25 LC 50 1203S
The House Committee on Ways and Means offers the following substitute to HB 341:
A BILL TO BE ENTITLED
AN ACT
To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated,1
relating to imposition, rate, computation, exemptions, and credits for income taxes, so as to2
create a tax credit for certain employers that offer individual coverage health reimbursement3
arrangements to employees; to provide for terms, conditions, and limitations; to provide for4
preapproval; to provide for aggregate annual limits; to provide for rules and regulations; to5
provide for definitions; to provide for a sunset; to provide for related matters; to repeal6
conflicting laws; and for other purposes.7
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8
SECTION 1.9
Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to10
imposition, rate, computation, exemptions, and credits for income taxes, is amended by11
revising Code Section 48-7-40.10, which is reserved, as follows:12
"48-7-40.10.13
(a) As used in this Code section, the term:14
(1) 'Covered employee' means an employee who is covered by an individual coverage15
health reimbursement arrangement provided by a qualified taxpayer.16
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(2) 'Individual coverage health reimbursement arrangement' means a health17
reimbursement arrangement established pursuant to 45 C.F.R. Section 146.123.18
(3) 'Qualified taxpayer' means any taxpayer with ten or fewer employees that offers an19
individual coverage health reimbursement arrangement.20
(b) For taxable years beginning on or after January 1, 2026, a qualified taxpayer shall be21
allowed a tax credit against the tax imposed under this article for contributions to an22
individual coverage health reimbursement arrangement for employees who are residents23
of this state, provided that:24
(1) The qualified taxpayer contributed at least $100.00 per month to an individual25
coverage health reimbursement arrangement for each covered employee; and26
(2) The contribution made by the qualified taxpayer for each employee for which the27
qualified taxpayer is seeking a credit pursuant to this Code section is equal to or greater28
than the total amount of contributions to any employer sponsored health benefit plan29
made by the qualified taxpayer for such employee in the previous taxable year.30
(c)(1) The amount of the credit allowed pursuant to this Code section shall not exceed31
an amount equal to:32
(A) In the first three years a credit is claimed pursuant to this Code section, $600.0033
per covered employee;34
(B) In the fourth year a credit is claimed pursuant to this Code section, $400.00 per35
covered employee; and36
(C) In the fifth year a credit is claimed pursuant to this Code section, $200.00 per37
covered employee.38
(2) No qualified taxpayer shall be allowed a tax credit pursuant to this Code section for39
more than five total years.40
(d) In no event shall the aggregate amount of tax credits allowed pursuant to this Code41
section exceed $5 million per year.42
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(e)(1) To be allowed a tax credit pursuant to this Code section, a taxpayer shall submit43
an application for preapproval no later than October 1 of the year preceding the year in 44
which the credit pursuant to this Code section would be allowed.45
(2) The department shall require preapproval applications to contain such information46
as is necessary to substantiate a taxpayer's eligibility for tax credits allowed pursuant to47
this Code section.48
(3) The department shall review completed preapproval applications in the order in49
which such applications were received; provided, however, that the department shall50
prioritize the review of completed preapproval applications from qualified taxpayers that51
have already claimed a credit pursuant to this Code section before any other preapproval52
applications.53
(4) The department shall approve properly completed and timely submitted preapproval54
applications and shall issue preapproval certificates to approved taxpayers by55
November 1 of each year, certifying the amount of credits each such taxpayer is eligible56
to claim if the taxpayer meets the conditions of this Code section.57
(f) If the qualified taxpayer allowed a tax credit pursuant to this Code section is a58
pass-through entity and has no income tax liability pursuant to this article, such tax credit59
may be claimed by its members, shareholders, or partners based on the percentage of such60
qualified taxpayer’s distributive income to which the member, shareholder, or partner is61
entitled.62
(g) In no event shall the total amount of a tax credit allowed to any qualified taxpayer63
pursuant to this Code section exceed such taxpayer's income tax liability. No unused tax64
credit shall be allowed the qualified taxpayer against succeeding years' tax liability. No65
such credit shall be allowed the qualified taxpayer against prior years' tax liability.66
(h) The department shall promulgate any rules and regulations necessary to implement and67
administer the provisions of this Code section.68
(i) This Code section shall stand repealed and reserved on December 31, 2031. Reserved."69
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SECTION 2.70
All laws and parts of laws in conflict with this Act are repealed.71
H. B. 341 (SUB)
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