Significantly, effective in 2022, you can achieve a substantive tax benefit AND make a much greater impact through the Georgia GOAL program!
Through IRS Notice 2020-75, issued on November 9, 2020, the IRS has allowed for a “SALT Workaround” for pass-through entities paying state income tax. In other words, the IRS will allow for state and local income taxes imposed on and paid by a pass-through entity with respect to its income to be taken as a deduction by the pass-through entity in computing its taxable income or loss for the year. These taxes are not subject to the SALT limitation for partners and shareholders who itemize deductions.
HB 149, which the Georgia General Assembly passed during its 2021 legislative session, represents Georgia’s response to this IRS Notice, and provides that pass-through entities may make an annual election to pay the tax due on income earned by the entity at the entity level at the rate of 5.75%.
HB 149 specifically provides that the electing entity shall be eligible for the Georgia GOAL credit and will be treated as an “other entity” that is eligible for a credit in an amount up to 75% of the entity’s Georgia income tax liability. Additionally, the electing pass-through entity will not be required to claim any business purpose for the payment besides satisfying the entity’s Georgia tax liability.
Your company’s opportunity to offer dramatic educational opportunities, and to assist families in our community through this program, just became substantial. No longer are you held to a contribution of $10,000. You may contribute up to three-fourths of your entire Georgia income tax liability for the year, if you choose to pay such tax at your pass-through entity level.
This brand-new opportunity may cause the entire $100 million of available education tax credits to be completely consumed on the first day of 2022. Apply now for your tax credit at www.goalscholarship.org.