October 19, 2016

Georgia Rural Hospital Tax Credit

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Rural health care services are vital for the safety and wellbeing of so many in our country, and yet rural hospitals face unique obstacles that often keep them from thriving. Financial strain, and sometimes even bankruptcy, can come from the high numbers of individuals seeking care in rural settings, including many who cannot pay for healthcare services. Recent legislation aims to turn things around for rural Georgia hospitals and their patients while rewarding taxpayers for contributing to the struggling organizations from the Rural Hospital Tax Credit. To help clients, prospects and others understand how the credit works; Wilson Lewis has provided a brief summary below.

Tax Credit Details

Beginning in January of 2017, Georgia state tax credit will be awarded to those who contribute to the eligible list of rural hospitals or organizations as follows:

• Individual Georgia taxpayers can apply for a credit of either 70 percent of the amount of the contribution or $2,500, whichever is less
• Married couples filing jointly can receive a tax credit for the lesser of 70 percent of the contribution or $5,000
• For businesses or fiduciary taxpayers, the tax credit is either 70 percent of the contributed amount or 75 percent of their state income tax liability, whichever is less

The available credit is capped at $4 million per approved rural hospital and will be granted on a first come, first served basis. For 2017, $50 million has been set aside to fund the rural hospital tax credit, increasing to $60 million in 2018 and $70 million in 2019. The credit is set to expire at the end of 2019.

This tax credit will appeal to many individuals and businesses because contributions are also federally tax deductible. Interested taxpayers must submit an online form to the Georgia Tax Center prior to making a donation.

Eligible Organizations

So far, 49 hospital organizations have been deemed eligible for receipt of the tax-deductible donations for the 2017 tax year based on their applications that included a five-year plan stating how they intended to use the funds. The plans include strategies to address debt, including the financial strain of providing care to those who are uninsured or cannot pay, and other challenges to the hospital’s financial stability and viability.

For instance, rural hospitals may use the donations to purchase new or replace vital equipment that would enhance their efficiency and increase revenues, fund the construction of a new treatment center (e.g. a cancer or maternity center), conduct building renovations or improvements to their current structure to increase their ability to care for patients, fund recruitment needs for new doctors, nurses, administrators, and other medical staff, and more.

A final list of hospitals that will be eligible under the program will be released in December.

Contact Us

The Rural Hospital Tax Credit program will assist many rural health organizations in Georgia while offering a valuable tax credit to their supporters. If you would like assistance applying to become an eligible rural health organization or need assistance with other tax planning services, Wilson Lewis can help! For additional information on this or other Georgia tax credits, please call us at 770.476.1004 or click here to contact us.  We look forward to speaking with you soon!