The Georgia GOAL Scholarship Program provides for the creation of state approved Student Scholarship Organizations (“SSOs”) that use Georgia income tax credit-eligible contributions to provide financial assistance to students wishing to enroll into a private school. This program enables Georgia residents, corporations, and trusts the opportunity of redirecting all or a portion of their Georgia income tax payments to GOAL in return for an income tax credit, which is more than a mere tax deduction, against their Georgia income taxes for the amount of the contribution. Thus, if a married couple filing a joint return owes $6,000 of Georgia income taxes and makes the maximum contribution to GOAL of $2,500, they will only have to pay $3,500 of income taxes to the state Georgia.
For the 2014 tax year, there are important new provisions in the Georgia GOAL Scholarship Program whereby:
• An individual taxpayer that owns all of or a portion of an S Corp, LLC, or partnership (pass-through entities) may receive a maximum tax credit of $10,000, regardless of ownership in multiple pass through entities;
• If the taxpayer’s spouse is also an owner in a pass through entity (or entities), the couple may be allowed a tax credit of $10,000 each, for a total of $20,000;
• Applicants must provide the amount that represents 6% of their estimated Georgia income from the pass through entity (or entities). All Georgia income, loss and expense from the taxpayer selected pass through entities will be combined to determine Georgia income for purposes of the credit. Such combined income shall be multiplied by 6% to determine the tax that was actually paid.
• Please note: 6% of the Georgia income from pass through entity (or entities) is the maximum amount that may be claimed as a tax credit, and any excess amounts may not be claimed in the current year and may not be carried forward. To make this somewhat simpler, the taxpayer’s Georgia income from pass through entities must be at least $166,667 to take advantage of the full $10,000 tax credit ($166,667 * 6% = $10,000).
Georgia tax credit limits for 2014 are as follows:
Tax Filing Status Tax Credit Limit
Individual Filer – Up to $1,000
Married Filing Jointly – Up to $2,500
Married Filing Separately – Up to $1,250
Individual Owners of S-Corp, LLC or Partnership (Pass-through entity) – Up to $10,000
C Corporation or Trust – Up to 75% of Georgia tax liability
In order to qualify for the tax credit, you must apply to reserve your spot for the 2014 tax credit and then make payment within 60 days of your approval.
If you would like to set up an appointment or conference call to discuss how this program can help you, please contact Credo Financial Services at 678-242-5230, and we will be more than happy to assist you.