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.
<ins>(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.
</ins>
<ins>(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.
</ins>
<ins>(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.</ins> <del>Reserved."
</del> 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.