Georgia Qualified Health Insurance Expense Credit

The Georgia Qualified Health Insurance Expense Credit is a state income tax credit available to small employers that offer High Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs) to their Georgia employees. It is designed to offset a portion of the employer’s cost of providing qualifying health coverage to a small workforce. The credit is governed by O.C.G.A. § 48-7-40.26 and is available through the 2029 tax year.

Program at a Glance

Who qualifies	Employers with 50 or fewer employees offering a qualifying HDHP/HSA health plan
Plan requirement	Must offer a High Deductible Health Plan (HDHP) paired with employee Health Savings Accounts (HSAs)
Applies against	Georgia state income tax
Program sunset	Available through tax year 2029
Statute	O.C.G.A. § 48-7-40.26

Eligibility Requirements

To qualify for the credit, an employer must meet all of the following conditions:

• Have 50 or fewer employees during the tax year
• Offer a qualifying High Deductible Health Plan (HDHP) to employees
• The HDHP must be paired with Health Savings Accounts (HSAs) for employees
• The employer must pay a portion of the health insurance premiums — making the plan available is not sufficient
• The plan must cover Georgia-based employees

High Deductible Health Plan (HDHP) Requirement

Unlike a general health insurance credit, this program specifically requires the employer to offer an HDHP — a plan with higher deductibles and lower premiums than traditional health plans, designed to be paired with employee HSAs. For 2024, IRS minimum deductible thresholds for HDHPs are $1,600 for self-only coverage and $3,200 for family coverage. Employers offering traditional low-deductible plans do not qualify for this specific credit.

The HDHP/HSA combination is increasingly common among small employers as a cost-effective way to offer health benefits. Businesses already offering this plan structure should evaluate whether they are capturing the available Georgia tax credit.

Credit Calculation

The credit is based on the employer’s qualified health insurance expenses — the portion of HDHP premiums the employer pays on behalf of employees. Employee-paid premium contributions through payroll deduction do not count toward the credit base.

[ Adam — please confirm the current credit rate (percentage of employer-paid premiums) and whether there is a per-employee cap or aggregate annual cap on the total credit. ]

Interaction with the Federal Small Business Health Care Tax Credit

Small businesses with fewer than 25 full-time equivalent employees and average annual wages below a threshold may also qualify for the federal Small Business Health Care Tax Credit (IRC § 45R), which provides up to 50% of employer-paid premiums for coverage purchased through the SHOP marketplace. The Georgia credit is separate and can generally be claimed in addition to the federal credit, though coordination rules may apply to prevent double-counting the same expenses.

Program Duration and Recurring Value

The credit is available through the 2029 tax year. Qualifying businesses can claim it annually for each year they remain eligible. Because small business health insurance costs are recurring, the credit compounds meaningfully over multiple years — making it valuable to identify and claim in every eligible tax year rather than deferring.

How to Claim

The credit is claimed on the employer’s Georgia income tax return. Documentation should include records of the qualifying HDHP offered, enrollment data, and total employer-paid premium amounts for the tax year.

Key Notes

• The plan must be an HDHP paired with HSAs — general health insurance plans without this structure do not qualify for this specific credit
• Only employer-paid premium contributions count toward the credit base; employee payroll-deducted amounts are excluded
• The credit sunsets after 2029 — eligible businesses should claim it every year rather than deferring
• Businesses with more than 50 employees do not qualify
• Program rules and credit rates should be confirmed with the Georgia Department of Revenue each year as implementing guidance may be updated

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