Qualified Education Donation Tax Credit
Beginning on January 2, 2018, the Qualified Education Donation Tax Credit allows individuals and corporations to donate to the Innovation Fund Foundation, Inc. (IFF) and receive a dollar-for-dollar tax credit (not just a deduction) on their state income taxes, subject to availability. The Foundation is authorized to receive up to $5 million through this tax credit on a first come, first served basis.
How will the Innovation Fund Foundation, Inc. Use Donated Funds?
The Innovation Fund Foundation, in accordance with state law, will use donated funds to provide grants to public schools to improve student achievement, with a priority on serving schools identified in the bottom 5% of performance. The Innovation Fund Foundation plans to develop a competitive grant program – modeled after the Innovation Fund Accelerator– that builds the capacity of schools and districts to develop programs that directly target the root causes of complex education problems.
What is the Innovation Fund Foundation, Inc?
The Innovation Fund Foundation is a 501(c)3 non-profit corporation authorized pursuant to O.C.G.A. § 20-14-26.1. The Foundation supports the work of the Governor’s Office of Student Achievement in supporting eligible organizations as they develop, pilot, implement, and scale innovative education programs. The Foundation is also authorized to receive donations from taxpayers pursuant to O.C.G.A. § 48-7-29.21.
How Do I Donate and Receive the Tax Credit?
Donating and receiving the Qualified Education Donation Tax Credit is a five-step process. These steps include:
1) Set Up an Account: Set up an income tax account on the Department of Revenue’s Georgia Tax Center. These instructions outline the steps to create a Georgia Tax Center account. If you already have a Tax Center account, begin at Step 2.
2) Request Pre-Approval:
a) Request pre-approval to receive the tax credit by electronically submitting Form IT-QED-TP1 through the Georgia Tax Center. This step-by-step guide outlines how to request pre-approval.
b) Within 30 days from the date Form IT-QED-TP1 is received, the Department of Revenue will notify each taxpayer and the Innovation Fund Foundation via mail of the pre-approved contribution amount.
NOTE: The tax credit is granted on a first come, first served basis based on the date the Department of Revenue receives Form IT-QED-TP1. Taxpayers should not make a donation prior to receiving pre-approval confirmation from the Department of Revenue.
3) Mail Donation to the Innovation Fund Foundation: Within 60 days from the date of receiving pre-approval, the taxpayer can mail a check for up to the pre-approved amount to the Innovation Fund Foundation. Any donated amount exceeding the pre-approved amount will be considered a tax-deductible gift (rather than the full tax credit). If taxpayers donate less than their pre-approved amount, those credits do not become available to other taxpayers. Therefore, taxpayers should only request preapproval for credits they intend to use.
Please mail your contribution and a copy of your pre-approval letter directly to the Innovation Fund Foundation at the below address:
Innovation Fund Foundation
c/o Qualified Education Donation Tax Credit
205 Jesse Hill Jr. Drive SE
Twin Towers East
Atlanta, GA 30334
4) Receive Form IT-QED-FUND1: Within 15 days of receiving your donation, the Innovation Fund Foundation will provide you a letter of confirmation (Form IT-QED-FUND1).
5) Claim Your Tax Credit: Complete and submit Form IT-QED-TP2 with your Georgia tax return to claim the tax credit.
Is There a Limit on How Much I Can Donate?
Yes. Please see below for the contribution limits. Please note, tax credits are only available until the annual $5 million cap is reached.
- A married couple filing a joint return can redirect up to $2,500 of their income tax payments to the Innovation Fund Foundation.
- A married couple filing a separate return can redirect up to $1,250 (each) of their income tax payments to the Innovation Fund Foundation.
- A single individual can redirect up to $1,000 of his or her income tax payments to the Innovation Fund Foundation.
- For "C" corporations, the tax credit is available up to 75% of their annual Georgia income tax liability.
- Members of limited liability companies, shareholders of "S" Corporations, and partners in partnerships are allowed a Georgia income tax credit for up to $10,000 of the amount they contribute to the Innovation Fund Foundation, so long as they would have paid Georgia income tax in that amount on their share of taxable income. More details on corporate donations are available on p. 2 of the Department of Revenue rule available here.
What is the Difference Between the Qualified Education Expense Tax Credit and the Qualified Education Donation Tax Credit?
The Innovation Fund Foundation tax credit is called the “Qualified Education Donation Tax Credit” in law. Another tax credit with a similar name, the “Qualified Education Expense Tax Credit,” exists. The “Qualified Education Expense Tax Credit” provides tax credits for taxpayers that donate to Student Scholarship Organizations that provide scholarships for students to attend qualified private schools. It is administered by the Georgia Department of Education. More details regarding each credit are available below.
Qualified Education Donation Tax Credit
The Qualified Education Donation Tax Credit allows eligible private citizens and corporations to receive tax credits for donations to the Innovation Fund Foundation. The Innovation Fund Foundation will use these funds to provide grants to public to improve student achievement. For more information, refer to O.C.G.A. § 20-14-26.1, O.C.G.A. §48-7-29.21 and Revenue Regulation 560-7-8-.60.
Qualified Education Expense Tax Credit
The Qualified Education Expense Tax Credit (also known as the Georgia Private School Tax Credit) allows eligible private citizens and corporations to receive tax credits for donations to Student Scholarship Organizations (SSOs). SSOs will provide student scholarships to parents of eligible children who plan to attend private schools. Taxpayers must request pre-approval to claim this credit on Form IT-QEETP1. For more information, refer to O.C.G.A. § 48-7-29.16 and Revenue Regulation 560-7-8-.47.
If I Have Questions About the Tax Credit, Who Do I Contact?
For questions regarding how to request pre-approval for or receive the tax credit, individuals or corporations should call the Georgia Department of Revenue at (877) 423-6711 between 8:00 AM and 5:00 PM Monday through Friday. For questions regarding how the Innovation Fund Foundation plans to use donated funds, please contact the Innovation Fund Foundation at firstname.lastname@example.org or (404) 904-5544.