Hailey Tran
The Rural Hospital Tax Credit Program is a scheme that allows taxpayers to allocate a portion of their state tax burden directly to local hospitals and health systems. Georgia and New Mexico are two states that have implemented this program. In Georgia, taxpayers can receive a 100% state income tax credit for contributing to designated Rural Hospital Organizations (RHOs). The program has an annual cap of $100 million in tax credits, and taxpayers must be pre-approved by the Georgia Department of Revenue (DOR). In New Mexico, certain healthcare practitioners who provide services in rural underserved areas can apply for an income tax credit of $3,000 or $5,000 through the Rural Health Care Practitioner Tax Credit Program.
| Characteristics | Values |
|---|---|
| Location | Georgia, US |
| Effective Date | January 1, 2017 |
| Eligibility | Hospitals must meet qualification criteria, including county population size (50,000 or less, excluding military personnel), tax-exempt status, acceptance of Medicare and Medicaid, and minimum annual provision of indigent or uncompensated care. |
| Tax Credit Amount | 100% state income tax credit |
| Contribution Limit | Individual taxpayers can contribute up to $5,000, married couples up to $10,000, and individual owners of S-Corps, LLCs, or Partnerships (not paying tax at the entity level) can contribute up to $25,000 in the first six months. After June 30, contributions are unlimited until the annual cap is met. |
| Annual Cap | $100 million |
| Application Process | Complete and submit the HEART Tax Credit Form online or by mail. |
| Payment Process | Send a check to Georgia HEART, payable to the hospital, within 180 days of receiving tax credit pre-approval. |
| Reporting | RHOs must report how they use the contributions annually to the DCH. |
| Unused Credit | Can be carried forward to offset tax liability for the next five years. |
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What You'll Learn
Georgia's Rural Hospital Tax Credit Program
The Department of Community Health (DCH) will post an updated list of eligible hospitals each year, based on financial need and in alphabetical order, along with updated timelines. This list provides transparency and helps taxpayers identify which hospitals they can support through the program.
To participate in the program, taxpayers can refer to the Rural Hospital Tax Credit CY 2025-2026 Operations Manual for detailed instructions. This manual outlines the steps to obtain tax credits for donations made to qualified rural hospitals. It is important for taxpayers to stay informed about the specific requirements and procedures to ensure their contributions are eligible for the tax credit.
One notable aspect of the program is that it empowers taxpayers to direct their tax burden towards supporting local healthcare infrastructure. This can foster a sense of community engagement and ensure that rural hospitals receive much-needed funding. By participating in this program, taxpayers can make a direct impact on the accessibility and quality of healthcare services in their local areas.
Georgia HEART, a program mentioned on the Georgia Heart website, is another initiative that involves corporate donations to rural hospitals. It is not clear from the sources whether Georgia HEART is directly affiliated with the Rural Hospital Tax Credit Program, but it shares a similar goal of supporting rural hospitals in Georgia.
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New Mexico's Rural Health Care Practitioner Tax Credit Program
To qualify, the healthcare practitioner must provide direct healthcare services in a rural, medically underserved area of New Mexico. Applicants can use the Rural Health Information (RHI) Hub's "Am I Rural?" tool to determine if their practice address is in an eligible location. This tool uses federal definitions of rural, including eligibility criteria for federal programs.
The tax credit amount varies depending on the type of healthcare professional. Doctors, osteopathic physicians, dentists, clinical psychologists, podiatrists, and optometrists are eligible for a $5,000 tax credit. Meanwhile, licensed dental hygienists, physician assistants, certified nurse midwives, certified registered nurse anesthetists, certified nurse practitioners, and clinical nurse specialists qualify for a $3,000 credit.
Eligible practitioners can apply for a Certificate of Eligibility through the DOH. It is important to note that the DOH does not issue the tax credit and cannot offer tax advice. Applicants are responsible for reviewing the eligibility requirements for the correct tax year and submitting the necessary forms to the New Mexico Taxation and Revenue Department.
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Who Qualifies for the Georgia HEART Hospital Program?
The Georgia HEART Hospital Program is a way to increase funding and healthcare access for thousands of Georgians. It was established in 2016 when the Georgia General Assembly passed Senate Bill 258, which was then signed into law by Governor Nathan Deal. The program provides Georgia income tax credits to individual and corporate taxpayers who contribute to qualified rural hospital organizations (RHOs).
To qualify as an RHO, a hospital must be a "rural hospital organization," which includes acute care hospitals licensed by the Georgia Department of Community Health (DCH) and located in a rural county. RHOs must also meet several requirements, including:
- Participating in both Medicaid and Medicare and accepting patients from both programs.
- Providing healthcare services to indigent patients, with at least 10% of its annual net revenue categorized as indigent care, charity care, or bad debt.
- Annually filing IRS Form 990, "Return of Organization Exempt From Income Tax," or an equivalent form provided by the DCH.
- Being operated by a county or municipal authority pursuant to Article 4 of Chapter 7 of Georgia Code Title 3.
To participate in the Georgia HEART tax credit program, taxpayers must be pre-approved by the Georgia Department of Revenue (DOR). Tax credits are awarded on a first-come, first-served basis, and there is a cap on the total amount of tax credits available. The process for contributing to an RHO for a tax credit involves submitting a tax credit application, receiving approval and a payment deadline, making the payment, and then receiving a tax receipt to claim the credit on the Georgia income tax return.
Pass-through businesses and C Corporations can contribute to eligible rural hospitals through the HEART program, with the same limits applying from January 1 to June 30 of each taxable year. After June 30, as long as tax credits are still available, individual taxpayers can make unlimited contributions to RHOs and receive a corresponding 100% Georgia income tax credit.
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How to File for a Tax Credit
The Rural Hospital Tax Credit Program is a financial support scheme for rural hospitals in Georgia, USA. The scheme allows individual taxpayers to make contributions to eligible rural hospitals in return for a Georgia income tax credit.
To apply for a Rural Hospital Tax Credit in Georgia, you must first determine your eligibility. You must pay Georgia income taxes to be eligible for this specific tax credit. From January 1 through June 30 of each taxable year, eligible taxpayers can apply for a tax credit on the Georgia HEART website. After June 30, credits are awarded on a first-come, first-served basis until the annual cap is met.
The amount of tax credit you can apply for depends on your marital status and the type of entity you represent. From January 1 through June 30, individual taxpayers can apply for a tax credit of up to $5,000, while married couples can apply for up to $10,000. Individual owners of S-Corps, LLCs, or Partnerships (Pass-Through Entities) not paying tax at the entity level can apply for up to $25,000. On July 1 of each year, these limits are waived, and you can contribute as much as you like, provided you have the tax liability to support the contribution.
To apply, you must complete and submit a HEART Tax Credit Form online or by printing and submitting a paper form. Georgia HEART will then submit your tax credit pre-approval form to the Georgia Department of Revenue (DOR) in the order it is received.
It is important to note that the Georgia Rural Hospital Tax Credit Program became effective on January 1, 2017. Each year, the Georgia Department of Community Health (DCH) posts an updated list of eligible hospitals based on financial need and in alphabetical order, along with updated timelines.
For those seeking a similar tax credit in New Mexico, the New Mexico Taxation and Revenue Department offers the Rural Health Care Practitioner Tax Credit Program. This program provides certain healthcare practitioners who provide services in rural areas with an income tax credit of $3,000 or $5,000. Applicants must review the Program Overview documents and confirm their eligibility for the correct tax year before applying for a Certificate of Eligibility.
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Annual Limits and Deadlines
The annual limits and deadlines for the rural hospital tax credit program vary by state and even by county. Here is an overview of the programs in Georgia, Oregon, and New Mexico.
Georgia
The Georgia Rural Hospital Tax Credit Program became effective on January 1, 2017. The program has been extended for five additional years and will now expire on December 31, 2029. The annual aggregate amount of tax credits allowed has been increased from $75 million to $100 million. Individual owners of pass-through entities can contribute up to $25,000 in the first six months of the year, and contributions from this taxpayer type are unlimited in the second half of the year. From January 1 through June 30 of each taxable year, certain limits apply to Georgia HEART RHO contributions. After June 30 of each year, individual taxpayers may make unlimited contributions to RHOs for a corresponding 100% Georgia income tax credit, as long as tax credits are still available.
Oregon
The Oregon Rural Practitioner Tax Credit is for MDs, DPMs, and DOs on the staff of an ineligible hospital but whose practices are located outside the immediate service area of the community where the hospital is situated. To qualify, the practitioner must provide a minimum of 20 hours per week of patient care, averaged over the month in an eligible rural area. They must also have an individual adjusted gross income not exceeding $300,000 for the tax year. There is an annual processing fee of $45, payable to the Oregon Office of Rural Health, which must accompany all forms. Eligible practitioners can claim up to 10 eligible tax years, and the credit is amendable for three previous tax years. The credit is prorated on a month-by-month basis, with each eligible month worth 8.33% of the overall credit.
New Mexico
In New Mexico, certain healthcare practitioners who provide healthcare services in rural areas can apply for an income tax credit of $3,000 or $5,000 through the New Mexico Rural Health Care Practitioner Tax Credit Program. Applicants must have provided direct healthcare services in a rural, underserved area in a taxable year.
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Frequently asked questions
The rural hospital tax credit is a program that allows taxpayers to receive a tax credit for contributing to rural hospital organizations.
Taxpayers can allocate a portion of their state tax burden directly to local hospitals and health systems. They will receive a tax credit for their contributions, which can be up to 100% of the amount contributed.
Eligibility for the rural hospital tax credit varies by state and program. In Georgia, individuals who pay state income taxes are eligible to receive a tax credit for contributing to qualified rural hospital organizations. In New Mexico, certain healthcare practitioners who provide healthcare services in rural areas can apply for an income tax credit.
