---
title: HB 341. Income tax; certain employers that offer individual coverage health reimbursement arrangements to employees; create tax credit
collection: bills
id: 2025-2026/hb341
cite_as: HB 341, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb341
md_url: https://georgiacommons.org/bills/2025-2026/hb341.md
text_url: https://georgiacommons.org/bills/2025-2026/hb341/text
source_url: https://www.legis.ga.gov/legislation/70073
date: 2025-03-06
status: introduced
corpus_version: bills-2026-09-12
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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omitted: votes and history
omitted_chars: 369
omitted_url: https://georgiacommons.org/bills/2025-2026/hb341.md?full=1
bill_number: HB 341
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2025-02-06
last_action: House Withdrawn, Recommitted
sponsors:
- Mark Newton
- Bruce Williamson
- Eddie Lumsden
- Trey Kelley
- Darlene Taylor
- Kasey Carpenter
text_version: Comm Sub
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB341/2025
upstream_id: 1961011
summaries_model: claude-sonnet-5
topic_tags:
- small business taxes
- health insurance
- income tax credits
- employer health benefits
---
# HB 341. Income tax; certain employers that offer individual coverage health reimbursement arrangements to employees; create tax credit
## Text
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,
relating to imposition, rate, computation, exemptions, and credits for income taxes, so as to
create a tax credit for certain employers that offer individual coverage health reimbursement
arrangements to employees; to provide for terms, conditions, and limitations; to provide for
preapproval; to provide for aggregate annual limits; to provide for rules and regulations; to
provide for definitions; to provide for a sunset; to provide for related matters; to provide for
an effective date and applicability; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to
imposition, rate, computation, exemptions, and credits for income taxes, is amended by
revising Code Section 48-7-40.10, which is reserved, as follows:
"48-7-40.10.
(a) As used in this Code section, the term:
(1) 'Covered employee' means an employee who is covered by an individual coverage
health reimbursement arrangement provided by a qualified taxpayer.
(2) 'Individual coverage health reimbursement arrangement' means a health
reimbursement arrangement established pursuant to 45 C.F.R. Section 146.123.
(3) 'Qualified taxpayer' means any taxpayer with ten or fewer employees that offers an
individual coverage health reimbursement arrangement.
(b) For taxable years beginning on or after January 1, 2026, a qualified taxpayer shall be
allowed a tax credit against the tax imposed under this article for contributions to an
individual coverage health reimbursement arrangement for employees who are residents
of this state, provided that:
(1) The qualified taxpayer contributed at least $100.00 per month to an individual
coverage health reimbursement arrangement for each covered employee; and
(2) The contribution made by the qualified taxpayer for each employee for which the
qualified taxpayer is seeking a credit pursuant to this Code section is equal to or greater
than the total amount of contributions to any employer sponsored health benefit plan
made by the qualified taxpayer for such employee in the previous taxable year.
(c)(1) The amount of the credit allowed pursuant to this Code section shall not exceed
an amount equal to:
(A) In the first three years a credit is claimed pursuant to this Code section, $600.00
per covered employee;
(B) In the fourth year a credit is claimed pursuant to this Code section, $400.00 per
covered employee; and
(C) In the fifth year a credit is claimed pursuant to this Code section, $200.00 per
covered employee.
(2) No qualified taxpayer shall be allowed a tax credit pursuant to this Code section for
more than five total years.
(d) In no event shall the aggregate amount of tax credits allowed pursuant to this Code
section exceed $5 million per year.
(e)(1) To be allowed a tax credit pursuant to this Code section, a taxpayer shall submit
an application for preapproval no later than October 1 of the year preceding the year in
which the credit pursuant to this Code section would be allowed.
(2) The department shall require preapproval applications to contain such information
as is necessary to substantiate a taxpayer's eligibility for tax credits allowed pursuant to
this Code section.
(3) The department shall review completed preapproval applications in the order in
which such applications were received; provided, however, that the department shall
prioritize the review of completed preapproval applications from qualified taxpayers that
have already claimed a credit pursuant to this Code section before any other preapproval
applications.
(4) The department shall approve properly completed and timely submitted preapproval
applications and shall issue preapproval certificates to approved taxpayers by
November 1 of each year, certifying the amount of credits each such taxpayer is eligible
to claim if the taxpayer meets the conditions of this Code section.
(f) In no event shall the total amount of a tax credit allowed to any qualified taxpayer
pursuant to this Code section exceed such taxpayer's income tax liability. No unused tax
credit shall be allowed the qualified taxpayer against succeeding years' tax liability. No
such credit shall be allowed the qualified taxpayer against prior years' tax liability.
(g) The department shall promulgate any rules and regulations necessary to implement and
administer the provisions of this Code section.
(h) This Code section shall stand repealed and reserved on December 31, 2031. Reserved."
SECTION 2.
This Act shall become effective on July 1, 2025, and shall be applicable to taxable years
beginning on or after January 1, 2026.
SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.
## Summaries written by Georgia Commons
The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.
A Georgia House bill would give small employers with ten or fewer workers a state income tax credit for contributing to individual health reimbursement arrangements, capped at $5 million statewide per year.
### Plain-language summary
Currently Georgia law has a reserved code section with no active tax credit for employers offering individual coverage health reimbursement arrangements, a type of benefit where an employer sets aside money for employees to buy their own health insurance instead of offering a traditional group plan. This bill fills in that reserved section (O.C.G.A. ยง 48-7-40.10) to create a new income tax credit for small employers, defined as those with ten or fewer employees, that make monthly contributions of at least $100 per covered employee to such an arrangement.
The credit starts at $600 per employee for the first three years a business claims it, drops to $400 in the fourth year, and $200 in the fifth year, with a five-year total limit per employer. Statewide credits are capped at $5 million per year, and employers must apply for preapproval each year by October 1. The credit applies to tax years beginning on or after January 1, 2026, and the whole provision expires December 31, 2031.
### What it does
- Creates a new state income tax credit for employers with ten or fewer employees that contribute at least $100 per month per employee to an individual coverage health reimbursement arrangement.
- Sets a declining credit schedule: $600 per employee for the first three years claimed, $400 in year four, and $200 in year five, with a five-year maximum per employer.
- Requires the employer's arrangement contribution to equal or exceed what it paid for any group health plan for that employee the previous year.
- Caps total statewide credits claimed under this provision at $5 million per year and requires the Department of Revenue to review applications in the order received.
- Requires employers to apply for preapproval by October 1 each year and directs the department to issue preapproval certificates by November 1.
- Sets the credit to expire automatically on December 31, 2031, reverting the code section to reserved status.
### Who it affects
Small Georgia businesses with ten or fewer employees that offer or are considering individual coverage health reimbursement arrangements, their employees who are Georgia residents receiving the benefit, and the Georgia Department of Revenue, which will review applications and issue preapproval certificates.
### Why it matters
Small employers that shift from traditional group health plans to individual coverage arrangements could receive a state tax credit worth up to $600 per employee annually, potentially making this benefit option more financially attractive, though the $5 million annual statewide cap means not every applicant may receive funding.
### Key provisions
- Section 1 defines 'qualified taxpayer' as an employer with ten or fewer employees offering an individual coverage health reimbursement arrangement.
- Section 1 requires a minimum monthly contribution of $100 per covered employee and requires that contribution to match or exceed prior-year group plan spending for that employee.
- Section 1 sets the credit amount on a declining scale over five years: $600, $600, $600, $400, then $200 per employee, with no credit allowed after five years for any employer.
- Section 1 caps total annual credits statewide at $5 million and establishes a preapproval application process due October 1 with certificates issued by November 1.
- Section 1 bars credits from exceeding a taxpayer's income tax liability and prohibits carrying unused credit to other tax years.
- Section 1 sunsets the entire credit provision on December 31, 2031, reserving the code section afterward.
- Section 2 sets the effective date as July 1, 2025, applicable to tax years beginning on or after January 1, 2026.
## Status
- Status: Introduced (2025-02-06)
- Last action: House Withdrawn, Recommitted (2025-03-06)
- Sponsors: Mark Newton, Bruce Williamson, Eddie Lumsden, Trey Kelley, Darlene Taylor, Kasey Carpenter
- Official page: https://www.legis.ga.gov/legislation/70073
> The history, votes, and amendments (369 characters) are at https://georgiacommons.org/bills/2025-2026/hb341.md?full=1