Receive a 2018 Tax Credit Via a Charitable Donation

April 9, 2018

Georgia HEART Hospital Program Helps Rural Hospitals While It Reduces Your Tax Obligation

As we’ve discussed before, the Tax Cuts and Jobs Act will limit the dollar amount you can deduct for state and local income taxes (SALT), combined with property taxes, to $10,000 starting with the 2018 tax year.

Thanks to the state of Georgia, though, you may be eligible to reduce your tax obligation while donating to a worthy cause at the same time. The Georgia Department of Community Health passed legislation in 2016 that gives individual and corporate taxpayers Georgia income tax credits for donating to rural and critical access hospitals in the state.

It’s called the Georgia HEART Hospital Program. The state has allocated $60 million for tax credits that will be converted from donations made by taxpayers to qualified Rural Hospital Organizations (RHOs) in the state of Georgia. Each RHO can receive up to $4 million in donations for 2018. You can see the list here.

Georgia HEART permits you to designate which RHO will be the recipient of your charitable contribution. If you’d like, you can divide it among multiple facilities, or you can let the Georgia Department of Community Health make the decision based on need.



In its last session on Thursday, March 29, Georgia state lawmakers passed changes to this legislation as originally written. It’s expected that Governor Nathan Deal will sign the bill. If it becomes law, you can expect to see the new modifications—included here in italics next to the original bill’s limits—incorporated.

Some Limitations

As you probably know, tax credits are often preferable to straight deductions, as they’re usually matched dollar for dollar. Since this is a very unusual local tax law, it has its own limitations on contributions:

  • Single individuals and heads of households can get tax credits equal to 90 percent (would increase to 100 percent) of their donations OR $5,000 per tax year (whichever is less).
  • Married couples filing joint returns can claim 90 percent (100 percent) OR up to $10,000 per tax year.
  • Pass-through entities, like S Corporations or LLCs, are subject to the same maximum amounts enforced for single or married filers. (Companies and individuals using these tax structures, “…specifically qualify as eligible contributors.”)
  • C Corporations or Trusts can apply for tax credits equal to 90 percent (100 percent) of their contributions OR 75 percent of their Georgia income tax liability (whichever is less).

If you want to receive a tax credit for the full $10,000 authorized by the Tax Cuts and Jobs Act, you would have to donate more. Married-filing-joint taxpayers, for example, would have to contribute $11,111. (The Department of Revenue may grant an additional $1,111 credit to married couples who have already contributed the extra money IF the $60 million cap hasn’t been met by June 30. Until the DOR provides more information, married taxpayers are advised to contribute no more than $10,000 to an RHO; they can then add more after June 30 if their tax situation warrants it.)

Two More Possible Changes

If the revised bill becomes law, there will be no maximum credit limits for non-corporate contributions to RHOs after June 30 every year through 2021 (the year the Georgia HEART program is set to expire). Also, taxpayers who already applied for a 90 percent credit through the program (and funded it) may be granted a 100 percent credit by the DOR.

How to Apply

It’s only April, but if you’re interested in reducing your 2018 tax obligation by applying for this credit, you need to get started soon. After completing the application form online, George HEART will submit it to the Georgia Department of Revenue, which has 30 days to approve it. You must then fund your donation within 60 days.

That’s the easy part. You still need to understand the steps necessary to claim this donation on your 2018 taxes, and it’s tricky because of the relationship between the SALT deduction and the Georgia HEART credit. We can help you plan for it so your return will be in order next year. Year-round income tax strategizing is a good idea, anyway. Let us introduce you to the ways it can minimize your tax obligation.

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