The Georgia HEART Hospital Program is helping rural and critical access hospitals take advantage of an exciting opportunity to increase their funding and their ability to provide for the health care needs of thousands of Georgians!
For many years, due to demographic, economic, and health care industry challenges, Georgia’s rural hospitals have been facing a financial crisis. This crisis jeopardizes the access of rural Georgians to adequate health care.
In response, in 2016, the Georgia General Assembly passed, and Governor Nathan Deal signed into law, Senate Bill (“SB”) 258, legislation that, effective January 1, 2017, awards Georgia income tax credits to individual and corporate taxpayers who contribute to qualified rural hospital organizations (“RHOs”) located in Georgia.
Participation in the Georgia HEART program is limited to Georgia rural hospitals that meet qualification criteria established in the law, including county population size (50,000 or less, excluding military personnel); tax-exempt status or public hospital authority management; acceptance of Medicare and Medicaid; and minimum annual provision of indigent or uncompensated care. In order to qualify, rural hospitals have to file a five-year plan with the Georgia Department of Community Health (“DCH”). Presently, the DCH has qualified 54 RHOs, 54 of which are participating in Georgia HEART. View a list of participating HEART hospitals.
From 2018 through 2022, Georgia taxpayers could access $60 million of RHO tax credits each year, with each qualified RHO having access to $4 million of tax credits (until the total annual $60 million cap is met).
On May 9, 2022, Governor Brian P. Kemp signed House Bill 1041, which increased the cap on RHO tax credits to $75 million annually, beginning in 2023. From 2023 through 2024, Georgia taxpayers can access $75 million of RHO tax credits each year, with each qualified RHO having access to $4 million of tax credits (until the total annual $75 million cap is met). During the first six months of each year, a qualified RHO may only accept $2 million of corporate contributions and $2 million of individual contributions.
On April 19, 2024, Governor Brian P. Kemp signed House Bill 1339, which includes in Section 11 the following amendments to O.C.G.A. § 48-7-29.20 – Tax credits for contributions to rural hospital organizations – effective January 1, 2025:
- Program is extended for five additional years – from original sunset date of 12/31/24 to 12/31/29.
- Annual aggregate amount of tax credits allowed is increased from $75 million to $100 million.
- Individual owner of a pass-through entity (member of a limited liability company duly formed under state law, a shareholder of a Subchapter ‘S’ corporation, or a partner in a partnership) is able to contribute up to $25,000 (increased from $10,000) in the first six months of the year. (Contributions from this taxpayer type are unlimited in the second half of the year, as always.)
- Payment deadlines for applicants are revised, as follows:
- A taxpayer preapproved by the DOR on or before September 30 shall make the contribution within 180 days after DOR preapproval, but not later than October 31.
- This means that applicants preapproved by April 30 will have 180 days to make payment.
- Applicants preapproved between May 1st and September 30th will have until October 31st to make payment.
- A taxpayer preapproved by the DOR after September 30 shall make the contribution on or before December 31.
- Applicants preapproved after September 30th will have until December 31st to make payment.
- A taxpayer preapproved by the DOR on or before September 30 shall make the contribution within 180 days after DOR preapproval, but not later than October 31.
Note that the revised payment deadlines should help ensure that all available tax credits are utilized, eliminating the instances in which non-payment of amounts due on the last day of the year go unfunded, without sufficient time to allocate them to other interested taxpayers.
Effective in 2022, there is a new benefit for pass-through businesses, allowing a SALT (state & local income tax) limit workaround, coupled with a more generous HEART tax credit opportunity during the first six months of the year, per Georgia HB 149. Pass-through businesses may elect to pay state income tax at the entity level and may contribute to eligible rural hospitals through the HEART program at the same generous limits as C Corporations.
From January 1 through June 30 of each taxable year, the following limits apply with respect to Georgia HEART RHO contributions:
- Individual Filer – up to $5,000
- Married Filing Separately – up to $5,000
- Married Filing Jointly – up to $10,000
- C Corporation, Trust, or Pass-Through Entity electing to pay tax at entity level – up to 75% of annual Georgia tax liability
- Individual Owner of S-Corp, LLC, or Partnership (Pass-Through Entity) NOT paying tax at entity level – up to $10,000
After June 30 of each year, for so long as a portion of the $75 million annual cap on RHO tax credits is available, to offset their Georgia income tax liability, individual taxpayers may make unlimited contributions to RHOs for a corresponding 100% Georgia income tax credit.
Credits are awarded on a first-come, first-served basis. Georgia HEART is accepting 2024 tax credit applications on its website.
Once the tax credit application is submitted, Georgia HEART takes care of the process on the taxpayer’s behalf, submitting the request to the DOR in the order in which it is received by HEART, notifying the taxpayer of their approval and payment deadline (180 days from approval date or 12/31/24, whichever comes first), and – once the payment is received – providing the taxpayer with the appropriate tax receipt for claiming the credit on his or her 2024 Georgia income tax return.
Refer to our Frequently Asked Questions section for more information on this tax credit opportunity.