HB 1110: Georgia Small Business Healthcare Affordability Act; enact

Georgia law currently has no tax credit tied to individual coverage health reimbursement arrangements (a type of benefit where employers give workers a set amount to buy their own health insurance rather than offering a group plan). This bill, called the Georgia Small Business Resiliency Act, adds one. Employers with fewer than 50 employees who have operated in Georgia since January 1, 2013 could qualify if they offer covered employees paid time off, paid parental leave, a health savings account, and an individual coverage health reimbursement arrangement funded at least $200 per month per employee. Qualifying employers could claim a credit worth up to $600 per covered employee in the first three years they claim it, $400 in the fourth year, and $200 in the fifth year, for a maximum of five years total. Employers must apply for preapproval by October 1 each year, and the state Department of Revenue would issue certificates by November 1. Total credits statewide are capped at $10 million per year. The credit applies to tax years starting on or after January 1, 2026, and the whole provision expires on December 31, 2030.

• Creates a new Georgia income tax credit for small businesses that fund individual coverage health reimbursement arrangements for employees.
• Limits eligibility to employers with fewer than 50 employees operating in Georgia since 2013 that also offer paid time off, paid parental leave, and health savings accounts.
• Caps the credit at $600 per employee for the first three years, dropping to $400 and then $200 in years four and five, with a five-year lifetime limit.
• Sets a statewide cap of $10 million in total credits per year and requires employers to apply for preapproval by October 1 annually.
• Lets pass-through business owners (partners, shareholders, or members) claim the credit based on their share of the business's income if the business itself owes no tax.
• Automatically repeals the entire tax credit program on December 31, 2030.

Small Georgia businesses with fewer than 50 employees that have operated since 2013, their employees who receive individual coverage health reimbursement arrangements, and the Georgia Department of Revenue, which would review applications, issue preapproval certificates, and administer the annual $10 million cap.

Eligible small employers could offset part of the cost of funding individual health coverage for workers instead of a traditional group health plan, potentially making that benefit more affordable to offer. Because approval is capped and first-come, some qualifying businesses could be turned away once the yearly $10 million limit is reached.

• Section 1 names the law the 'Georgia Small Business Resiliency Act.'
• Section 2 adds new Code Section 48-7-40.10 defining 'qualified taxpayer' as a business operating in Georgia since January 1, 2013 with fewer than 50 employees offering specific benefits.
• Subsection (b) requires at least $200 per month in contributions per covered employee and that the contribution match or exceed prior-year employer health spending for that employee.
• Subsection (c) sets the sliding credit amounts: $600 per employee for years one through three, $400 in year four, and $200 in year five, capped at five years total.
• Subsection (d) caps total statewide credits at $10 million per year.
• Subsection (e) requires preapproval applications by October 1 each year, with the Department of Revenue issuing certificates by November 1, prioritizing repeat claimants.
• Subsection (i) repeals the entire Code section on December 31, 2030.
• Section 3 sets the effective date as July 1, 2026, applying to tax years beginning on or after January 1, 2026.

1. 2026-03-03House Committee Favorably Reported By Substitute (House)
2. 2026-02-03House Second Readers (House)
3. 2026-02-02House First Readers (House)
4. 2026-01-29House Hopper (House)

• Scott Hilton (R, HD-048)Primary sponsor
• Matt Reeves (R, HD-099)
• Eddie Lumsden (R, HD-012)
• Mark Newton (R, HD-127)
• Vance Smith (R, HD-138)
• Ron Stephens (R, HD-164)

• small business tax credits
• health insurance benefits
• Georgia income tax
• health reimbursement arrangements