What is Georgia’s Qualified Education Expense Tax Credit (also known as the Private School Tax Credit Scholarship)?
If you or your company pay any Georgia State Income Tax and would like to have control over how part of this money is used, then the Georgia Student Scholarship Organization (SSO), Inc. – better known as GaSSO – can help you direct some of your tax dollars to private schools for use as scholarships. In May 2008 the State of Georgia passed legislation which allows taxpayers to donate part of their Georgia State Income Tax to approved Student Scholarship Organizations. These funds are then available for use by qualified private schools to provide scholarships for children in K4 through 12th grade. The donor receives a dollar-for-dollar credit against their Georgia State Income Tax liability for their donation. The donation must be pre-approved by the Georgia Department of Revenue (GADOR) as the law mandates a statewide cap of approximately $120 million per year (as of April 2022) in tax credits.
Can the Georgia Private School Tax Credit benefit my student?
Although donors may not specify a particular student, donors can recommend Victory Baptist School (a qualified private school) to receive their scholarship donation. Therefore, everyone at VBS will benefit if a student has relatives/friends who pay Georgia State Income Taxes, and the relatives/friends make a donation to GaSSO (an approved Student Scholarship Organization) and specify VBS as the recommended school fund. The benefits are that the donation cost is essentially zero to the relatives/friends since they receive a dollar-for-dollar credit off their Georgia State Income Tax liability, VBS maintains strong student enrollment, and the scholarship recipient benefits through a reduction of the tuition cost. A student must first apply and be accepted at VBS to apply for a scholarship.
How do I make a donation to receive the dollar-for-dollar credit off my Georgia Income Taxes?
Donors must work with a Georgia Department of Education (GADOE) approved Student Scholarship Organization (SSO). Each approved SSO is a nonprofit 501(c)(3) charitable organization that manages the donations and scholarships/tuition grants under the Georgia Private School Tax Credit law.
GaSSO’s Simple Donation Process
Donors submit their “Pre-Approval” information on GaSSO’s website by following this link: GaSSO’s Online Donation Process
GaSSO will electronically file the donor’s preapproval request with GADOR and will track and receive the approval “Acknowledgment.” Once a donor is approved, GaSSO will inform the donor and accept the donation via a mailed check or their website. After the donation is processed, GaSSO will send the donor the necessary documents for their tax records and will inform the school their donation is available to award as a scholarship.
The donor files the “Acknowledgment” form the following tax year with their Georgia Income Tax return and receives the dollar-for-dollar credit off the Georgia State Income Tax liability (and, if itemizing, possible eligibility to take a charitable contribution deduction on the federal return). The process repeats annually starting January 1 and is available until the entire $120 million in tax credits (as of April 2022) are allocated on a first-come, first-served basis.
How much can I donate and still receive the dollar-for-dollar credit off my Georgia Income Taxes*?
A single individual or a head of household can donate up to $2,500.
A married couple filing separate returns can donate up to $2,500 each.
A married couple filing a joint return can donate up to $5,000.
An individual who is a member of a limited liability company, a shareholder of a Subchapter ‘S’ corporation, or a partner in a partnership, may claim a credit up to $25,000 per tax year (or up to 75% of the GA income tax liability).
A corporation paying GA Income Tax can donate up to 75% of its GA income tax liability.
*The tax credit is not allowed to exceed the taxpayer’s actual tax liability.
Who is eligible to receive a GaSSO Tax Credit Scholarship?
To qualify as an “eligible student” for receiving scholarships, the student is required to attend a Georgia public school for at least six weeks prior to receiving a scholarship unless they are one of the following:
• Eligible to enroll in first grade, kindergarten (K5), or pre-kindergarten (K4)
• Zoned to attend a public school that the Georgia Office of Student Achievement determines to be a low-performing school
• The “subject of officially documented cases of school based physical violence or student related verbal abuse threatening physical harm”
• Enrolled in a “home study program meeting the requirements of [the state of Georgia] for at least one year immediately prior to receiving a scholarship”
• Previously received a scholarship in this program and has not graduated, reached the age of 20, or returned to a public school since receiving that scholarship
How do I apply for a Tax Credit Scholarship?
Scholarships are awarded upon recommendations from the VBS Scholarship Committee. Scholarship applications (including complete scholarship policy guidelines) are available from the VBS office.
Links
Georgia Student Scholarship Organization (SSO), Inc. – georgiasso.com
Georgia Department of Education – gadoe.org (search for “Georgia Private School Tax Credit”)
Georgia Department of Revenue – dor.ga.gov (search for “Qualified Education Expense Tax Credit”)
Neither Victory Baptist School nor GaSSO, Inc. warrants or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, product or process disclosed. Neither VBS nor GaSSO, Inc. provides or offers tax, accounting, or legal advice. Please consult a qualified advisor for your particular situation.
