Federal business deduction and State tax credit available for local businesses

As of January 14, 2020, 553 Georgia taxpayers have applied for $6.7 million of the $60 million in Georgia HEART Hospital program credits available in 2020.

“Our participating rural hospitals are very excited about the continued financial support that citizens from throughout Georgia are providing to help enhance access to rural treatment,” says Lisa Kelly, President of Georgia HEART Hospital Program, LLC, which helps all 56 eligible hospitals, including Donalsonville Hospital, market and process taxpayer contributions.

Because the Internal Revenue Service has recently published proposed regulations confirming the favorable treatment of payments by businesses who financially support rural hospitals, the early 2020 enthusiasm for the Georgia HEART program is expected to continue.

“The IRS proposed regulations issued in December make it clear that businesses may take a federal income tax deduction for making payments to rural hospitals that are expected to build customer, client, or patient goodwill,” explained Kelly.

The availability of a both a federal and state income tax benefit makes it likely that the $60 million cap will be reached in 2020. Until June 30, the maximum amount of Georgia HEART credits for which a pass-through business owner may apply is $10,000. After June 30, there is no limit on the amount for which business owners may apply, up to the amount of the Georgia income tax liability associated with their interest in the business.

Donalsonville Hospital CFO James Moody is hopeful many of Donalsonville’s local business owners will take the opportunity to not only take the deduction and tax credit for their benefit but in doing so realize they are directly impacting their hometown hospital. 

“In 2019, Donalsonville Hospital raised close to $280,000 and had the financial support of local businesses like
PeoplesSouth Bank and Ameris Bank. We were able to purchase fetal monitoring technology, upgrade computer systems to be compliant with federal regulations and contribute to new physician start up costs. Without Georgia HEART all of those things would be on a waiting list,” said Moody. If interested in getting the deduction and credit for 2020, Moody encourages local business owners to secure their credit today because once the cap has been reached it will no longer be available.

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