Most people don’t realize that they can actually send some of their Georgia State income tax payment to a private school instead of the state. And, because of a federal tax deduction, you can actually make money by doing it!
This program has been in place since 2008, and is a result of the Qualified Education Expense (QEE) Tax Credit bill (HB 1133). It works by creating an entity called a Student Scholarship Organization (or, since everything has to have an acronym, an SSO) that accepts donations and awards scholarships to students currently enrolled in a public school to enable them to attend a private school of their parents’ choosing. These donations become a tax credit on your state tax return (meaning you can take the donation off your total State tax bill) and a charitable donation for your Federal tax.
Most private schools in Georgia, including many Christian schools, have jumped into the program, and while you cannot specify which child gets the scholarship you can specify the school.
Thinking there must be a catch? Well, the only catch is that there are limits to your donation ($2,500 for married filing jointly) and a limit on the total funds available. Each year the program runs out of money so you will not be allowed to donate the full amount. You have to be pre-approved by the GA Department of Revenue and, once accepted, make your donation early next year. Sorry – you missed the opportunity for making a donation in 2017, but apply now and your 2019 self will thank you when you are filling out your 2018 tax return. The state will let you know early next year how much you can give based on the total funds available and the number of people who applied.
In fact, I shouldn’t even be telling you about this program, because the more people that participate the less money I can contribute. Each year I submit a request to donate the full $2,500. In 2010 I got the full $2,500. But by 2015 I was only approved for $1,585. In 2016 it was down to $1,334 and this year I only was allowed to donate $1,237. There was a bill last year to increase the credits available (HB 217) but it didn’t pass the Legislature.
To participate in this program you have to work with an SSO, which will put your name on a list, submit it to the state in January 1 of next year, and send you the paperwork for the deduction on your federal taxes. The state of Georgia has a list of qualifying organizations and a bunch more information about the program on the official website:
Since I am writing this post and can say just about anything I want, I will tell you that the SSO I have used for many years now, and been very happy with, is a company called Georgia Goal Scholarship Program. They make it ridiculously easy, and they are taking names right now that they will submit to the state on January 1, 2018. Not to say that some of the others aren’t just as good, I just cant vouch for them. Georgia Goal also has an extensive FAQ section on their website.
One final note – companies can participate as well. The rules are a little different, but there is a higher cap on the amount of the donation based on your corporate tax bill.