The Qualified Education Expense (QEE) Tax Credit in Georgia is a great opportunity for individuals as well as corporations to contribute to educational institutions. In return, they receive tax benefits or tax credits. Upon donating to qualified Student Scholarship Organizations (SSOs), you can receive a dollar-for-dollar tax credit.
As of 2024, individuals can claim up to $2,500, while married joint filers can receive up to $5,000 in credits. If you are an entity or corporation, you can contribute up to $25,000. However, the process can be complex and requires pre-approval from the Georgia Department of Revenue. It is important to consult with a CPA in Alpharetta, GA, to maximize your benefits.
What is the Qualified Education Expense tax credit in Georgia?
As already mentioned in the introduction of the article, the Qualified Education Expense tax credit or QEE allows you to get tax incentives in exchange for contributions made to student scholarship organizations (SSOs) providing scholarships to students attending private schools.
The amount of tax credit you can claim depends on your tax filing status. Here are some things to keep in mind:
- Single individuals or heads of households can claim up to $2,500 per year.
- Married couples filing jointly can claim up to $5,000 per year.
- For married couples filing separately, each spouse can claim $2,500 per year.
For the 2024 tax year, there is a total of $120 million in credits available for the entire year. Therefore, make sure you apply as soon as possible to claim yours.
What are some benefits for QEEC donors?
Donors of the QEEC get various benefits, including the following:
1. Donors receive direct tax savings.
Donors participating in the QEEC receive an equal amount of tax savings as they donate. Therefore, they receive a direct reduction in tax liability. This means any amount that you contribute to such educational initiatives directly reduces the total amount of taxes you owe at the end of the year.
2. Donors have a choice in supporting schools.
There are thousands of private schools across the nation. However, the QEE does not force you to contribute to specific ones. Although you cannot choose the specific students who will receive these scholarships, you can choose the school. Therefore, you are allowed to choose an educational institution that aligns with your values.
3. There is increased funding for student scholarships.
Contributions made through the QEEC program are for students belonging to the low and middle-class families of the state. Therefore, you can rest assured that your money is going to the right place. Underprivileged students can attend private schools with the funds you contribute and receive a quality education.
4. The program encourages charitable giving.
The QEEC program was designed to encourage high-earning individuals or corporations to donate to underprivileged students. By providing an incentive to help these children, the government of Georgia has successfully made a great effort to foster a culture of charitable giving. This program does not only aid the receivers but the donors as well.
5. QEEC has an increased impact.
Unlike direct donations made to specific schools, the contributions made through the QEEC programs are collectively pooled within School Support Organizations (SSOs). This pooling allows the government to collect a larger sum of money and provide overall stronger support to schools. In brief, individual donations, when combined, become more effective.
Maximize your tax credit!
The Georgia government is making a substantial effort to help students get the education they deserve regardless of their financial background. If you want to help underprivileged children and get some benefits in return, this is the perfect opportunity for you to do so.
However, understanding the laws can be a complicated process, and you will encounter various obstacles on your path. This can be made easy by hiring a CPA and using their expertise to maximize the benefits. Consult with a financial expert today!