Equipping your kids with a good education is without a doubt one of your top priorities as a parent. However, the cost of education can sometimes be overwhelming. Thankfully for Indiana residents, there’s the SGO Tax Credit program, an initiative that helps Indiana parents fund their children’s education.
Here, we’ll provide an overview of the SGO Tax Credit program, its restrictions, and the benefits to help you plan for your child’s school year.
What Is Indiana’s School Scholarship Tax Credit?
Indiana School Scholarship Tax Credit Program is a state initiative aimed at helping families fund the cost of their children’s education. SGO stands for Scholarship Granting Organizations, and they are private charitable organizations established to help Indiana families pay for their children’s tuition.
SGOs use donations to fund scholarships for students to attend either a public school, a private school, or a combination of both. As certified by the Indiana Department of Education (IDOE), donors are to receive 50% credit against their individual or entity’s Indiana state tax liability.
Indiana SGO Tax Credit Program Restrictions
In the face of its generous benefits, the Indiana School Scholarship Tax Credit program also has restrictions.
Indiana SGO Credit Program is only available for contributions to students who will be attending public or nonpublic elementary schools (grades K-8) or high schools (grades 9-12). Therefore, it will not extend to universities, colleges, or other tertiary-level institutions.
Also, despite not having any restrictions on the size of the contributions, the Indiana School Scholarship Tax Credit program has an upper limit of $18.5 million for this fiscal year ending on June 30, 2023.
Also, a benefactor has the freedom to donate to a specific school but SGOs are not allowed to donate to any specific students. Parents must apply for SGO-funded scholarships at any of the participating schools.
SGO donations are given to eligible students with an annual household income of less than 300% of the amount required to qualify for the Federal Free or Reduced-Price Lunch Program. SGOs will then award scholarships to eligible students in qualifying schools but they also have the liberty to introduce certain provisions for the scholarships they provide.
SGO Tax Credit Program Benefits
Knowing the many benefits of the SGO Tax Credit program can make your parenting journey easier. Here are some of the top benefits:
1. Your Triple Tax Benefit
When you donate to SGOs, you get a triple tax benefit. Not only will you get your federal tax return, but you are also eligible to receive a charitable tax deduction for the contribution. On top of the federal tax deductions, through the SGO program you can give appreciated stock, hence stacking your tax benefits and creating a triple tax benefit.
2. How To Take Advantage Of This Triple Tax Break
If you plan on taking advantage of this triple tax benefit, you must remember that Indiana has awarded $18.5 million in SGO tax credits for the fiscal year ending on June 30, 2023. To maximize your SGO tax credits and get the most out of your tax deductions, it’s best to start with SGO donations as early as possible as it will be on a first-come-first-served basis. If you want more information on the gifting instructions, the list of participating institutions, and general information about the program, please visit www.in.gov/dor/4305.htm.
More Resources For Planning Your And Your Child’s School Year
Finding the best educational option for your children can be a challenge. To help you make your decisions, Central Christian Academy has put together a variety of resources to help parents plan their and their children’s school year.
With the guidance of Central Christian Academy, you can confidently move forward with your child’s education plan in hopes of receiving the best education for them without sacrificing your financial stability.
For more information on SGO tax credits, school curriculum, and how to best prepare your children for their education journey, visit our resources page to learn more.
Central Christian Academy: Preparing Students for a Christ-Centered Life
Providing the best education for your children is of utmost priority. Whether you plan on taking advantage of SGO tax credits or not, Central Christian Academy offers parents and their children the best possible school environment for a Christ-centered life.
Central Christian Academy provides students with both academic excellence as well as a holistic growth experience. With SGO tax credits, you can get the most out of your taxes while offering your child a well-rounded education that will prepare them for life.
Learn more about our admissions process and start preparing your child for lifelong learning.