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Georgia HEART Program

Together, Let’s Expand Our HEART!

The HEART Program is a remarkable and brilliant opportunity provided to Georgians by our elected officials. We are the only state in the nation whose taxpayers can financially support our state’s rural hospitals – at no cost!

You can provide essential improvements to health care in our community by contributing to the SGMC Berrien Campus or SGMC Lanier Campus through the Georgia HEART program, in exchange for a 100% Georgia income tax credit.

Recent IRS regulations provide even more good news and positive impact for many participants in this program. For “C” corporations and some pass-through businesses, the contribution will constitute an ordinary and necessary business expense, which will provide a federal income tax benefit.

If you pay Georgia income taxes, you are eligible to receive a 100% state income tax credit for contributing to SGMC Berrien or Lanier campuses, as follows:

  • From January 1 through June 30 of each taxable year, taxpayers are eligible to contribute up to $5,000 for individuals, $10,000 for married couples, and $10,000 for pass-through owners.
  • On July 1 of each year, limits for individual and married filing joint taxpayers (including pass-through owners) are waived. This means you can contribute as much as you would like, and you may take the credit against your overall Georgia income tax liability in the current year, or you may carry it forward for up to five future years.
  • At any time during the year, a “C” Corporation or trust shall be allowed a 100% Georgia income tax credit for contributions to RHOs equal to the amount of the contribution, or 75% of the corporation or trust’s income tax liability, whichever is less.

Follow these easy steps to sign up to contribute for your 100% tax credit:

  • Complete and submit your 2021 HEART Tax Credit Form at www.georgiaheart.org (takes just 20 seconds!)
  • Georgia HEART will submit your tax credit pre-approval form on your behalf to the Georgia Department of Revenue (DOR) in the order in which it is received
  • Within 180 days of receiving DOR tax credit pre-approval, or by December 31, 2020, whichever comes first, send a check made payable to SGMC Lanier Campus or SGMC Berrien Campus to Georgia HEART for deposit to the hospital’s account
  • Georgia HEART will report your contribution to the DOR on your behalf and will send you a tax receipt
  • You will claim the credit when you file your 2021 Georgia income tax return

Your contribution will increase our hospital funding and our ability to provide for the health care of individuals in our community at this critical time!

For more information about the Georgia HEART rural hospital tax credit program, please visit www.georgiaheart.org or contact the Georgia HEART team at heart@georgiaheart.org.

Here is an example: A married couple, with a total 2021 Georgia income tax liability of $8,000 pays $6,000 to HEART during 2021. 

  • They now owe only $2,000 in Georgia income taxes for 2021
  • Upon filing their 2021 Georgia income tax return,
    • If the couple had already paid the entire $8,000 to Georgia, they are eligible for a refund of the $6,000 paid to HEART
    • If the couple had not yet paid their Georgia income taxes, the $6,000 paid to HEART will count toward payment of what they owe, reducing their obligation to the State to $2,000

Individual Taxpayers: Any amount of the qualified rural hospital organization expense tax credit claimed but not used on the taxpayer’s Georgia income tax return for the year of their contribution shall be allowed to be carried forward to apply to the taxpayer’s succeeding five years’ tax liability. For example, a married filing joint couple contributed $10,000 in 2020 but only used $8,000 of the credit on their 2020 Georgia income tax return. The remaining $2,000 shall be allowed to be carried forward to apply to the taxpayer’s succeeding five years’ tax liability. 

Pass-Through Owners:

January 1 through June 30: If a taxpayer is approved for an amount that exceeds their calculated tax as a result of their pass-through ownership when their return is filed (i.e., all Georgia income, loss, and expense from the taxpayer selected pass-through entities multiplied by the Georgia marginal tax rate), the excess amount cannot be claimed by the taxpayer and cannot be carried forward. Any amount of the credit claimed but not used on the taxpayer’s Georgia income tax return shall be allowed to be carried forward to apply to the taxpayer’s succeeding five years’ tax liability.

July 1 through December 31: In the second half of the year, because limits for individuals are waived, limits for pass-through owners are no longer applicable. This means that a pass-through business can contribute an unlimited amount in the second half of the year, and the pass-through owner can take the credit against their overall income tax liability (rather than just the income tax resulting from their pass-through ownership). Additionally, as they are treated as an individual after July 1st, the taxpayer may also carry forward all or a portion of their tax credit for up to five years. 

“C” Corporations: If the taxpayer is approved for an amount that exceeds 75% of their actual Georgia income tax liability for the year, the excess cannot be claimed by taxpayer and cannot be carried forward. Any amount of the credit claimed but not used on the taxpayers Georgia income tax return shall be allowed to be carried forward to apply to the taxpayer’s succeeding five years’ tax liability.

Your Georgia income tax liability is the amount of income tax you must pay to the state for the entire year. It has nothing to do with how much you happen to owe at the end of the year; rather it is your total Georgia income tax calculated for the year. See line 16 from your prior year Georgia income tax return for your prior year Georgia income tax liability.

If you pay Georgia income taxes, you are eligible to receive a 100% state income tax credit for contributing to an eligible rural hospital, per the following limits:

Individual Taxpayers: IRS Regulations, finalized in August 2020, make it clear that taxpayers will experience NO cost or financial advantage for contributing to state income tax programs, like Georgia HEART. Their contribution will simply be a “wash” for federal income tax purposes. 

“C” Corporations and Pass-Through entities may be able to take an “ordinary and necessary business expense” on their federal tax return.

When a “C” Corporation makes a payment to a charitable organization, and receives a corresponding state income tax credit, the IRS will treat the business as making an ordinary and necessary business payment for which it can take a federal deduction. IRS Rev. Proc. 2019-12.

In cases where a pass-through business entity (i.e., a limited liability company, partnership, or “S” corporation) does not pay state income taxes, under certain “facts and circumstances,” the business may be able to take a federal deduction for “ordinary and necessary” business payments made to a charitable organization. Under IRC § 162, businesses are able to deduct business payments that bear a direct relationship to the taxpayer’s trade or business and are made with a reasonable expectation of financial return commensurate with the amount of the transfer. Treas. Reg. § 1.170A-1(c)(5). The amount of the business expense deduction reduces the net income on which the owners of the business are taxed. The pass-through business entity seeking to claim a business expense deduction should contemporaneously document the business and financial rationale for making such payments. If, by making a payment to a rural hospital organization, the business expects to build brand awareness, increase customer or client loyalty, earn community goodwill, develop more business, and/or retain and recruit employees, the business should estimate and document the value of those expected outcomes. In addition to benefiting from the federal business expense deduction taken by the business, as a result of recently adopted Georgia Department of Revenue (DOR) Rule 560-7-8-.57, the owner of a pass-through business can claim a Rural Hospital Tax Credit corresponding to his or her percentage ownership share of the payment the business makes to the Rural Hospital.

Participation in the 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 must file a five-year plan with the Georgia Department of Community Health (DCH). Each year, DCH publishes on its website a list of the qualified rural hospitals, listed by financial need.

Yes. You just fill out multiple applications and make separate payments to your chosen hospitals, once approved.

Yes. The Georgia DOR requires taxpayers to file their Georgia income tax returns electronically in order to claim the Rural Hospital Tax Credit. You may not claim this credit by filing your Georgia Form 500 on paper.

Yes. Each separate Georgia tax credit has its own tax credit limitations and its own carryover provisions. However, there are no required ordering rules among credits, as the taxpayer designates on the Georgia tax return which credits are utilized in the current year and which credits are carried forward.