Georgia State Tax Credits
Tax policy is designed to do two things. First is to raise revenue for the taxing authority. The second is to provide a series of incentives, both positive and negative, to direct and encourage taxpayer behaviour toward whatever social goals politicians deem important.
These incentives run the gamut of ideas, creating in the tax code one vast social experiment. And tax policy and its related incentives are seen as everything from reasonable to inane and ludicrous, depending on your political persuasion and perspective.
Georgia’s Participation
Over the last 20 or so years, Georgia legislators have passed legislation giving Georgia taxpayers the opportunity to direct their state tax liability to specific organizations. The thought behind this legislation is to promote, in a limited way, some autonomy and self-direction for Georgia taxpayers. Meaning that instead of the legislature making the final decision on which organizations receive funding, taxpayers, to a limited extent, can make some of those decisions.
These organizations include rural hospitals, private schools, and more recently, foster care. The entities created to manage this legislation are Georgia HEART, GaSSO, Georgia GOAL, and Fostering Success.
Georgia HEART
This program encourages directing your state tax dollars to one or more of 55 rural hospitals, or qualifying Rural Hospital Organizations (RHOs), many of which provide critical access to medical care in areas with severe limits to such care. You can learn more at www.georgiaheart.org. Recent legislation increased the maximum credits to $75 million for 2024. All 2023 credits have been pledged. Taxpayers can give up to $5000 annually, $10,000 for couples filing a joint tax return, and up to 75% of Georgia income tax liability for those taxpayers paying tax at the business entity level.
Georgia Student Scholarship Organization (GaSSO)
This program encourages support for more than 130 private schools. You can learn more, including finding a list of qualifying schools, at www.georgiasso.com. Taxpayers can contribute up to $2500 or $5000 if married filing jointly. Taxpayers who receive income from pass-through entities can contribute the lesser of $25,000 or 75% of the Georgia income tax liability. And C-Corps can contribute up to 75% of their tax liability. The 2024 maximum allocated by the legislature is $120 million.
Georgia GOAL
This program is similar to GaSSO and offers support to more than 200 schools. You can learn more at www.goalscholarship.org.
Fostering Success
This program allows a state tax credit to qualifying foster care organizations. This legislation is very recent so an oversight organization, website, FAQ types of information, is still being developed. I found useful information at https://dor.georgia.gov/qualified-foster-child-donation-credit.
How They Work
The process is straightforward. Go to the respective website. Follow the generally user-friendly instructions. Make a pledge in line with your giving preferences and tax liability. Select an organization which will be the ultimate beneficiary of your pledge. These oversight organizations will then mail and/or email a confirmation to you. You will then fund your pledge. General guidelines are to fund your pledge within 60 days of making the pledge. The documentation you receive from the sponsoring organization becomes a part of your tax filing documents, confirming that you have already “paid” your state income taxes.
Final Thoughts
Given our libertarian/conservative leanings, we are fans of this approach to taxation and governance. And given personal relationships, we support two organizations. One is Clinch Memorial Hospital in Homerville Georgia, which we support through Georgia HEART. The other is Special Needs Schools of Gwinnett in Lawrenceville, Georgia which we support through GaSSO. We encourage you to learn more about these various programs. And we encourage you to consider giving through one of these organizations, to final beneficiaries whose work may be meaningful to you, as a way of directing your state tax liability.
Always reach out if you have questions. We would be pleased to help you think through and talk through your options.
And until we see you again, wishing you only the best.