Georgia CommonsHouse · Engrossed · 2025-2026 Regular Session
HB 370: Ad valorem tax; school districts; state-wide base year homestead exemption; provisions
Last action April 4, 2025 · House Agreed Senate Amend or Sub As Amended
A Senate substitute for House Bill 370 would replace its original property tax subject matter with a new state income tax credit for small Georgia employers that contribute to individual coverage health reimbursement arrangements (ICHRAs) for employees.
The summaries below were written by an AI model (claude-sonnet-5) from the text of the bill and are not part of it. Quote the text, not the summary. The stored text is the Comm Sub version, the latest the General Assembly's website lists.
In plain language
Although HB 370 was originally filed as a property tax bill, the Senate Finance Committee substitute rewrites it to create a new Georgia income tax credit. Starting with tax years beginning on or after January 1, 2026, employers with fewer than 50 employees that contribute at least $200 a month per employee to an individual coverage health reimbursement arrangement (a way employers help workers buy their own health insurance) can claim a state income tax credit. The credit starts at up to $600 per covered employee for the first three years, drops to $400 in year four and $200 in year five, and no employer can claim it for more than five years total. Statewide, the credit is capped at $5 million per year, and employers must apply for preapproval by October 1 each year to claim it. The tax credit provision is set to expire on December 31, 2028. The bill would take effect July 1, 2025.
What the bill does
- Creates a new Georgia income tax credit for employers with fewer than 50 employees that contribute to individual coverage health reimbursement arrangements (ICHRAs) for workers.
- Requires employers to contribute at least $200 per month per covered employee and to match or exceed prior-year health benefit contributions to qualify.
- Sets a declining credit schedule: up to $600 per employee in years one through three, $400 in year four, and $200 in year five, capped at five years per employer.
- Caps total statewide credits claimed under this program at $5 million per year and requires employers to apply for preapproval by October 1 each year.
- Allows pass-through entities like partnerships to pass the credit to their members, shareholders, or partners based on ownership share.
- Automatically repeals the tax credit provision on December 31, 2028.
Who it affects
Small Georgia employers with fewer than 50 employees who offer individual coverage health reimbursement arrangements, their covered employees, pass-through business owners such as partners and shareholders, and the Georgia Department of Revenue, which must review applications and issue preapproval certificates.
Why it matters
Small businesses that help workers buy individual health insurance through ICHRAs could get meaningful state tax relief, potentially encouraging more employers to offer this benefit. Because the credit is capped statewide at $5 million per year and requires preapproval, not every applying employer is guaranteed to receive it.
Key provisions
- Section 1 rewrites O.C.G.A. § 48-7-40.10, previously reserved (blank), to define 'covered employee,' 'individual coverage health reimbursement arrangement,' and 'qualified taxpayer.'
- Subsection (b) sets eligibility rules, including a $200 per month minimum employer contribution per covered employee, for tax years starting on or after January 1, 2026.
- Subsection (c) creates a declining credit cap: $600 per employee in years one through three, $400 in year four, and $200 in year five, with a five-year maximum per taxpayer.
- Subsection (d) caps total credits statewide at $5 million annually.
- Subsection (e) requires employers to submit preapproval applications by October 1 each year, with the Department of Revenue issuing certificates by November 1.
- Subsection (f) allows pass-through entities without their own income tax liability to pass the credit to members, shareholders, or partners.
- Subsection (i) repeals the entire credit provision on December 31, 2028.
- Section 2 sets the effective date as July 1, 2025, applicable to tax years beginning on or after January 1, 2026.
From the bill
“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”
“In no event shall the aggregate amount of tax credits allowed pursuant to this Code section exceed $5 million per year.”
“This Code section shall stand repealed and reserved on December 31, 2028.”
Status timeline
- House Agreed Senate Amend or Sub As Amended (House)
- Senate Passed/Adopted By Substitute (Senate)
- Senate Third Read (Senate)
- Senate Taken from Table (Senate)
- Senate Tabled (Senate)
- Senate Engrossed (Senate)
- Senate Read Second Time (Senate)
- Senate Committee Favorably Reported By Substitute (Senate)
Show full history (15 actions)
- Senate Read and Referred (Senate)
- House Passed/Adopted By Substitute (House)
- House Third Readers (House)
- House Committee Favorably Reported By Substitute (House)
- House Second Readers (House)
- House First Readers (House)
- House Hopper (House)
Sponsors
- Houston Gaines (R, HD-120)
- Jan Jones (R, HD-47)
- Bruce Williamson (R, HD-112)
- Chuck Efstration (R, HD-104)
- Trey Kelley (R, HD-16)
- Marcus Wiedower (R, HD-121)
- Chuck Hufstetler (R, SD-52)
Votes
- House voteMarch 6, 2025
96 yea, 77 nay (4 not voting, 3 excused)
- Senate voteApril 2, 2025
31 yea, 24 nay (0 not voting, 1 excused)
- Senate voteApril 2, 2025
43 yea, 11 nay (0 not voting, 2 excused)
- House voteApril 4, 2025
141 yea, 31 nay (1 not voting, 7 excused)
Topics
- small business tax credit
- health insurance
- income taxes
- health reimbursement arrangements