TAX CREDIT SCHOLARSHIPS

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USE YOUR TAX MONEY TO MAKE A BIG IMPACT AT NO COST TO YOU!

 

The Alabama Accountability Act (AAA) and Scholarships for Kids authorize donation-funded scholarships that enable low-income students, often zoned for failing schools, to attend qualified private schools.  These scholarships are granted by specially created Scholarship Granting Organizations (SGOs) for the sole purpose of taking private donations and awarding them to low-income students in schools that have qualified to receive funds. MHBS receives funding from Scholarships for Kids, a state-approved Scholarship Granting Organization under the Alabama Accountability Act of 2013.

The Alabama Accountability Act currently establishes an annual $30 million statewide limit on the tax credits. The credits are awarded on a first-come, first-served basis, and may be carried forward for 3 years. Through this exciting program, more students can have the opportunity for a life-changing education at MHBS.

How Can You Help?

 

Individual taxpayers 

Individual taxpayers are able to redirect 50% of their Alabama state tax liability to Scholarships for Kids and receive a dollar-to-dollar tax credit in return.  The annual maximum tax credit available on an individual return is $50,000.

 

The Alabama Accountability Act currently establishes an annual $30 million statewide limit on the tax credits.  The credits are awarded on a first-come, first-served basis, and may be carried forward for 3 years.

 

Donating Quarterly: Those who make quarterly tax payments can donate 50% of each quarter’s tax liability to Scholarships for Kids with no penalty, not to exceed $50,000 annually, and receive a dollar-for-dollar state tax credit.

 

Learn How: Step-By-Step Guide

Scholarships for Kids Website

Tax Credit Scholarship Brochure

2020-2021 Annual Report

My Alabama Taxes Website

 

Please consult your accountant or tax advisor regarding the Scholarships for Kids program. For more information, please contact Melissa Moore, Business Office Manager at mmoore@mhbs.org or 256-767-1203 ext. 2028. 

C Corporations

“C” Corporations are able to redirect 50% of their Alabama state tax liability to Scholarships for Kids and receive a dollar-to-dollar tax credit in return, and there is no maximum. The Alabama Accountability Act currently establishes an annual $30 million statewide limit on the tax credits.  The credits are awarded on a first-come, first-served basis, and may be carried forward for 3 years.

Learn How: Step-By-Step Guide

Scholarships for Kids Website

Tax Credit Scholarship Brochure

2020-2021 Annual Report

My Alabama Taxes Website

 

Please consult your accountant or tax advisor regarding the Scholarships for Kids program. For more information, please contact Melissa Moore, Business Office Manager at mmoore@mhbs.org or 256-767-1203 ext. 2028. 

Pass-Through Entities 

Pass-Through Entities (“S” Corporations, partnerships, and LLCs) can donate up to 50% of their Alabama income tax liability to Scholarships for Kids and potentially receive a federal benefit as well.

New regulations could allow your business to make a donation to Scholarships for Kids with the full state income tax credit, and in addition, treat it as a business expense for federal tax purposes.  In other words, your business could reduce its taxable income with a deductible expense on the federal side, and you could reduce your personal Alabama state income tax liability dollar-for-dollar in the amount of your business’s donation. The net effect is potentially a combined federal and state tax benefit greater than the total dollar amount of the donation.

Any assessment of whether your business could meet the provisions of the new regulations must be based on your particular facts and circumstances. Please consult your accountant or tax advisor regarding this possibility.

Learn How: Step-By-Step Guide

Scholarships for Kids Website

Tax Credit Scholarship Brochure

2020-2021 Annual Report

My Alabama Taxes Website