exempt interest, or other income that is not taxable to Georgia should not be included in the retirement income exclusion calculation. Income or losses should be allocated to the person who owns the item. If any item is held jointly, the income or loss should be allocated to each taxpayer at 50%.

Part-year residents and nonresidents must calculate the retirement exclusion as if they were full-year residents, then prorate the exclusion. It should be prorated using the ratio of Georgia source income before the retirement income exclusion (Form 500, Schedule 3, Line 8, Column C computed without the retirement exclusion) to the Georgia adjusted gross income before the retirement income exclusion (Form 500, Schedule 3, Line 8, Column A, computed without the retirement exclusion).

TAX CREDITS

The following Pass-Through Credits from Ownership of Sole Proprietorship or from the ownership of, S Corp, LLC, LLP or Partnership Interest will be reflected on the Individual’s K-1 and must be listed on Form 500, Schedule 2. The entity information and credit type code must be included. Additional documentation for claiming a credit is required where indicated.

NOTE: Credit code numbers are subject to change annually. Current code numbers are listed below. See Form IND CR for information about additional tax credits.

For additional information on the below-listed credits, please visit the Georgia Department of Revenue website at www.dor.ga.gov/inctax/taxcredits.aspx.

Code Name of Credit

101 Employer’s Credit for Basic Skills Education

102 Employer’s Credit for Approved Employee Retraining

103 Employer’s Jobs Tax Credit

104 Employer’s Credit for Purchasing Child Care Property

105 Employer’s Credit for Providing or Sponsoring Child Care for Employees

106 Manufacturer’s Investment Tax Credit

107 Optional Investment Tax Credit

108 Qualified Transportation Credit

109 Low Income Housing Credit (enclose Form IT-HC and K-1)

110 Diesel Particulate Emission Reduction Technology Equipment

111 Business Enterprise Vehicle Credit

112 Research Tax Credit

113 Headquarters Tax Credit

114 Port Activity Tax Credit

115 Bank Tax Credit

116 Low Emission Vehicle Credit (enclose DNR certification)

117 Zero Emission Vehicle Credit (enclose DNR certification)

118 New Manufacturing Facilities Job Credit

119 Electric Vehicle Charger Credit (enclose DNR certification)

120 New Manufacturing Facilities Property Credit

121 Historic Rehabilitation Credit (enclose Form IT-RHC and DNR certification)

122 Film Tax Credit

123 Teleworking Credit

124 Land Conservation Credit (enclose Form IT-CONSV and DNR certification)

125 Qualified Education Expense Credit (enclose Form IT-QEE-SS01 and Form IT-QEE-TP2)

126 Seed-Capital Fund Credit

127 Clean Energy Property Credit (enclose Form IT-CEP)

128 Wood Residual Credit

INSTRUCTIONS FOR PART-YEAR RESIDENTS AND NONRESIDENTS

Part-year residents and nonresidents who work in Georgia or receive income from Georgia sources are required to file Georgia Form 500 and complete Schedule 3 to calculate Georgia taxable income. A married part-year resident or nonresident with income earned in Georgia whose spouse is a nonresident with no Georgia source income may file either a separate return claiming himself/herself only, or a joint return claiming total allowable deductions. If one spouse is a resident and one is a part-year resident or nonresident, enter 3 in the residency status box and complete Form 500, Schedule 3 to calculate Georgia taxable income.

Part-year Residents. If you are a legal resident of Georgia for only a portion of the tax year and are required to file a Federal

income tax return, you are required to file a Georgia income tax return. Part-year residents who claim a credit for taxes paid to another state must include a copy of the individual income tax return filed with that state(s) with a copy of their Georgia return. Otherwise the credit will not be allowed.

Nonresidents. Nonresidents who work in Georgia or receive income from Georgia sources and are required to file a Federal

return are required to file a Georgia income tax return. Legal residents of other states are not required to file a Georgia tax return if their only activity for financial gain or profit in Georgia consists of performing services for an employer as an employee where the wages for such services does not exceed the lesser of five percent of the income received in all places during the taxable year or $5,000.

Adjusted Gross Income. The percentage on Schedule 3, Line 9 is zero if Georgia adjusted gross income (AGI) is zero or negative. If the adjusted Federal AGI is zero or negative, the Line 9 percentage is 100%. The percentage is also considered to be 100% if both adjusted Federal and Georgia AGI are zero or negative. In this case, the taxpayer is entitled to the full exemption amount and deductions.

Instructions for Completing Schedule 3

(See example on pages 15)

LINES 1 - 4, Column A: list your Federal income.

LINES 1 - 4, Column B: list your income not taxable to Georgia.

LINES 1 - 4, Column C: list your Georgia taxable income.

LINE 5, Columns A, B, and C: enter the total of Lines 1- 4 in Columns A, B, and C respectively.

LINES 6 - 7, Column A: list adjustments from your federal return on Line 6; list adjustments allowed by Georgia law on Line 7.

See the Line 9 instructions on pages 9 and 10 for adjustments allowed by Georgia law.

LINES 6 - 7, Column B: list adjustments that do not apply to Georgia residency or do not apply because of taxable income earned as a nonresident.

LINES 6 - 7, Column C: list adjustments from the Federal return that apply to Georgia on Line 6; list Georgia adjustments on Line 7. See the Line 9 instructions on pages 9 and 10 for adjustments allowed by Georgia law.

LINES 8 A, B and C: add or subtract Lines 6 and 7 from Line 5 of each column. Enter the total for each column on Line 8 A, B, and C respectively.

LINE 9: divide Line 8, Column C by Line 8, Column A to calculate the ratio of Georgia income to total income.

LINE 10: if itemizing, enter the amount from Federal Schedule A reduced by income taxes paid to other states or expense for the production of non-Georgia income. Enclose a copy of Federal Schedule A with your Georgia income tax return. If using the standard deduction, enter the amount for your filing status as indicated below.

Single/Head of Household: $2,300
Married Filing Joint: $3,000
Married Filing Separate: $1,500
Additional Deduction: $1,300

LINES 11a-c: multiply Form 500, Line 6c by $2,700 and enter the total on Line 11a. Multiply Form 500, Line 7a by $3,000 and enter the total on Line 11b. Enter the total of Lines 11a plus 11b on Line 11c.

LINE 12: Add Lines 10 and 11c.

LINE 13: Multiply Line 12 by the percentage on Line 9.

LINE 14: Subtract Line 13 from Line 8, Column C. This is your Georgia taxable income. Enter here and on Form 500, Line 15. Use the income tax table on pages 17-19 to determine your tax and enter on Form 500, Line 16.

List states in which the income in Column B was earned and/or reported. Follow the instructions on page 10 to complete Lines 16 through 37 of Form 500. Enclose copies of applicable returns and schedules with your Georgia return.

COMMON MISTAKES THAT WILL DELAY YOUR REFUND

  1. Sending your return by certified mail. The postal service imposes special handling procedures for certified mail that could delay processing of your return.
  2. Not filling in the name, social security number(s), address, residency code, and/or filing status.
  3. Failing to list your spouse’s social security number when filing a separate return.
  4. Incorrectly listing or failing to list exemptions, dependents, income, and deductions.
  5. Failing to submit required schedules, statements, and supporting documentation, including W-2s, other states’ tax returns, or necessary federal returns and schedules.
  6. Entering information on a special funds line when a donation is not being made; including a check for a donation with a refund return.
  7. Not entering the amount owed or the refund amount. Do not enter amounts on both lines.
  8. Not verifying calculations, including the tax rate, or placing zeros on lines that are not being used.
  9. Incorrectly completing Schedule 3 or failing to include it with your return when required.
  10. Mailing your Georgia return to the wrong address.

REMINDERS

  • If the mailing label in this booklet is correct, place it on the form in the appropriate area. If the label is incorrect, or if you do not have a label, print or type your name(s) and current address (including apartment number) in the space provided. Be sure to check the box if your address has changed since your last return was filed.
  • Enclose copies of required returns, schedules and other documentation with your return. Failure to enclose proper documentation could delay your refund.
  • If you have an overpayment, indicate the amount to be refunded, credited to estimated tax and/or contributed to one of the special funds.
  • Mail Payment Voucher 525 TV with your return and payment to the address on Form 500 or 500EZ to ensure proper posting to your account. If you file electronically, mail the voucher and your payment to the address on the voucher.
  • Make your check or money order payable to the Georgia Department of Revenue. If you owe less than $1, you do not need to send a payment. If you are due a refund of less than $1, submit Form IT 550 to request a refund.
  • Do not staple your check, W-2s or any other documents to your return.

PENALTY AND INTEREST

Tax not paid by the statutory due date of the return is subject to 1 percent interest and 5 percent late filing and/or ½ of 1 percent late payment penalty per month, or fraction thereof. Interest accrues until the tax due has been paid in full; the combined total of late filing and late payment penalty cannot exceed 25 percent of the tax shown on the return. An extension of time for filing the return does not extend the date for making the payment. Additional penalties may apply as follows:

  • Frivolous Return Penalty - $1,000. (A frivolous return is one that contains incorrect or insufficient information to accurately compute the appropriate tax liability with the intent to delay or impede Georgia tax law or is based on a frivolous position.)
  • Negligent Underpayment Penalty - 5 percent of the underpaid amount.
  • Fraudulent Underpayment Penalty - 50 percent of the underpaid amount.
  • Failure to File Estimated Tax Penalty - 9 per year for the period of underpayment. Use Form 500 UET to calculate the penalty.

 

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