Redirecting your Georgia State Tax Liability and other Tax Savings Ideas

Written by Firethorn Wealth Partners

October 19, 2021

We are fortunate in the Augusta area to have a many diverse and flourishing private schools. These schools rely heavily on private donations to operate. Georgia has created a program that allows you to donate to these schools and receive a dollar-for-dollar credit against your Georgia state income tax liability. It is important to note that there are 19 state scholarship tax credit programs currently in existence (click HERE for a list) that include our neighbors in Alabama, South Carolina, and Florida.

Here are some details about the Georgia Goal Scholarship Fund.

What is GOAL?

In 2008, the Georgia General Assembly created the program to provide deserving families the opportunity for financial assistance to attend private schools. The program has been lauded as the nation’s best education expense tax credit law. GOAL sets guidelines for applicant household income and scholarship which have been voluntarily embraced by the participating private schools. The scholarships are funded by voluntary contributions from taxpayers and corporations which result in a dollar- for-dollar reduction in the donor’s state income tax liability.

What schools are participating in Georgia GOAL Scholarship Program?

The list of GOAL Participating Schools is accessible on the GOAL website

How does the Qualified Education Expense Tax Credit work?

Every year the state legislature sets aside a limited amount ($100 million for 2022) available to the program. A taxpayer who is interested in contributing must be pre-approved by the Georgia Department of Revenue. This is done by submitting an application to GOAL specifying the amount of the contribution and designating one or more schools as the recipient.

GOAL will then communicate approval and the timing of the contribution. Contributions must be made within 60 days of approval and by December 31st to reduce the current year’s tax liability. Contributions are made directly to GOAL and the program then forwards the funds to the designated school(s).

Documentation is provided to taxpayers for claiming the tax credit when taxes are filed. It is important to note that the contribution is treated as a credit and not a deduction. The credit reduces taxes dollar for dollar while a deduction reduces the taxable income upon which taxes are calculated.

How much can I contribute?

A married couple can redirect up to $2,500.

A single individual can redirect up to $1,000.

S Corporations, LLCs, or partnerships that elect to pay at the entity level may direct up to 75% of the Georgia income tax liability. This is new for this year and a significant benefit to small business owners that support private schools.

How do I find out more about GOAL?

Please reach out to us and most importantly talk to your tax advisor. You can find out more information at the GOAL