To be successful at the minimum you need to be able to explain the following:
1. The difference between a Tax Credit and a Tax Donation. When someone makes a donation to any non profit it can be taken as a federal tax deduction. That means it lowers their taxable income by the amount that is donated. So if someone has an income of $50,000 a year and they donate $3,000 to a non profit, they only get taxed on $47,000. Contributions to this program are a Tax Credit. A tax credit is much better than a tax deduction. A tax credit is a reduction of a persons actual taxes. So that same person with an income of $50,000 probably has a tax liability of around $1,000. If they contribute $750 to this program, they take a dollar-for-dollar tax credit (reduction) off of state tax liability. So their net cost is Zero, they pay that $750 to the state or to this program.
2. How much a donor can donate. For the tax year 2017, the maximum a married person can donate is $2,177, and $1,089 for a single person. Keep in mind these are maximum amounts. Donations less that these amounts are accepted.
3. The donation deadlines. – Your donors have until April 15th, 2018 to donate and take it off 2017 taxes.
Q. I don’t pay taxes, I get a refund. A. Although some people who are employed don’t have to pay taxes, most people with a job do. Participating in this program has nothing to do with if they are getting a refund or if they owe taxes when they file their return. It has to do with if they have a tax liability. This program lowers your tax liability.
Q. Is this the same as the Public School Tax Credit of around $400.00 A. No, they are totally separate programs. Actually, the state offers many different tax credits. Residents can participate in them all.
Q. I don’t want to participate because it takes money away from the public schools. This is one of those myths that is out there. The truth is that these credits help kids stay in private schools and out of the public school system. If all of the kids who are in private schools poured back into the public school system it would bankrupt the state. This program saves the state money which is one of the reasons why they keep expanding it every year.