Georgia Income Tax on Estates & Trusts and Amended Definition of Taxable Nonresident

By Diane L. Mutolo

In Georgia, estates & trusts are subject to state income tax. In 2010, the state legislature amended the definition of taxable nonresident to include nonresidents who regularly engaged in certain financially profitable transactions or received deferred compensation or income from stock options in the state in a prior year.

Ga. Code Ann. § 48-7-20. 2 Ga. Code Ann. § 48-7-20(d) provides that the Georgia income tax "applies to the Georgia taxable net income of estates and trusts, which shall be computed in the same manner as in the case of a single individual." 3 Section 48-7-20(d) further provides that "[t]he tax shall be computed on the Georgia taxable net income and shall be paid by the fiduciary." 4

As explained in How to Save Time & Taxes Preparing Fiduciary Income Tax Returns, the Georgia income tax imposed upon fiduciaries is levied, collected, and paid annually with respect to that part of the net income of the estate or trust which has not become distributable during the taxable year; the taxable net income received during the taxable year by a deceased individual who at the time of death was a taxpayer and who died during the taxable year or subsequent to the taxable year without having made a return; and  the entire taxable net income of an insolvent or incompetent person, whether or not any portion of the taxable net income is held for the future use of the beneficiaries, when the fiduciary has complete charge of the net income. 7

This Emerging Issues Analysis discusses the Ga. income taxation of estates and trusts, and the amended definition of taxable nonresident.

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