How to Take Advantage of the New Georgia Rural Hospital Tax Credit

By Barbara Coats, CPA

October 24, 2017

*Applications are due November 1*

When the CEO of the National Rural Health Association refers to Georgia as “Ground Zero” for rural hospital closures, the situation is more than dire. According to a 2016 report on rural hospital strength, six rural hospitals in the state have closed their doors since the beginning of 2013. Two of those have been reopened as modified medical facilities, but no longer function as full-fledged hospitals. And more than half of the state’s remaining rural hospitals are vulnerable to closure.
 
As a response to the financial challenges faced by rural hospitals, Georgia Gov. Nathan Deal signed into law Senate Bill 258, also known as “The Georgia Rural Hospital Tax Credit Bill,” which allows individuals and corporations to receive tax credits for their monetary contributions to designated rural hospitals.
 
Effective Jan. 1, 2017, taxpayers who contribute to qualified rural hospital organizations (RHOs) located in Georgia are awarded a 90-percent tax credit. In addition, donors receive a federal charitable contribution deduction. This tax credit program is similar to the popular Georgia qualified education expense credit that many taxpayers have contributed to during the past several years.
 
Georgia has approved $60 million of RHO income tax credits in each of the years 2017, 2018 and 2019. The maximum annual credit available to an RHO donor is:
 
  • Single individual - $5,000
  • Married couple - $10,000
  • C-corporation – 75 percent of Georgia income tax
  • Trust – 75 percent of Georgia income tax
 
In addition to supporting a worthy cause, this program produces tax benefits. For an individual donor who pays alternative minimum tax (AMT), donations are likely to produce income tax benefits which are greater than the amount contributed. For individuals who do not pay AMT and for corporations, the income tax benefits are a bit less than the amount contributed.
 
For 2017, there are 49 hospitals which are qualified RHOs, of which 41 hospitals partner with the Georgia HEART Hospital Program for assistance with administration of the credit. (Georgia HEART is run by same people who operate the Georgia GOAL Scholarship program.) Those individuals or corporations interested in donating to a Georgia HEART RHO can visit the website for more information and to make a donation.
 
It’s important to remember that each taxpayer is unique. Windham Brannon will be offering a free WEBINAR at 2 p.m., on Monday, October 30, to discuss how you and/or your business can benefit from this tax credit, while also assisting struggling rural hospitals in Georgia. Register here
 
For immediate information about the tax benefits you will receive by donating to this program, contact Barbara Coats, tax principal for Windham Brannon, at bcoats@windhambrannon.com.