Take Action Now on Georgia Student Scholarship Organization Tax Credits

Dollar-for-dollar tax credits are available against Georgia income taxes for contributions to a Georgia Student Scholarship Organization (SSO). In addition, donors may also receive a charitable deduction on their federal taxes. This opportunity may get closed out sometime in May or June.  We recommend you take immediate action if you want to take advantage of this potential benefit.

 

General Information:  The State of Georgia has allocated roughly $52 million in income tax credits for 2013 to taxpayers that contribute to SSOs.  The SSOs in turn use the funds to provide scholarships to pre-k, kindergarten, primary or secondary public school students who wish to attend participating private schools.

 

The donor will receive a dollar-for-dollar tax credit against Georgia income taxes and if applicable, the donor will also receive a charitable deduction on his or her federal tax return.  This is particularly beneficial for those taxpayers in an Alternative Minimum Tax (AMT) position.  It is possible that total tax benefits for some taxpayers will actually exceed the cash outlay for the contribution, simply by redirecting Georgia tax dollars to private school education.

 

You can designate which private school you want your contribution directed.  There are some 35 SSOs to which you can contribute:  https://www.doe.k12.ga.us/External-Affairs-and-Policy/Policy/Documents/SSO%20List.pdf

 

Limits on Credits:

  • Up to $1,000 as a Single Individual
  • Up to $1,250 for each individual if a married filing separately
  • Up to $2,500 for a married couple filing a joint return
  • Up to 75% of state tax liability for a C-Corporation or Trust

 

Paperwork:  Donors need to get pre-approval from Georgia by completing and submitting IT-QEE-TP1. This needs to be done as soon as possible since the $52 million cap could be reached in the next month or two.  The SSO you plan to use will likely help you complete the forms, take your contribution and complete the process.  See their website.  However, let us know if you need our assistance or if you have any questions.

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Pursuant to IRS Circular 230 disclosure requirements, please be advised that any written tax advice or information contained herein is not intended to be used to avoid any penalty imposed by a taxing authority, nor may the recipient of this document use such information for that purpose.  Please contact us with any questions regarding this disclosure.