Dear Readers,
I wanted to let you know that we were delighted to hear from Lisa Kelly, President of the Georgia GOAL Scholarship Program, Inc. She was able to let me know of some inaccurate information in the GOAL article, so I wanted to print this correction:
The statement, “Most private schools are considered SSOs – And the citizen or corporation does not need to be related to nor have any direct interest in a student at the school, although in certain circumstances, donations can be driven to benefit a specific student.(source: goalscholarship.org)” is not correct.
First, private schools are NOT considered SSOs.SSOs are separate non-profit 501(c)(3) organizations with which Georgia private schools may participate. Individuals who contribute for a tax credit may designate any private school participating with an SSO.
Secondly, a donation may never be driven to directly or indirectly benefit a specific student.This is a violation of the law under which our program operates. Note the following language contained in Georgia Department of Revenue rules on the Education Expense Credit law: “A contribution directly or indirectly designated for a particular individual, whether such individual is a dependent of the taxpayer or not, is considered made to the individual and not to the SSO and as such is not eligible for the qualified education expense credit. This is consistent with the federal treatment of charitable contributions.”
I wanted all of you to know this so you can make the most of this program and make a Your Smart Money Move today.
Sincerely,
Ted
Today people still don’t understand the difference between a tax deduction (we sometimes call this an ‘above-the-line’ deduction) and a tax credit (we sometimes call this a ‘below-the-line’ deduction), both of which are impacted by the line on your tax return we call taxable income. The important distinction is that a credit is a ‘true’ dollar for dollar reduction of your total tax.
In 2008, Georgia’s elected officials had the remarkable vision to pass the Education Expense Credit law to provide families in our state with access to better educational opportunities for their children. Their legislative leadership resulted in what has been described as the nation’s best education expense credit law. Since inception, the Georgia GOAL Scholarship Program has been leading the way in implementing this important legislation through our ethical, transparent, and proven approach. (source: goalscholarship.org)
For individuals and corporations that pay Georgia state income tax, The Georgia Private School Tax Credit is a relatively unknown tax credit that is written into Georgia law and provides up to a $2,500 tax credit. The law allows private citizens and corporations to receive tax credits for donations to Georgia Student Scholarship Organizations (SSOs). Most private schools are considered SSOs – And the citizen or corporation does not need to be related to nor have any direct interest in a student at the school, although in certain circumstances, donations can be driven to benefit a specific student. (source: goalscholarship.org)
For an individual taxpayer filing a married-filing-separate return, the credit is limited to the amount contributed, or $1,250, whichever is less.
A married couple contributing to GOAL is eligible to receive a credit against their Georgia income tax liability in an amount equal to the amount contributed, or $2,500, whichever is less.
GOAL is proud that 121 of Georgia’s best private K-12 schools have elected to participate in the Georgia GOAL Scholarship Program. The GOAL Participating Schools are located throughout Georgia and serve a diverse cross-section of families and communities. These include schools like Marist and many other prominent schools throughout the state.
What is really fantastic about this tax credit is that if you owed $5,000 of GA state tax, for example, and made this $2,500 charitable donation, the credit would actually lower your state tax by $2,500 to a total owed of $2,500 (it may be slightly different if subject to AMT). Remember, with a normal charitable contribution, you would generally have an ‘above-the-line’ deduction which would be worth far less to you than the $2,500 GOAL credit.
If you want to get this credit, you need to act FAST! The total approved tax credits were limited to $51.5 million in 2012, and as of February 8th, 2013, the Georgia Department of Revenue approved $4,849,671.84 with a huge pipeline yet to be approved. It is expected to be maxed out by the middle of the summer, so get ready to score a GOAL in 2013! (source: goalscholarship.org)
For more information on this tax credit, call Oxygen Financial 1-800-355-9318 or email [email protected]
Written by:
CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Editor in Chief of Your Smart Money Moves
Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice and Services
Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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