For CPAs & Financial Advisors

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 businessses 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 pass-through businesses to achieve a state tax credit, a federal tax deduction, and a sustaining philanthropic impact on Georgia communities.

  1. Effective in 2022, pass-through businesses may elect to pay their state income taxes at the entity level, thereby enabling pass-through owners to avoid the $10,000 SALT deduction limitation on their earnings from the business. Pass-throughs electing this SALT Workaround method may contribute to HEART at the same generous limits as C corporations, with the payments deductible for federal tax purposes, resulting in savings which HEART’s CPA firm has calculated at up to $21,275 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. The original method of contributing as a pass-through owner remains in effect, where the limits are $10,000 during the first six months of the year, and unlimited as of July 1st. These payments may be deductible for federal tax purposes if they constitute ordinary and necessary business expenses.
     
    Pass-Through Tax Filing MethodTax Credit Limit
    Pass-through electing to pay tax at the entity level (HB 149) – SALT Workaround Method*75% of annual tax liability
    All year long
    Pass-through not making the HB 149 election – original pass-through tax credit opportunity$10,000 – January through June
     and Unlimited beginning July 1

*Significantly, making the HB 149 election may be the best chance of obtaining a sizable HEART tax credit given the program popularity and the pace at which tax credits are now being consumed.

See our one-pager entitled HEART of the Matter for Businesses for further detail. This SALT Workaround could mean that the entire $75 million cap for 2023 could be met very early in the year.

Reserve next year’s credit by submitting the 2023 HEART tax credit application. The request will be submitted to the Georgia DOR in the order in which it is received by HEART beginning on the first business day of January 2023. On July 1, contribution limits are removed. Georgia HEART will provide information on submitting applications for that timeframe in the spring of 2023, if there are tax credits remaining.

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