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Georgia Private School Tax Credit – Time Is Running Out!

Time is running out for one of the easiest ways to save on your state and federal income taxes!  The Georgia Private School Tax Credit law is very close to hitting its maximum funding, so don’t get locked out!  Out of $58 million approved for this program, less than $4 million in contributions may be remaining.

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 tax.  If you itemize, this is a win-win situation.

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.  A full listing of all student scholarship organizations can be found at the Georgia Department of Education’s website at http://www.doe.k12.ga.us/External-Affairs-and-Policy/Policy/Documents/SSO%20List.pdf

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 (see https://etax.dor.ga.gov/inctax/2011_forms/TSD_HB-1133_FORM_IT-QEE-TP1.pdf) and submit it AS SOON AS POSSIBLE (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 form takes about ten minutes to fill out.  For more information or for assistance please contact Joe Nagel in our office at 404-255-7400 or visit our website at www.hoffmanestatelw.com.  This is a tax benefit that seems “too good to be true” but it works!

In accordance with IRS Circular 230, this article is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purpose. The information contained herein is provided “as is” for general guidance on matters of interest only. Hoffman & Associates, Attorneys-at-Law, LLC is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. Before making any decision or taking any action, you should consult a competent professional advisor.