Not many realize that Georgia is a leader in education support for Private schools!
On January 1, 2008, Georgia enacted a law that allows private citizens to donate up to $2500 per year to a Qualified Student Scholarship organization (a 501 c3) and receive a full tax credit against Georgia tax liabilities for having made the donation. Corporations may contribute up to 75% of the amount equal to or less than their Georgia tax due in any one year.
The credits are subject to conditions that are:
1. Must be used to pay for tuition only to the qualifying school.
2. Must be used by a qualifying school, defined as a private primary or secondary school
a. That is accredited by accreditation agencies recognized by Georgia
b. Is located in the State of Georgia
3. Must be paid to a Student Scholarship organization that is:
a. Exempt from tax under 501©3 of the IRC
b. Provides scholarships to eligible students without limiting the amounts to one school.
4. Eligible Students are Georgia residents that are enrolled in a primary or secondary public school or eligible to enrolled in a qualified kindergarten or pre-kindergarten program.
These Student Scholarship Organizations must:
1. Report to the State the amount annually that it has received, a list of Donors, and a copy of its annual audit to the State.
2. It must obligate 90% of its annual revenue for scholarships paid.
3. Must segregate and report operating funds (10%) vs. scholarship funds (90%)
4. May transfer funds to another SSO.
5. Must conduct annual audits.
Individuals and Companies are joining the effort to improve student education while not having to fight controversial voucher programs. Parents contributing and receiving credits are not excluded from having their children included in the scholarship funding, but their contribution cannot be subject to this occurring. Companies are also allowed to install matching programs, in addition to direct contribution programs, to encourage their employees to donate and receive these credits.
We believe this is an excellent example of Public/Private partnerships that can make a sincere difference on improving education in Georgia, and many other states that are doing this as well.
As always, if you would like to discuss this further, give your engagement manager a call and we can help you investigate this further.