Georgia’s unique and transformative Georgia HEART Program is sustaining to rural communities across the state. Georgia lawmakers created a way for businesses to be part of the solution to providing rural hospitals with the vital resources necessary to improve and ensure the delivery of essential medical services. The Georgia HEART tax credit empowers businesses to be part of the solution to this critical need – and with a likely double tax benefit!
Favorable state and federal tax laws and regulations allow C corporations, trusts, and pass-through businesses to achieve a state tax credit, a federal tax deduction, and a sustaining philanthropic impact on Georgia communities.
A C corporation or trust can take advantage of a Georgia HEART income tax credit for up to 75% of its annual tax liability. Additionally, when a C corporation or trust makes a payment to a charitable organization (like a qualified rural hospital), and receives a corresponding state income tax credit, the IRS recognizes it as an ordinary and necessary business payment, eligible for a federal deduction (IRS Rev. Proc. 2019-12).
For pass-through businesses, there are two opportunities to make a substantial impact through Georgia HEART.
1) Electing Pass-Through Method:
HEART tax credit is claimed at the entity level, under the name and FEIN of the pass-through business
| Tax Filing Status | Tax Credit Limit |
| Pass-through electing to pay tax at the entity level (HB 149) | 75% of annual tax liability All year long |
HB 149 allows Georgia pass-through businesses to elect to pay state income tax at the entity level, thereby enabling the pass-through owners to avoid the $10,000 SALT deduction limitation on their earnings from the business. For businesses making this election, they may contribute up to 75% of their state income tax liability to a qualified rural hospital through Georgia HEART.
This not only elevates the quality of rural healthcare but can result in significant cost savings for the business owners, resulting in savings which HEART’s CPA firm has calculated at up to $19,943 in an example with Georgia taxable income of $1 million. Importantly, these generous contribution limits are in effect during the first half of the calendar year.
2) Individual Pass-Through Owner Method:
HEART tax credit is claimed at the individual level, under the name(s) and SSN(s) of the pass-through business owner (and spouse, if applicable)
| Tax Filing Status | Tax Credit Limit |
| Pass-Through Owner (not making HB 149 election) | $10,000 – January through June and Unlimited beginning July 1 |
For businesses who do not elect to pay state income tax at the entity level, pass-through owners can receive a tax credit for up to $10,000 if they anticipate paying that much income tax as a result of their pass-through ownership, taking into account both profits (K-1 income) and wages (W-2 income) received from the business. Plus, these payments may be deductible for federal tax purposes if they constitute ordinary and necessary business expenses, resulting in potential federal tax savings.
Secure your credit by submitting the 2024 HEART tax credit application. Your request will be submitted to the Georgia DOR in the order in which it is received by Georgia HEART.
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