Qualified Education Tax Credit

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Imposition, Rate, and Computation; Exemptions
  6. Qualified Education Tax Credit

Checkout our iOS App for a better way to browser and research.

  1. As used in this Code section, the term:
    1. "Eligible student" shall have the same meaning as in paragraph (1) of Code Section 20-2A-1.
    2. "Qualified education expense" means the expenditure of funds by the taxpayer during the tax year for which a credit under this Code section is claimed and allowed to a student scholarship organization operating pursuant to Chapter 2A of Title 20 which are used for tuition and fees for a qualified school or program.
    3. "Qualified school or program" shall have the same meaning as in paragraph (2) of Code Section 20-2A-1.
    4. "Student scholarship organization" shall have the same meaning as in paragraph (3) of Code Section 20-2A-1.
  2. An individual taxpayer shall be allowed a credit against the tax imposed by this chapter for qualified education expenses as follows:
    1. In the case of a single individual or a head of household, the actual amount expended or $1,000.00 per tax year, whichever is less;
    2. In the case of a married couple filing a joint return, the actual amount expended or $2,500.00 per tax year, whichever is less; or
    3. Anything to the contrary contained in paragraph (1) or (2) of this subsection notwithstanding, in the case of an individual who is a member of a limited liability company duly formed under state law, a shareholder of a Subchapter "S" corporation, or a partner in a partnership, the amount expended or $10,000.00 per tax year, whichever is less; provided, however, that tax credits pursuant to this paragraph shall only be allowed for the portion of the income on which such tax was actually paid by such member of the limited liability company, shareholder of a Subchapter "S" corporation, or partner in a partnership.
  3. A corporation or other entity shall be allowed a credit against the tax imposed by this chapter for qualified education expenses in an amount not to exceed the actual amount expended or 75 percent of the corporation's income tax liability, whichever is less.
    1. The tax credit shall not be allowed if the taxpayer designates the taxpayer's qualified education expense for the direct benefit of any particular individual, whether or not such individual is a dependent of the taxpayer.
    2. In soliciting contributions, a student scholarship organization shall not represent, or direct a qualified private school to represent, that, in exchange for contributing to the student scholarship organization, a taxpayer shall receive a scholarship for the direct benefit of any particular individual, whether or not such individual is a dependent of the taxpayer. The status as a student scholarship organization shall be revoked for any such organization which violates this paragraph.
  5. In no event shall the total amount of the tax credit under this Code section for a taxable year exceed the taxpayer's income tax liability. Any unused tax credit shall be allowed the taxpayer against the succeeding five years' tax liability. No such credit shall be allowed the taxpayer against prior years' tax liability.
    1. The aggregate amount of tax credits allowed under this Code section shall not exceed:
      1. Fifty-eight million dollars for the tax year ending on December 31, 2018;
      2. One hundred million dollars for tax years beginning on January 1, 2019, and ending on December 31, 2028; and
      3. Fifty-eight million dollars for the tax year beginning on January 1, 2029, and for all subsequent tax years.
    2. The commissioner shall allow the tax credits on a first come, first served basis.
    3. For the purposes of paragraph (1) of this subsection, a student scholarship organization shall notify a potential donor of the requirements of this Code section. Before making a contribution to a student scholarship organization, the taxpayer shall electronically notify the department, in a manner specified by the department, of the total amount of contributions that the taxpayer intends to make to the student scholarship organization. The commissioner shall preapprove, deny, or prorate the requested amount within 30 days after receiving the request from the taxpayer and shall provide notice to the taxpayer and the student scholarship organization of such preapproval, denial, or proration which shall not require any signed release or notarized approval by the taxpayer. In order to receive a tax credit under this Code section, the taxpayer shall make the contribution to the student scholarship organization within 60 days after receiving notice from the department that the requested amount was preapproved. If the taxpayer does not comply with this paragraph, the commissioner shall not include this preapproved contribution amount when calculating the limit prescribed in paragraph (1) of this subsection. The department shall establish a web based donation approval process to implement this subsection.
    4. Preapproval of contributions by the commissioner shall be based solely on the availability of tax credits subject to the aggregate total limit established under paragraph (1) of this subsection. The department shall maintain an ongoing, current list on its website of the amount of tax credits available under this Code section.
    5. Notwithstanding any laws to the contrary, the department shall not take any adverse action against donors to student scholarship organizations if the commissioner preapproved a donation for a tax credit prior to the date the student scholarship organization is removed from the Department of Education list pursuant to Code Section 20-2A-7, and all such donations shall remain as preapproved tax credits subject only to the donor's compliance with paragraph (3) of this subsection.
    6. In addition to the reporting requirements in Code Section 20-2A-3, each student scholarship organization shall file an annual report with the department showing any fees or assessments retained by the student scholarship organization during the calendar year.
  7. In order for the taxpayer to claim the student scholarship organization tax credit under this Code section, a letter of confirmation of donation issued by the student scholarship organization to which the contribution was made shall be attached to the taxpayer's tax return. However, in the event the taxpayer files an electronic return, such confirmation shall only be required to be electronically attached to the return if the Internal Revenue Service allows such attachments when the data is transmitted to the department. In the event the taxpayer files an electronic return and such confirmation is not attached because the Internal Revenue Service does not, at the time of such electronic filing, allow electronic attachments to the Georgia return, such confirmation shall be maintained by the taxpayer and made available upon request by the commissioner. The letter of confirmation of donation shall contain the taxpayer's name, address, tax identification number, the amount of the contribution, the date of the contribution, and the amount of the credit.
    1. No credit shall be allowed under this Code section with respect to any amount deducted from taxable net income by the taxpayer as a charitable contribution to a bona fide charitable organization qualified under Section 501(c)(3) of the Internal Revenue Code.
    2. The amount of any scholarship received by an eligible student or eligible pre-kindergarten student shall be excluded from taxable net income for Georgia income tax purposes.
  9. The commissioner shall be authorized to promulgate any rules and regulations necessary to implement and administer the tax provisions of this Code section.

(Code 1981, §48-7-29.16, enacted by Ga. L. 2008, p. 1108, § 2/HB 1133; Ga. L. 2009, p. 816, § 6/HB 485; Ga. L. 2011, p. 529, § 2/HB 325; Ga. L. 2013, p. 1061, § 33D/HB 283; Ga. L. 2018, p. 644, § 1/HB 217.)

The 2018 amendment, effective May 7, 2018, substituted the present provisions of paragraph (f)(1) for the former provisions, which read: "In no event shall the aggregate amount of tax credits allowed under this Code section exceed $58 million per tax year."; in paragraph (f)(3), in the third sentence, substituted "preapprove, deny, or prorate" for "preapprove or deny" near the beginning, and substituted "preapproval, denial, or proration" for "preapproval or denial" in the middle; and added paragraph (f)(6). See Editor's notes for applicability.

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 2008, Code Section 48-7-29.13, as enacted by Ga. L. 2008, p. 841, § 1/HB 670, was redesignated as Code Section 48-7-29.14; Code Section 48-7-29.13, as enacted by Ga. L. 2008, p. 942, § 1/HB 1190, was redesignated as Code Section 48-7-29.15; and Code Section 48-7-29.13, as enacted by Ga. L. 2008, p. 1108, § 2/HB 1133, was redesignated as Code Section 48-7-29.16.

Editor's notes.

- Ga. L. 2008, p. 1108, § 3/HB 1133, not codified by the General Assembly, provides that this Code section shall be applicable to all taxable years beginning on or after January 1, 2008.

Ga. L. 2009, p. 816, § 1/HB 485, not codified by the General Assembly, provides that: "This Act shall be known and may be cited as the 'Improved Taxpayer Customer Service Act of 2009.'"

Ga. L. 2009, p. 816, § 8(b)/HB 485, not codified by the General Assembly, provides, in part, that the amendment of subsection (g) by this Act shall be applicable to all taxable years beginning on or after January 1, 2008.

Ga. L. 2011, p. 529, § 3/HB 325, not codified by the General Assembly, provides that the 2011 amendment shall be applicable to all taxable years beginning on or after January 1, 2011.

Ga. L. 2013, p. 1061, § 33E/HB 283, not codified by the General Assembly, provides, in part, that this Code section shall apply to all taxable years beginning on or after January 1, 2013.

Ga. L. 2018, p. 644, § 6/HB 217, not codified by the General Assembly, provides that the amendment of subsection (f) of this Code section "shall be applicable to tax years beginning on or after January 1, 2019."

U.S. Code.

- Section 501(c)(3) of the Internal Revenue Code, referred to in paragraph (h)(1), is codified as 26 U.S.C. § 501(c)(3).

JUDICIAL DECISIONS

Dollar-for-dollar tax credits.

- The tax credit statute, O.C.G.A. § 48-7-29.16, permits Georgia taxpayers to take a dollar-for-dollar credit against their Georgia income tax liability for donations to student scholarship organizations of up to $1,000 per individual taxpayer or $2,500 for married taxpayers filing jointly. Gaddy v. Ga. Dep't of Revenue, 301 Ga. 552, 802 S.E.2d 225 (2017).

Tax credit never becomes property of state.

- It is clear that "tax expenditures" are different from "appropriations," and only the latter involve money taken from the state treasury. The Georgia Qualified Education Tax Credits', O.C.G.A. § 48-7-29.16, represent money appropriated from the state treasury; however, it does not involve the distribution of public funds out of the state treasury because none of the money involved ever becomes the property of the State of Georgia. Gaddy v. Ga. Dep't of Revenue, 301 Ga. 552, 802 S.E.2d 225 (2017).


Download our app to see the most-to-date content.