By: Lisa M. Wood, CPA, MT - Director of Tax
In 2021, Ohio enacted a tax credit for individuals and businesses who donate to a Scholarship Granting Organization (SGO). At that time, very few organizations were certified as SGOs, however, the list of qualified organizations expanded greatly in 2022.
Taxpayers can claim a non-refundable credit for monetary donations to an eligible SGO.
- The credit amount is the lesser of
- $750 per taxpayer or
- the total amount donated to SGOs during the year
- A married couple filing jointly can claim up to a $1,500 credit.
- To provide the proper accounting trail, each spouse must write and sign separate checks for their contributions
Eligible institutions must be certified through the Ohio Attorney General’s Office. A list of SGOs can be found online here
Requirements to be classified as an SGO include
- Be a nonprofit organization exempt from federal taxation under Internal Revenue Code §501(c)(3)
- Primarily award scholarship for students to attend grades K-12
- Prioritize awarding scholarship to low-income students
This credit is a great option for taxpayers who wish to contribute to funding primary and secondary education. For every dollar contributed up to the $750 limit, Ohio will refund the amount of the donation. Taxpayers who itemize can actually get an additional federal charitable contribution deduction, so they are getting more of a benefit than the amount of money they are donating.