What is Georgia’s Qualified Education Expense Tax Credit Program?

In 2008, Georgia passed legislation that allows taxpayers to donate or redirect a portion of their Georgia income tax liability to qualified private schools in Georgia. The schools then use these funds to provide scholarships for qualified children ranging from Pre-K through 12th grade.

In 2013, Georgia allocated $58 million to fund this program and all of the funds were claimed by the private schools by early May.

How are the Education Expense tax credits awarded?

The Education Expense Tax Credits are awarded on a first-come, first-serve basis and the Georgia Department of Revenue will begin accepting applications on January 1, 2014.

  • Taxpayers may claim a dollar-for-dollar tax credit on their Georgia Income Tax Return and a charitable deduction on their Federal Income Tax Return.
  • A married couple can redirect up to $2,500 ($1,250 for married filing separately and $1,000 for single filers) and C corporations and non-grantor trusts or estates can redirect up to 75% of their Georgia income tax liability.

For taxpayers paying Alternative Minimum Tax (AMT), participating in this program can provide significant tax savings.

New Opportunities for 2014

New legislation now allows owners of pass-through entities (S corporations, LLC’s & Partnerships) to claim a tax credit of up to 6% (maximum of $10,000 per taxpayer) of their estimated Georgia income from pass-through entities. If the spouse is also an owner in a pass-through entity and has earned enough Georgia income from the entity or entities, then the spouse is also allowed a tax credit of up to $10,000, for a total credit of $20,000.

A majority of the private schools have already begun the process for 2014 and can assist you with filling out any necessary forms. Please contact your private school ASAP.

Supporting Schools For Tax Savings

Even if you do not have a child or grandchild that attends a private school, you can still participate. Supporting a school of your choice can lead to significant tax savings.

Below are just a few of the school sponsoring organizations one can use to complete and deliver your application:

If you would like more information on Georgia’s Qualified Education Expense Tax Credit Program or other tax credits & incentives, please contact Jonathan Swartz or call 770.396.2200.