How to Claim the Georgia Rural Hospital Tax Credit

The Georgia Rural Hospital Tax Credit allows both individual residents and corporations operating within Georgia to make financial contributions to qualifying hospitals in exchange for a dollar-for-dollar reduction of their state income tax liability. This program was established to offer financial assistance to rural hospitals facing economic pressures.

Contributions are funneled to Rural Hospital Organizations, or RHOs, which are acute care hospitals that meet a series of state-mandated criteria. These criteria include being licensed by the Georgia Department of Community Health, accepting both Medicare and Medicaid, and providing care to indigent patients.

Contribution and Credit Limits

The amount a taxpayer can contribute for a 100% tax credit is subject to specific limits, which vary by the type of taxpayer. For the first half of the calendar year, from January 1 through June 30, an individual filing as single or head of household can contribute up to $5,000. A married couple filing a joint return can contribute up to a maximum of $10,000 during this same period.

For business entities, the rules differ. The owner of a pass-through entity, such as an S-Corporation, LLC, or partnership, is eligible for a credit of up to $25,000 for the first six months of the year. A C-Corporation or a trust is allowed a 100% tax credit for contributions made to a rural hospital; however, the credit cannot exceed 75% of the entity’s Georgia income tax liability.

A change occurs on July 1 of each year, when the contribution limits for individual filers and pass-through entity owners are waived. This allows for larger contributions for the remainder of the year, provided credits are still available. The entire program is subject to a $100 million statewide annual cap, and if the total amount of pre-approved contributions exceeds this cap, the available credits are distributed on a first-come, first-served basis.

Preparing Your Contribution Request

The first step involves selecting a qualifying hospital to support. The Georgia Department of Community Health maintains an official list of all eligible Rural Hospital Organizations (RHOs). Taxpayers should consult this list, which is available on the department’s website, to ensure their chosen facility is approved to receive donations.

Once a hospital is selected, the taxpayer must collect the information required to complete Form IT-QRHOE-1, the official application for pre-approval. This includes the taxpayer’s identification number, which is the Social Security Number for individuals or the Federal Employer Identification Number (FEIN) for businesses. The taxpayer also needs the exact legal name of the chosen RHO and the precise dollar amount they intend to contribute.

The Contribution and Claiming Process

The process begins with requesting pre-approval from the Georgia Department of Revenue. Taxpayers must submit their request, containing their chosen hospital and contribution amount, through the Georgia Tax Center online portal. Upon successful review, the department issues an official approval letter to the taxpayer, which confirms the amount of the reserved tax credit.

After receiving the approval letter, the taxpayer must make the actual monetary contribution. The payment is not sent to the state but is made directly to the designated Rural Hospital Organization. Payment must be made within 180 days of receiving the approval letter or by December 31 of that year, whichever comes first.

Once the RHO receives the funds, it will provide the donor with proof of the contribution. This official acknowledgment is issued on a specific document, Form IT-QRHOE-RHO1, which serves as the taxpayer’s receipt.

The final step is to claim the credit when filing the annual Georgia income tax return. The taxpayer must include the credit amount on their state return and attach copies of two documents: the pre-approval letter from the Department of Revenue and the proof of donation, Form IT-QRHOE-RHO1, received from the hospital.