Locum Tenens Taxes in Georgia

Nonresidents with Georgia-source income file the standard Form 500 and attach Schedule 3, which computes the ratio of Georgia income to total income and applies it to your deductions to get Georgia taxable income. Part-year residents use the same machinery for the portion of the year they lived elsewhere.

The 5% / $5,000 de minimis rule

Georgia has a de minimis exception physicians often hear about secondhand: a nonresident whose only Georgia activity is performing services as an employee doesn't need to file if the Georgia compensation is no more than the lesser of 5% of total compensation or $5,000. Read that carefully. It's employee compensation only, so 1099 independent-contractor income never qualifies. And $5,000 is a day or two of work at locum rates. In practice, the rule exempts almost no traveling physician; treat any paid Georgia assignment as a filing obligation.

Georgia sources personal-services income to where the services are physically performed. Shifts at Piedmont, Emory-affiliated facilities, Wellstar, or a critical-access hospital in south Georgia create Georgia-source income whether you're W-2 through an agency or 1099 through your own entity, and regardless of where the agency or entity is based.

For a multi-state year, allocate by assignment when your records allow it, or by working-day ratio when they don't. Georgia's Schedule 3 makes the ratio explicit on the face of the return, so sloppy allocation is visible to the Department of Revenue in a way it isn't in some states. A clean day log and per-contract income records make the Schedule 3 numbers defensible.

Georgia has no reciprocal agreements with any state, including its five neighbors. Whatever your employment form, Georgia-source income means a Georgia nonresident return. The double-tax relief runs through the ordinary credit system: if your home state has an income tax, it credits the Georgia tax on income both states tax, up to its own rate on that income.

The Southeast wrinkle is that two of Georgia's biggest feeder states for locums, Tennessee and Florida, have no income tax at all. For those residents there's no credit to claim and nothing to offset: Georgia's 4.99% is a straight cost of working south of the border. That's not a reason to skip Georgia assignments (the rates are often set accordingly), but it belongs in the day-rate comparison against in-state work.

W-2 agencies withhold Georgia tax from wages for Georgia work under normal payroll rules. Direct 1099 physicians handle their own quarterly estimates on Form 500-ES. So far, standard.

The distinctive piece is O.C.G.A. 48-7-129: partnerships, S-corps, and LLCs must withhold 4% of the Georgia-source taxable income distributed to nonresident members. If you're a Texas-domiciled physician running Georgia assignments through your own S-corp, your S-corp is legally the withholding agent on your own distributions. The withheld amounts are remitted to Georgia and claimed as a credit on your Form 500, so it's timing rather than extra tax, but the compliance obligation is real, penalties attach to the entity for ignoring it, and it surprises nearly every out-of-state S-corp owner the first year.

There are exemptions worth knowing: entities that make Georgia's pass-through entity tax election (Section 06) are not subject to the nonresident withholding, and composite-return arrangements can also satisfy the obligation. For a solo locum S-corp, the practical choice is usually between running the 4% withholding properly and making the PTET election that supersedes it.

Georgia municipalities and counties do not levy income taxes. There's no Atlanta city income tax, no county surcharge, no school-district tax. Whatever you compute on Form 500 is the whole income-tax bill for the state. Compare that to a Philadelphia or Cleveland assignment, where the city can take as much as (or more than) the state, and Georgia's all-in cost looks better than its headline rate suggests when stacked against local-tax states.

The standard locum S-corp math (self-employment tax savings versus payroll and compliance costs) works normally in Georgia. Two state-specific items belong in the model:

The net worth tax. Georgia imposes an annual net worth tax on corporations, including S-corps, doing business in the state, filed alongside the corporate return (Form 600S). It's graduated on the company's net worth and modest in size for a solo practice (small entities owe little, and the tax tops out at a few thousand dollars for very large balance sheets), but it's a real return and a real line item that out-of-state owners routinely miss in year one.

The PTET election. Georgia allows S-corps and partnerships to elect to pay tax at the entity level at the individual rate (4.99% for 2026). The entity deducts the state tax federally, the owner excludes the taxed income from Georgia tax at the individual level, and, as noted above, electing entities are exempt from the 4% nonresident withholding. With the federal SALT cap at $40,000 through 2026, the marginal federal benefit is thinner than it was under the $10,000 cap, so this is a model-it-first decision: for high earners with large combined state tax bills it still pays; for others the simplification benefit (replacing the withholding regime) may be the better argument.

Illustrative example, not a specific client outcome. A Florida-resident hospitalist works $100,000 of 1099 assignments in the Atlanta metro through her single-owner S-corp, and the rest of her year in Florida. Florida has no income tax, so there's no resident credit anywhere in this fact pattern.