February 17, 2021

2021 Georgia HEART Tax Credit Program

Rural hospitals face a number of challenges to delivering comprehensive patient care. The combination of demographic, economic, and industry issues has left facilities facing financial difficulties. The COVID-19 pandemic has intensified the problem because there are now far more individuals needing care than capacity permits. This has left many searching for additional income to deliver desperately needed healthcare. To help generate the funding needed to expand services and facilities, the state created the  Georgia HEART Program. It awards state income tax credits to individuals and businesses that contribute to one of the 56 qualified rural hospital organizations (RHOs). In order to receive the benefit, taxpayers must apply and receive approval from the Georgia Department of Revenue. For those interested in participating, applications are currently being accepted for 2021. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.

Hospital Participation

Only certain rural hospitals are eligible to participate in the program and acceptance is based on a variety of factors. These include county population size (50,000 or less excluding military), status as a tax-exempt organization or under public hospital authority management, must accept Medicare or Medicaid, and meet a minimum annual provision of indigent or uncompensated care. In addition, there must be a five-year plan filed with the Georgia Department of Health.  

Tax Credit Details

For 2021, the state has allocated $60M tax credits available as part of the program. RHOs are only permitted to accept a total of $4M in program contributions, including $2M from individual donors and $2M from corporate donors, for the first six months of the year.

Below is an outline of the limits which apply.

• For single individual or head of household filers, a 100% Georgia income tax credit for contributions to RHO’s is available but is limited to $5,000.
• For married couples filing a joint return a 100% Georgia income tax credit is available but is limited to $10,000.
• An individual who is a member of a business including a Limited Liability Company (LLC), S-corporation, or partner in a partnership can claim a 100% Georgia income tax credit of up to $10,000.

After June 30^th, assuming tax credits are still available, an individual may make unlimited contributions and receive a 100% tax credit from the state. C-corporations or trusts will be allowed to participate at this time. They can receive a 100% state income tax credit for qualifying contributions, or 75% of state income tax liability, whichever is less.

It is important to note the credit amount can not exceed the taxpayer’s state income tax liability. In other words, it is not refundable. Any unused credit amount can be carried forward for a period of 5 years, but carrybacks are not permitted.

Application Process

Since the amount of the credit is limited, taxpayers must apply in advance to participate. Generally speaking, the application process includes the following steps:

• The taxpayer submits the 2021 HEART tax credit application.
• The HEART program reviews and then submits the application to the Georgia Department of Revenue (GDOR).
• Within 30 days, the GDOR informs the program of approval and the allowed contribution amount.
• Detailed information is sent to the taxpayer on how and where to send contributions.
• The taxpayer sends a check to the HEART program office (made payable to the selected hospital) within 180 days after the GDOR approves the application, or December 31, 2021, whichever comes first.
• The necessary forms are sent to the taxpayer to file.
• The contributions are confirmed with the DOR and the taxpayer can claim the 100% state tax credit when filing their annual state return.

Contact Us

The realities of the COVID-19 pandemic have pushed many rural hospitals to the limit increases the need for financial support. The HEART program is an opportunity to help others while reducing your own tax liability. Since applications are being accepted for 2021, interested parties are encouraged to apply immediately. If you have questions about the information outlined above or need assistance with a tax planning or compliance need, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.