Updated October 5, 2026. Quick answer: Yes. Georgia taxes trust income, with the 2025 tax figured at 5.19%, and the code states that it is “the purpose of this Code section to tax fiduciaries or beneficiaries” on all income otherwise taxable.
How Georgia treats trust income
| Item | What the documents say |
|---|---|
| Treatment | Georgia taxes the income of resident trusts and estates, and of some nonresident ones, under O.C.G.A. 48-7-22. The source says: “the purpose of this Code section to tax fiduciaries or beneficiaries” on all income otherwise taxable. |
| Who counts as a resident trust | The statute taxes fiduciaries by whether they are resident, and does not spell out a settlor, trustee or beneficiary test in the documents read. The source says: “Imposed upon resident fiduciaries and upon nonresident fiduciaries” who receive Georgia business income, manage Georgia property, or manage property for a Georgia resident. |
| Rate on trust income | Fiduciaries are taxed at the single-individual rates, and the 2025 instructions apply 5.19% to net taxable income. The source says: “Multiply the amount on Line 7c by 5.19%”. The statute ties the rate to single individuals. |
| Distribution deduction | The tax falls on the part of net income that has not become distributable, and Schedule 1 subtracts income distributable to beneficiaries. The source says: “Enter the total portion of income distributable to all beneficiaries”. The instructions do not use the term distributable net income. |
| Nonresident trusts | A nonresident fiduciary is taxed under O.C.G.A. 48-7-22 when it receives income from business done in Georgia, manages funds or property located in Georgia, or manages funds or property for the benefit of a Georgia resident, and the Department says a nonresident fiduciary in facts specifically like those in Kaestner is not subject to Georgia taxation. The source says: “Part year residents and nonresidents who receive income from Georgia sources” must file Form 501 and complete Schedule 4. |
| Return to file | A resident trust that must file a federal return files Georgia Form 501. The source says: “Resident estate or trust that is required to file a federal” income tax return, and a nonresident one files if it has Georgia source income. |
A $10,000 example
A trust with $10,000 of taxable income that it keeps, rather than distributes, is taxed at 5.19%, computed as $10,000 x 5.19% = $519, before any deduction or exemption the state allows. Federal tax on the trust’s income still applies.
Income the trust passes out to a beneficiary is handled as the distribution deduction row above describes.
What changes in 2026
The latest documents read print no 2026 change to how trust income is taxed.
Federal rules
The state’s treatment sits on top of the federal one. The federal brackets a trust faces are laid out in trust tax brackets versus individual brackets, and capital gains that a trust keeps are covered in capital gains stay in the trust. The IRS explains the federal return in the About Form 1041 page.
Related: how Georgia taxes retirement income, whether Georgia taxes pensions, what a living trust costs in Georgia, trust income tax by state, and federal trust tax brackets.
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Answer againSources
- 2025 Fiduciary Instructions Booklet, Form 501 and 501X (Georgia Department of Revenue): https://dor.georgia.gov/document/document/2025-501-and-501x-fiduciary-income-tax-instruction-booklet/download
- Policy Bulletin IT-2019-02, Taxation of Nonresident Trust Fiduciaries (Georgia Department of Revenue): https://dor.georgia.gov/document/policy-bulletin/policy-bulletin-2019-02pdf/download
- Georgia Form 501 Fiduciary Income Tax Return, 2025 (Georgia Department of Revenue): https://apps.dor.ga.gov/FillableForms/webpdf/examples/2025GA501.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.