HB1110: HB1110 Georgia Small Business Healthcare Affordability Act; enact

This bill, called the Georgia Small Business Resiliency Act, creates a new state income tax credit under Georgia's tax code (O.C.G.A. § 48-7-40.10). It targets small businesses that have operated in Georgia since January 1, 2013, have fewer than 50 employees, and provide workers with at least ten paid days off, some paid parental leave, a health savings account, and an individual coverage health reimbursement arrangement, a way employers reimburse workers tax-free for individual health insurance costs instead of offering a traditional group plan. To qualify, the business must contribute at least $200 per month per employee to that arrangement, and the amount must match or exceed what it previously spent on employer-sponsored health coverage for that worker. The credit starts at $600 per employee for the first three years, drops to $400 in year four and $200 in year five, and can be claimed for no more than five years total. Businesses must apply for preapproval each year by October 1, and the state caps total credits at $10 million annually. The law would take effect July 1, 2026, for tax years starting on or after January 1, 2026, and the whole program would expire on December 31, 2030.

• Creates a new Georgia income tax credit for small businesses that offer employees individual coverage health reimbursement arrangements instead of traditional group health plans.
• Limits eligibility to businesses operating in Georgia since 2013 with fewer than 50 employees that also provide paid time off, paid parental leave, and health savings account access.
• Sets a sliding credit amount per employee: $600 in years one through three, $400 in year four, and $200 in year five, capped at five years per business.
• Requires businesses to apply for state preapproval by October 1 each year, with the Department of Revenue issuing certificates by November 1.
• Caps total statewide credits at $10 million per year and lets pass-through business owners claim the credit based on their ownership share.
• 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 health reimbursement arrangements and other benefits, pass-through business owners such as partners and shareholders, and the Georgia Department of Revenue, which must review applications and administer the credit.

Eligible small businesses could lower their state tax bills by shifting from traditional group health insurance to individual coverage reimbursement arrangements, potentially changing how workers get health coverage. The $10 million annual cap and preapproval process mean not every applicant is guaranteed the credit, and the program disappears after 2030 unless renewed.

• 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 2013 with fewer than 50 employees offering specific benefits.
• Subsection (b) requires at least $200 per month in employer contributions per covered employee and that contributions not fall below prior-year health plan spending.
• Subsection (c) sets the declining per-employee credit schedule ($600, then $400, then $200) and a five-year maximum claim period per business.
• Subsection (d) caps total annual credits statewide at $10 million.
• Subsection (e) creates a preapproval application process with an October 1 deadline and November 1 certificate issuance, prioritizing repeat claimants.
• Subsection (i) repeals the entire credit program on December 31, 2030.
• Section 3 sets the effective date as July 1, 2026, applicable 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 credit
• health reimbursement arrangements
• Georgia income tax
• employee benefits
• health insurance