C-Corporation Taxpayers

• Divert up to 75% of your GA tax liability
• Establish a convenient and consistent mechanism and incentive for your business to contribute directly to educating Georgia’s children
• Targets educational expenditures directly to families and children in local communities rather than institutions that may reduce the amount of resources going directly to students
• Provides a cost effective method of maintaining philanthropic goals in a much more tax beneficial manner.
• In general, businesses are rewarded by owners, shareholders, equity analysts and financial institutions for minimizing the percentage of income going to taxes because a lower tax burden is associated with sound financial management (even though contributions to Georgia tax credit scholarships would be equivalent to the amount being paid in taxes)
• Under the new IRS adopted ruling, C Corporations are now able to claim the amount expended on the tax credit as a Business Expense instead of a charitable deduction as in previous years
• Two favorable scenarios result from this change:

1. C Corporations no longer have to add the amount of the credit back to income for state tax purposes as that add-back rule only applies to charitable deductions – this results in a positive tax benefit on the State return in the amount of 5.75%

2. By treating the contribution as a business expense, a C Corporation will not be subject to the federal limitations on charitable contribution deductions, which generally cap deductions at 10% of income.