Under a new law, during the next three years, taxpayers who contribute to Grady General may be eligible for a tax credit that offsets their Georgia income taxes. A participant in the Georgia HEART (“Helping Enhance Access to Rural Treatment”) program, Grady General has been allocated $4 million of the total $50 million of tax credits that will be available to individuals and corporations who contribute to qualifying rural hospitals throughout Georgia.
“The HEART tax credit allows donors who give to our hospital to receive a state income tax credit that exceeds the benefits of the usual charitable deduction,” said Crystal Ramm, Grady General Hospital administrator.
Rep. Geoff Duncan (R-Cumming) authored the original version of the law, which ultimately passed during the 2015-2016 session of the Georgia General Assembly in the form of Senate Bill 258. The measure allows single taxpayers a tax credit for 70 percent of their contributions, up to maximum credit of $2,500 per year; married couples a tax credit for 70 percent of their contributions up to maximum credit of $5,000 per year; and corporations a tax credit equal to 70 percent of their contributions or 75 percent of their Georgia income tax liability, whichever is less. In addition, contributors who itemize their deductions will be able to take a charitable income tax deduction on their federal income tax returns.
The availability of the tax credit was designed to “bridge the gap” for rural hospitals, many of which face significant demographic, industry, and financial challenges. Under SB 258, the tax credit expires after 2019. The additional funding that the Georgia HEART tax credit stimulates will help rural hospitals meet some challenges pending a few longer-term solutions that are in the works.
Atlanta-based Portage Charity Advisors created the HEART program as a turnkey solution to help qualifying hospitals such as Grady General, navigate the contribution marketing, processing, tracking, and reporting requirements relating to the law. The Georgia HEART program is a collaboration among Portage, the Georgia Hospital Association (through its Georgia Hospital Health Services subsidiary), which is educating rural hospitals about the tax credit, and the Georgia Chamber of Commerce, which is educating potential corporate contributors.
Although the Georgia Department of Revenue (“DOR”) will not start approving tax credits for interested taxpayers until the first business day in 2017, 24 of the 49 eligible rural hospital organizations have already elected to participate in the HEART program.
Jim Kelly, Director of Georgia HEART, expects more hospitals to do so.
“These early participants are using our marketing and communications materials and strategies to contact and educate potential donors in their communities,” said Kelly. “Also, their donors will be able to contribute with confidence that the experienced Georgia HEART team will handle in a timely and competent manner all aspects of the contribution process, which must comply with applicable DOR rules.”
On December 1, the Georgia Department of Community Health will publish the final list of eligible rural hospitals that have qualified by submitting information about their financial condition and five-year plans describing how they will use the contributed funds to improve their financial sustainability. In anticipation of being included on the list, Grady General is planning a three-year HEART campaign and is encouraging potential donors to “get in line” at www.georgiaheart.org to have Georgia HEART submit their application to the DOR for tax credit pre-approval in January of next year.