Updated October 19, 2026. Quick answer: On Georgia Form 500 Schedule 1, line 7 is the retirement income exclusion, and page 2 of Schedule 1 is the calculation behind it. The result from page 2 goes on line 7, the schedule’s net adjustments total goes to page 2 of Form 500, and the IT-511 booklet explains the age and disability limits.
What this form does
On Schedule 1, line 7 is headed “Retirement Income Exclusion” in the Subtractions part, and the booklet lists it first among subtractions: “The following adjustments may be SUBTRACTED:” Page 2 of the schedule is titled “RETIREMENT INCOME EXCLUSION”. See Georgia retirement taxes and whether Georgia taxes pensions for the state overview.
The instructions also say: “Please complete and include your Retirement” Income Exclusion calculation (Page 2 of Schedule 1) if you entered information on lines 7a, 7d, 7c, or 7f.
Who it applies to
The booklet states the exclusion by age: “The maximum retirement income exclusion is $35,000 for taxpayers who are:” The list under it includes taxpayers who are “less than 62 and permanently disabled to such an extent that they are unable to perform any type of gainful employment.” And: “The maximum retirement income exclusion is $65,000 for taxpayers who are 65 years of age or older.”
For spouses: “The exclusion is available for the taxpayer and their spouse; however, each must qualify on a separate basis.” “If both spouses qualify, each spouse may claim the amounts above.”
The booklet adds: “The date of birth is required for the Retirement Income Exclusion.” “If you are using the retirement income exclusion for disability, the date of disability is required.”
It also limits what counts: “Retirement income does not include income received directly or indirectly from lotteries, gambling, illegal sources, or similar income.” “Part-year and nonresident filers are required to prorate the amount of retirement exclusion.”
The lines, one by one
| Line | What the form says |
|---|---|
| Line 7 heading | “SUBTRACTION from INCOME” “(See IT-511 Tax Booklet)” |
| Line 7a (taxpayer) | “Complete Schedule 1, page 2.” |
| Line 7c (taxpayer) | Date of disability and type of disability boxes for the disability version of the exclusion |
| Line 7d (spouse) | “Complete Schedule 1, page 2.” |
| Line 7f (spouse) | Date of disability and type of disability boxes for the disability version of the exclusion |
| Page 2, line 1 | “Salary and wages” |
| Page 2, line 2 | “Other Earned Income (Losses)” |
| Page 2, line 3 | “Total Earned Income” |
| Page 2, line 4 | “Maximum Earned Income” |
| Page 2, line 5 | “The lesser of Line 3 or 4; if zero or less,” enter zero |
| Page 2, lines 6 to 13 | “Interest Income”, “Dividend Income”, Alimony, “Capital Gains (Losses)”, “Taxable IRA Distributions”, “Taxable Pensions” and “Rental, Royalty, Partnership, S Corp, etc.” |
| Page 2, line 14 | “Total of Lines 6 through 13; if zero or less,” enter zero |
| Page 2, line 15 | “Add Lines 5 and 14” |
| Page 2, line 16 | “Maximum Allowable Exclusion” |
| Page 2, line 17 | “The lesser of Lines 15 and 16; enter here and” |
The schedule’s page 2 footnote repeats the limits: “or if age 65 or older enter $65,000.” Where earned income is concerned the booklet says “Up to $5,000 of the maximum allowable exclusion may be earned income.”
The figures the form prints
All three figures below are in running sentences of the IT-511 booklet. The first is “The maximum retirement income exclusion is $35,000 for taxpayers who are:”. The second is “The maximum retirement income exclusion is $65,000 for taxpayers who are 65 years of age or older.”. The third is “Up to $5,000 of the maximum allowable exclusion may be earned income.”
Where the result goes next
Page 2 line 17 sends the answer to line 7: “The lesser of Lines 15 and 16; enter here and” “on Form 500, Schedule 1, Lines 7a & d for Retirement Exclusion or Lines 7c & f for Retirement Exclusion for Disability”. Schedule 1 itself then totals up: “Net Adjustments (Line 6 less Line 13).” The booklet says “Enter your total net adjustments here and on Line 9 of page 2 of Form 500.”
The payments behind the exclusion are reported federally on Form 1040 line 5a and 5b and Form 1040 line 4a and 4b, and the payer forms are covered in 1099-R boxes explained.
A worked example
The page 2 lines can be recomputed. This is an illustration, not a state example, with invented amounts for one taxpayer aged 65 or older.
Suppose salary and wages on line 1 are $3,000 so total earned income on line 3 is $3,000. Line 4 is the $5,000 earned income maximum so line 5 is the lesser of $3,000 or $5,000 which is $3,000. Suppose taxable pensions on line 12 are $40,000 and nothing else is on lines 6 to 13 so line 14 is $40,000. Line 15 is $3,000 plus $40,000 which is $43,000. Line 16 is $65,000 so line 17 is the lesser of $43,000 or $65,000 which is $43,000.
The amounts are invented for the computation; part-year residents and nonresidents prorate under the booklet’s rules.
Edition and line numbers
This page reads the 2025 IT-511 Georgia Individual Income Tax Forms and Instructions, with Form 500 Schedule 1 for tax year 2025, the current file Georgia Department of Revenue served on 2026-10-19. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Treating a joint return as one qualification. The booklet says “each must qualify on a separate basis.”
- Omitting the date of birth. The booklet says “The date of birth is required for the Retirement Income Exclusion.”
- Forgetting to prorate as a part-year or nonresident filer. The booklet says “Part-year and nonresident filers are required to prorate the amount of retirement exclusion.”
Related: Georgia retirement taxes, whether Georgia taxes pensions, Georgia 401(k) and IRA withdrawals, Form 1040 line 4a and 4b, and 1099-R boxes explained.
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Answer againSources
- 2025 IT-511 Georgia Individual Income Tax Forms and Instructions (with Form 500 Schedule 1), Georgia Department of Revenue: dor.georgia.gov
- Related official page (not quoted): Georgia Department of Revenue, Retirees FAQ: dor.georgia.gov
Read from the state revenue documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.