Are you interested in supporting private education in Georgia? Would you like to help a child attend a private school? Would you like to receive a state tax credit? If so, you will be very interested in learning about a relatively new provision in the Georgia tax code.
Through an act of the General Assembly, Georgia taxpayers are able to receive a tax credit in return for their financial support of local Georgia qualified private schools. For this purpose, Georgia law allows the establishment of 501(c)(3) Student Scholarship Organizations, also known as SSOs. As an SSO, the organization must use at least 90% of its donations to fund scholarships for qualified needy students attending participating private schools in Georgia for grades pre-kindergarten through twelfth.
Through SSOs, donors may direct donations to the participating private school of their choice. Under Georgia law, 25% of donations not used for the designated year may be carried over to the next year.
To qualify for the scholarship, Georgia law requires that a student be a Georgia resident and enter the qualified private school from a public school. Also, students may qualify by entering the private school initially through a pre-kindergarten or kindergarten program. Students applying for the scholarship must first contact the qualified private school for more information.
Under Georgia Code Sec. 48-7-29.16, in return for a donation to an SSO, married taxpayers filing jointly are allowed a maximum Georgia tax credit of $2,500. Those filing single are allowed a maximum credit of $1,000. Corporations may claim a credit up to 75% of Georgia taxable income. Any unused credit must be carried forward five years. Carrybacks of the credit to prior years are not allowed. If the taxpayer designates the donation for the direct benefit of any dependent of the taxpayer, the credit will not be allowed.
The Georgia General Assembly set a total statewide cap on the tax credit of $50,000,000 per year, and the credit is available to donors on a first come, first serve basis. The donor must go through an application process to obtain preapproval of an intended contribution to an SSO by completing Georgia Form IT-QEE-TP1. Once notice of approval is received, the taxpayer has 30 days to make the contribution. A confirmation of the donation from the SSO must be attached to the Georgia tax return. The donation is also eligible as an itemized deduction on the Federal return, but must added back in determining Georgia taxable income.
For more information on the SSO application process, tax credit, and participating private schools, please contact Stephen Leonard at (912) 234-8243 or sleonard@hancockaskew.com.
You can also get more information on the SSO donation and scholarship process from the Georgia Department of Education's website. Please visit… http://www.doe.k12.ga.us/pea_policy.aspx?PageReq=PEAHB1133
Your donation to a SSO will not only help those in need, but will generate a much needed Georgia tax credit.
