Work in Tennessee, Live in Georgia: How Taxes Work

Reciprocity

Do Tennessee and Georgia Have a Tax Reciprocity Agreement?

No formal reciprocity agreement exists between Tennessee and Georgia, and none is needed. Reciprocity agreements matter only when both states impose a personal income tax on wages. Tennessee does not tax wages at all, so there is nothing for Georgia to negotiate against.

Tennessee does not have a general income tax. Its Hall tax was levied only on investment income, such as dividends from stocks and interest on bonds, and the 2017 IMPROVE Act phased it out so that it was completely repealed beginning January 1, 2021, according to the Tennessee Comptroller. Federal payroll taxes (Social Security and Medicare) still apply, but no Tennessee state income tax is withheld from your paycheck.

Georgia taxes its residents on all income from all sources, including wages earned in another state. The result for a Chattanooga-area or North Georgia commuter is straightforward: Tennessee takes nothing on your wages, and Georgia taxes the full amount on your Georgia resident return.

The structure mirrors other Tennessee border crossings, such as the Tennessee to Mississippi commute, where the home state collects all state income tax and Tennessee's side is zero. You can review the full list on the state reciprocity agreements page.

Filing Obligations

Which Tax Return Do I File as a Georgia Resident Working in Tennessee?

File Georgia Form 500, the Individual Income Tax Return, and include your Tennessee wages in the total. Georgia residents report income from all sources regardless of where the income was earned. Your Tennessee W-2 wages flow through Georgia adjusted gross income the same as any Georgia-source earnings.

You do not file a Tennessee individual income tax return, because Tennessee does not levy one. There is no Tennessee nonresident return, no Tennessee resident return, and no Tennessee withholding to reconcile at the state level.

For tax year 2025, Georgia taxes income at a flat rate of 5.19 percent. The standard deduction is $12,000 for single filers and $24,000 for married filing jointly. For tax year 2026, HB 463 cut the rate to 4.99 percent, retroactive to January 1, 2026, and raised the standard deduction to $15,000 for single filers and $30,000 for joint filers. The dependent deduction rose from $4,000 to $5,000.

Beginning with tax year 2025, Georgia discontinued Form 500-EZ. All individual income tax returns now use Form 500 regardless of filing complexity. The deadline to file 2025 Georgia returns without an extension is April 15, 2026.

Employer Withholding

Will My Tennessee Employer Withhold Georgia State Tax?

It should, according to Georgia. The 2026 Employer's Tax Guide says Georgia residents are subject to the withholding laws of the state where they work, and if that state does not require withholding, tax should be withheld and paid to Georgia. Tennessee does not require state income tax withholding, so the guide points to Georgia withholding. Whether Georgia can enforce that against a Tennessee employer with no Georgia presence is a separate question, and in practice some employers only set it up when asked.

Ask your payroll department whether they can set up Georgia withholding. If they agree, provide them with a completed Georgia Form G-4, the Employee's Withholding Allowance Certificate. If they cannot withhold Georgia tax, you are responsible for paying Georgia tax directly through estimated payments.

Federal withholding, Social Security, and Medicare are handled by every U.S. employer regardless of state. Only the state tax layer is affected by the Tennessee employer location.

Check your first pay stub after any payroll change. If you see Tennessee state tax withheld, that is an error, since Tennessee has no personal wage income tax. Contact payroll, ask them to correct it, and save the corrected pay stub and updated W-2 for your records.

Estimated Payments

How Do I Avoid a Georgia Underpayment Penalty?

When your Tennessee employer does not withhold Georgia tax, you generally owe Georgia estimated tax payments in four installments during the year. The Georgia Department of Revenue provides Form 500-ES for estimated payments. Installments are due April 15, June 15, September 15, and January 15 of the following year.

Compute your expected Georgia tax for the year based on projected wages, subtract any withholding already being collected, then divide the remaining amount into four equal payments. Form 500-UET measures underpayment against the smaller of 100 percent of your prior-year Georgia tax or 70 percent of your current-year tax, and the penalty runs at 9 percent a year on the amount underpaid.

For most Tennessee commuters with a single Tennessee employer, Form 500-ES installments are the standard approach. Keep confirmation of each estimated payment and reconcile them on your Georgia Form 500 at filing time.

Credit for Other Taxes

Do I Get a Credit on My Georgia Return for Tennessee Taxes?

No, because there is no Tennessee income tax on wages to credit. Georgia's credit for taxes paid to another state applies only when a Georgia resident actually pays income tax to another state on income that Georgia also taxes. Since Tennessee levies no personal income tax on wages, the credit calculation does not apply to this scenario.

If you accidentally had Tennessee state tax withheld (which should not happen because Tennessee has no wage tax), you cannot claim a Georgia credit for it. Instead, contact your employer's payroll department to stop the incorrect withholding and recover the amount taken.

The other-state credit does apply in different cross-border situations, such as a Georgia resident working in Alabama or North Carolina, where those states tax wages. For a Tennessee commute, the calculation is simpler because the Tennessee side of the ledger is zero for wage income.

Worked Example: Georgia Resident Earning $70,000 in Tennessee

Single filer, all wages from a Tennessee employer, Georgia 2026 flat rate and standard deduction (HB 463, retroactive to January 1, 2026).

Remote Work

What If I Work from Home in Georgia for a Tennessee Employer?

Working from home in Georgia does not change your Georgia state tax outcome. Georgia already taxes all of your wages as a resident, whether you earn them in a Tennessee office or at your Georgia home. There is no additional Georgia tax from remote work, and Tennessee still has no wage tax to apply either way.

Where remote work can matter is nexus for your Tennessee employer. If a Tennessee employer has Georgia-based remote workers, the company may take on Georgia payroll tax registration and withholding responsibilities. That change is helpful for you because it removes the need for estimated payments. Employers sometimes handle this by registering in Georgia and withholding Georgia tax from your paycheck directly.

Tennessee does not apply a convenience-of-the-employer rule to nonresidents, since it has no personal wage income tax to enforce. Your Georgia liability tracks Georgia residency rules, not where the work is performed. The number of days worked in each state has no effect on your Georgia state tax total.

Mid-Year Move

What If I Moved Between Tennessee and Georgia During the Year?

If you moved from Tennessee to Georgia during the tax year, file Georgia Form 500 as a part-year resident. Complete Schedule 3 to calculate your Georgia taxable income. Report the wages earned during the months you were a Georgia resident. Wages earned while you still lived in Tennessee are not Georgia-source income for that period unless earned from a Georgia employer or at a Georgia work location.

If you moved from Georgia to Tennessee during the year, file the same Georgia Form 500 as a part-year resident. Report the wages earned while you were still a Georgia resident, and stop the Georgia calculation at your move date. Wages earned after the move are Tennessee-only income and face no state tax.

Document the move date with utility records, lease or closing documents, or your new driver's license issue date. Part-year residents may need to prorate the standard deduction to the resident period.

Local Taxes

Do Any Other Taxes Come Out of My Tennessee Paycheck?

Tennessee does not have a general income tax, so there is no Tennessee wage tax to reconcile. Your state income tax obligation is the Georgia calculation on Form 500.

Other deductions on a Tennessee paycheck are federal. Social Security is 6.2 percent for the employee and Medicare 1.45 percent, and employers also withhold the 0.9 percent Additional Medicare Tax on wages above $200,000 in a calendar year. These are handled through federal Form W-4 and are the same in both states.

If a payroll deduction on your Tennessee pay stub is unclear, ask payroll for the specific code. For a breakdown of common deduction codes, see our pay stub abbreviations guide.