Changes to Georgia Heart Tax Credit Spell Bigger Tax Savings

In 2017, Georgia business and individual taxpayers seeking to reduce their state income tax liability while contributing to a worthy cause should consider participation in the Georgia Heart Hospital Program. The program provides the opportunity for individuals and business owners to make a donation to a qualifying rural hospital in the state in exchange for a state tax credit. The program provides a way for finance-strapped hospitals in rural areas to get desperately needed funding while giving taxpayers an incentive to participate. In 2017, the state provided $60M in credits that taxpayers could apply for and claim on their state tax return. Given the success of the program and continued need to fund rural hospitals, the taxpayer incentive for participation has increased significantly. For 2018 the incentives for participation have been significantly increased making this an appealing tax planning opportunity. To help clients, prospects and others become more familiar with the program and the opportunity, Wilson Lewis has provided a summary of key details below.

What is the Georgia Heart Hospital Program?

It’s a program designed to help fund qualifying rural hospitals to make needed infrastructure, technology and other enhancements to improve the type and quality of care provided to patients. To qualify for the program a hospital must be in a county with 50,000 or less people (excluding military members), have a tax-exempt status or under public hospital authority management, accept Medicare and Medicaid and have an annual provision of uncompensated care. In addition, to receive funding under the program hospitals must file a five-year plan with the Georgia Department of Community Health. There are currently 54 hospitals participating in the program. Click here to view a list of participating hospitals.

What is the Tax Benefit?

The tax benefit differs based on whether it’s an individual or business taxpayer. For example, a single or head of household taxpayer can earn a 100% Georgia tax credit for up to $5,000 in qualifying contributions. A married couple filing a joint return can earn a 100% Georgia tax credit for up to $10,000 in qualifying contributions. Finally, an individual who is a member of a LLC, shareholder in a S corporation or partner in a partnership (or other pass-through entity) can earn a 100% Georgia tax credit for up to $10,000 of qualifying contributions as long as they would have paid that amount in state income tax from the entity.

How did the Program Change?

As mentioned above there were changes to the program that provide additional incentives for taxpayers. The most meaningful includes an increase in the amount of the deduction from 90% to 100% in 2019. The program also allows owners of pass-through entities including partnerships, LLCs and S corporations to now qualify as eligible contributors. For individual taxpayers (after June 30^th) there will no longer be maximum credit limits to contributions and contributions can now be made using credits cards where previously this was not available.

What is the Application Process?

Remember that to qualify to claim the credit, a taxpayer must apply to and receive approval from the Georgia Department of Revenue (DOR). A process involving several steps must be followed to participate in the program. The initial step is to complete and apply to the program through the Georgia Heart Hospital Program website. Once the application is completed, the program will hold it and submit to DOR for review and approval on behalf of the taxpayer. The DOR will then review the application and inform taxpayers when they have been approved including the total amount of the credit. Information will be sent to the taxpayer on how and when to make their payment so the taxpayer can send in the payment and corresponding information. Once received, Georgia Heart Hospital Program will send a confirmation letter and the taxpayer has 30 days to report the contribution through the Georgia Tax Center website. The taxpayer can then claim the credit when filing their 2019 state incomes taxes.

Contact Us

The changes to this program will result in greater tax savings for Georgia taxpayers. Applications for 2019 will be accepted through the Program’s website starting on October 1, 2018. The increased benefits and tax saving opportunities mean there will be a greater number of applications. If you need assistance with application preparation or federal and state tax planning, Wilson Lewis can help! For additional information please call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.