| 2 | 2 | | The House Committee on Ways and Means offers the following substitute to HB 341: |
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| 3 | 3 | | A BILL TO BE ENTITLED |
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| 4 | 4 | | AN ACT |
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| 5 | 5 | | To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated,1 |
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| 6 | 6 | | relating to imposition, rate, computation, exemptions, and credits for income taxes, so as to2 |
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| 7 | 7 | | create a tax credit for certain employers that offer individual coverage health reimbursement3 |
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| 8 | 8 | | arrangements to employees; to provide for terms, conditions, and limitations; to provide for4 |
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| 9 | 9 | | preapproval; to provide for aggregate annual limits; to provide for rules and regulations; to5 |
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| 12 | 12 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 |
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| 13 | 13 | | SECTION 1.9 |
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| 14 | 14 | | Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to10 |
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| 15 | 15 | | imposition, rate, computation, exemptions, and credits for income taxes, is amended by11 |
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| 16 | 16 | | revising Code Section 48-7-40.10, which is reserved, as follows:12 |
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| 17 | 17 | | "48-7-40.10.13 |
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| 18 | 18 | | (a) As used in this Code section, the term:14 |
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| 19 | 19 | | (1) 'Covered employee' means an employee who is covered by an individual coverage15 |
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| 20 | 20 | | health reimbursement arrangement provided by a qualified taxpayer.16 |
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| 21 | 21 | | H. B. 341 (SUB) |
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| 23 | 23 | | (2) 'Individual coverage health reimbursement arrangement' means a health17 |
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| 24 | 24 | | reimbursement arrangement established pursuant to 45 C.F.R. Section 146.123.18 |
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| 25 | 25 | | (3) 'Qualified taxpayer' means any taxpayer with ten or fewer employees that offers an19 |
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| 26 | 26 | | individual coverage health reimbursement arrangement.20 |
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| 27 | 27 | | (b) For taxable years beginning on or after January 1, 2026, a qualified taxpayer shall be21 |
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| 28 | 28 | | allowed a tax credit against the tax imposed under this article for contributions to an22 |
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| 29 | 29 | | individual coverage health reimbursement arrangement for employees who are residents23 |
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| 30 | 30 | | of this state, provided that:24 |
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| 31 | 31 | | (1) The qualified taxpayer contributed at least $100.00 per month to an individual25 |
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| 32 | 32 | | coverage health reimbursement arrangement for each covered employee; and26 |
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| 33 | 33 | | (2) The contribution made by the qualified taxpayer for each employee for which the27 |
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| 34 | 34 | | qualified taxpayer is seeking a credit pursuant to this Code section is equal to or greater28 |
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| 35 | 35 | | than the total amount of contributions to any employer sponsored health benefit plan29 |
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| 36 | 36 | | made by the qualified taxpayer for such employee in the previous taxable year.30 |
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| 37 | 37 | | (c)(1) The amount of the credit allowed pursuant to this Code section shall not exceed31 |
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| 38 | 38 | | an amount equal to:32 |
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| 39 | 39 | | (A) In the first three years a credit is claimed pursuant to this Code section, $600.0033 |
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| 40 | 40 | | per covered employee;34 |
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| 41 | 41 | | (B) In the fourth year a credit is claimed pursuant to this Code section, $400.00 per35 |
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| 42 | 42 | | covered employee; and36 |
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| 43 | 43 | | (C) In the fifth year a credit is claimed pursuant to this Code section, $200.00 per37 |
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| 44 | 44 | | covered employee.38 |
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| 45 | 45 | | (2) No qualified taxpayer shall be allowed a tax credit pursuant to this Code section for39 |
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| 46 | 46 | | more than five total years.40 |
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| 47 | 47 | | (d) In no event shall the aggregate amount of tax credits allowed pursuant to this Code41 |
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| 48 | 48 | | section exceed $5 million per year.42 |
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| 49 | 49 | | H. B. 341 (SUB) |
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| 51 | 51 | | (e)(1) To be allowed a tax credit pursuant to this Code section, a taxpayer shall submit43 |
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| 52 | 52 | | an application for preapproval no later than October 1 of the year preceding the year in 44 |
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| 53 | 53 | | which the credit pursuant to this Code section would be allowed.45 |
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| 54 | 54 | | (2) The department shall require preapproval applications to contain such information46 |
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| 55 | 55 | | as is necessary to substantiate a taxpayer's eligibility for tax credits allowed pursuant to47 |
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| 56 | 56 | | this Code section.48 |
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| 57 | 57 | | (3) The department shall review completed preapproval applications in the order in49 |
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| 58 | 58 | | which such applications were received; provided, however, that the department shall50 |
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| 59 | 59 | | prioritize the review of completed preapproval applications from qualified taxpayers that51 |
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| 60 | 60 | | have already claimed a credit pursuant to this Code section before any other preapproval52 |
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| 61 | 61 | | applications.53 |
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| 62 | 62 | | (4) The department shall approve properly completed and timely submitted preapproval54 |
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| 63 | 63 | | applications and shall issue preapproval certificates to approved taxpayers by55 |
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| 64 | 64 | | November 1 of each year, certifying the amount of credits each such taxpayer is eligible56 |
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| 65 | 65 | | to claim if the taxpayer meets the conditions of this Code section.57 |
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| 66 | | - | (f) In no event shall the total amount of a tax credit allowed to any qualified taxpayer58 |
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| 67 | | - | pursuant to this Code section exceed such taxpayer's income tax liability. No unused tax59 |
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| 68 | | - | credit shall be allowed the qualified taxpayer against succeeding years' tax liability. No60 |
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| 69 | | - | such credit shall be allowed the qualified taxpayer against prior years' tax liability.61 |
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| 70 | | - | (g) The department shall promulgate any rules and regulations necessary to implement and62 |
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| 71 | | - | administer the provisions of this Code section.63 |
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| 72 | | - | (h) This Code section shall stand repealed and reserved on December 31, 2031. Reserved."64 |
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| 73 | | - | SECTION 2.65 |
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| 74 | | - | This Act shall become effective on July 1, 2025, and shall be applicable to taxable years66 |
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| 75 | | - | beginning on or after January 1, 2026.67 |
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| 66 | + | (f) If the qualified taxpayer allowed a tax credit pursuant to this Code section is a58 |
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| 67 | + | pass-through entity and has no income tax liability pursuant to this article, such tax credit59 |
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| 68 | + | may be claimed by its members, shareholders, or partners based on the percentage of such60 |
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| 69 | + | qualified taxpayer’s distributive income to which the member, shareholder, or partner is61 |
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| 70 | + | entitled.62 |
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| 71 | + | (g) In no event shall the total amount of a tax credit allowed to any qualified taxpayer63 |
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| 72 | + | pursuant to this Code section exceed such taxpayer's income tax liability. No unused tax64 |
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| 73 | + | credit shall be allowed the qualified taxpayer against succeeding years' tax liability. No65 |
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| 74 | + | such credit shall be allowed the qualified taxpayer against prior years' tax liability.66 |
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| 75 | + | (h) The department shall promulgate any rules and regulations necessary to implement and67 |
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| 76 | + | administer the provisions of this Code section.68 |
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| 77 | + | (i) This Code section shall stand repealed and reserved on December 31, 2031. Reserved."69 |
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