Deadline: Act Quickly to Take Advantage of Tax Savings
By Joe Nagel, Esq., LLM, CPA
Direct your Georgia income tax dollars to private elementary and high schools (receive dollar for dollar tax credit for amounts contributed to charity) and still get a federal tax deduction to save more federal tax. If you itemize, this is a “no brainer”!
Georgia Statute 48-7-29.16 establishes an income tax credit for taxpayer funds used to support a qualifying student scholarship organization. Two examples are the Georgia GOAL Scholarship Program for 107 of Georgia’s private schools and the GRACE Scholar program for Catholic Schools in Georgia.
Participants can give up to $1,000 per individual or $2,500 for married taxpayers filing a joint return. For each dollar given, Participants will get a dollar of credit against their Georgia income taxes. In addition, Participant’s, depending on their circumstances (whether they itemize or are subject to the AMT), may be entitled to take federal charitable deduction for the contribution. For example, if a Participant contributes $1,000, she will get a $1,000 credit against her Georgia taxes and possibly a $1,000 charitable deduction for federal income tax purposes.
There is virtually no downside to taking this credit. The Georgia credit allows you to simply redirect taxes you would otherwise pay to a scholarship program of your choice. The federal charitable contribution deduction may reduce your federal taxes. This is a no lose proposition.
To take advantage, Participants must fill out Georgia Department of Revenue Form IT-QEE-TP1 and submit it by November 1st (in order to assure that you will receive your confirmation back from the State of Georgia timely). The participant should receive a confirmation that their contribution has been accepted. Once received, the confirmation should be sent along with a check for the contribution amount to the scholarship program of the Participant’s choice.
The Georgia Department of Revenue is required to provide pre-approval within 30 days of submission of the form. Therefore, to ensure you have sufficient time to make your contribution by year end, submit your application to the Georgia Department of Revenue in early November.
The form takes about ten minutes to fill out. If you need help, contact us at 404-255-7400 or info@hoffmanestatelaw.com. This is one of those tax items that is “too good to be true” but it works!
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