Georgia taxpayers have a unique way to contribute to local hospitals and receive a tax credit in the process.
The Georgia HEART Hospital Program, which came into effect Jan. 1, 2017, awards Georgia income tax credits to individual and corporate taxpayers who contribute to qualified rural hospital organizations in the state. (A link to qualified hospitals is here). In return, the taxpayer will receive a charitable contribution deduction on federal tax returns and a state credit on Georgia income tax returns.
There are limits to this credit. First, the Georgia Regional Hospital Organization tax credit is capped each year at $60 million, with each qualified hospital having access to $4 million of tax credits until the total annual cap of $60 million is met. Therefore, time is of the essence. To receive a tax credit for contributions, you must file for pre-approval with the Georgia Department of Revenue and, within 60 days of being approved, make your contribution.
For single taxpayers, the credit is limited to 90 percent of the amount contributed or $5,000 per tax year, whichever is less. This means if you want to get a credit of $5,000, you will need to contribute $5,556, as you will lose 10 percent of the contribution due to the 90 percent limitation. For married filing joint taxpayers, it is the same 90 percent of the contribution or $10,000, whichever is less.
C Corporations and trusts are also qualified for this credit, with a similar rule, lesser of 90 percent of contribution or 75 percent of your Georgia income tax liability.
This credit is similar to the Georgia GOAL scholarship and has similar tax rules. The credit on your Georgia tax return cannot exceed your Georgia tax liability; however, you can carry forward any used amount of credit for up to five years.
Georgia HEART has designed an easy form to complete and return to them. They will handle submitting the tax credit form to the Georgia Department of Revenue, which handles the pre-approval process and will communicate directly with the taxpayer.
We will be happy to discuss your options with you if you are interested in learning more about this unique tax credit opportunity.