What exactly is the Oklahoma Equal Opportunity Education Scholarship Act?
The Oklahoma Equal Opportunity Education Scholarship Act (68 Okla. Stat. §2357.206) (“Scholarship Act”) allows individuals and businesses to receive Oklahoma state income tax credits for donating to a scholarship granting organization (“SGO”) recognized by the Oklahoma Tax Commission. The SGO then uses those contributions to provide scholarships for eligible students to attend a private school.
What is GO for Catholic Schools Inc.?
GO for Catholic Schools, Inc. (“GO”) is a scholarship granting organization that awards scholarships so that students with financial need can attend one of the twelve Catholic schools in the diocese of Tulsa. GO for Catholic Schools is an independent 501(c)(3) organization established to benefit Catholic Schools in the Diocese of Tulsa. The tax identification number for GO for Catholic Schools, Inc. is 45-5517541.
What is a tax credit? *
Tax credits directly reduce the taxes you pay on a dollar-for-dollar basis. An Oklahoma state income tax credit is like a gift card from the State of Oklahoma that you can use to pay your state income taxes. For example, with a $1,000 tax credit from the State of Oklahoma, you can pay $1,000 in state income taxes.
What is a tax deduction? *
Tax deductions reduce the base of taxable income upon which you pay taxes, which translates into a reduction on the amount of taxes that you pay; however, the value of tax deductions depends upon a number of factors specific to each taxpayer, including your taxable income which determines your tax rate, whether you itemize deductions, the application of phase outs of certain deductions, and whether the alternative minimum tax applies to you.
How is a tax credit different from a tax deduction? *
Both tax credits and tax deductions help to minimize the overall taxes you pay, but tax credits are much more valuable because they directly reduce taxes dollar-for-dollar.
Who is eligible to receive a tax credit? *
Individuals and legal business entities (corporations, limited liability companies and partnerships) can contribute to the GO for Catholic Schools Scholarship Fund and receive a state income tax credit from Oklahoma. Individuals can receive up to a $1,000 tax credit annually, married couples can receive up to a $2,000 tax credit annually, and legal business entities can receive up to a $100,000 tax credit annually.
How much of a tax credit will I get? *
The maximum amount of the tax credit depends on a number of factors, some which you can influence and others that are outside of your control but which GO and the other SGOs in the state are seeking manage. The factors that you can control are the size of your contribution this year and whether you are willing to commit in writing to donate the same amount for two consecutive years. If you make a single contribution, your maximum tax credit will be 50% of the amount of your contribution. However, if you are willing to commit to contributing the same amount for two consecutive years (i.e. 2016 and 2017), then your maximum tax credit jumps to 75% of the amount of each contribution! The factor you cannot control is how much others will donate to SGOs during a particular year. Currently, $3.5 Million in annual tax credits (“Annual Tax Credit Cap”) are specifically provided for in the Scholarship Act and that amount automatically replenishes each year. In other words, it does not matter how many tax credits were awarded to SGOs in any prior years; only the current year matters in terms of the cap on tax credits. If the total tax credits to be earned from contributing to SGOs in the state this year were to exceed the Annual Tax Credit Cap, the amount of each donor’s tax credit would be diminished on a pro-rata basis so as not to exceed the Annual Tax Credit Cap. All SGOs are required to file a report with The Oklahoma Tax Commission in January of each year detailing contributions received during the prior calendar year, so the Tax Commission can determine the actual percentage of tax credit available to all donors.
When can I use my tax credit? *
Tax credits received from donating to GO may be used in the immediately following year. For example, tax credits received from donating to GO in 2016 may be used to offset income taxes on your 2016 Oklahoma tax return filed in 2017. In addition, any tax credit not used in a given tax year may be carried over for up to three years. The tax credit is not refundable; you must use it as an offset to Oklahoma income taxes.
How will scholarship recipients be selected?
Each student applying to one of the twelve Catholic schools in the Diocese of Tulsa is eligible to apply for a scholarship from GO and scholarships will be awarded to both Catholic and non-Catholic students alike. Acceptance into the Catholic school is a prerequisite that must be met before a student will be considered for a GO scholarship. The only other criteria for receiving a scholarship from GO is the student’s demonstrated level of financial need for which GO will rely solely upon family household income and size of family as a proxy. Students with the highest level of financial need will receive larger scholarship awards.
How large will scholarship awards be?
Under the Scholarship Act, an eligible student may receive up to $5,000 (or, if greater, 80% of the statewide annual average per-pupil expenditure as determined by the National Center for Education Statistics of the U.S. Department of Education. The actual scholarship amount will depend upon a number of factors, including GO’s success in raising funds each year (which will determine the amount of money available for scholarships in the following academic year), the number of eligible students that apply for scholarships, and the level of financial need of the eligible students.
How will scholarship awards be announced and paid?
GO will notify scholarship recipients of award amounts by October 1 of each calendar year. Scholarship funds will be provided by check made payable to the scholarship recipient and delivered to the Catholic school where the student is enrolled.
How can I make a contribution to GO for Catholic Schools Inc.?
The easiest way to contribute is by going online to GOforCatholicSchools.com/Donate. You may pay via credit card or check. You may also complete a manual donation form and send it with your check or credit card information to:
GO for Catholic Schools
c/o Bishop Kelley High School
3905 South Hudson Avenue
Tulsa, OK 74135.
Note: Donations made by credit card incur a processing fee of 2 to 3%, but GO will absorb the fee and the entire amount donated (including the processing fee) counts as your donation for purposes of calculating both the state income tax credits you earned by donating and the amount of your charitable deduction.
May I designate my donation to a particular school?
Yes. You may designate a preference for up to 75% of your donated funds to be used for scholarships at particular Catholic schools. GO will attempt to honor those requests, but may deviate if necessary to remain true to the primary mission of the organization, which is to provide Catholic school scholarships to students most in need of financial assistance, or to meet certain legal requirements. If you elect not to designate preferred schools, your entire contribution will go to the general scholarship fund for distribution to students at all of the Catholic schools in the diocese of Tulsa based upon where the financial need is greatest.
May I designate my payment to a specific student?
No. As a 501(c)(3) charitable organization, GO cannot accept contributions designated for particular individuals.
Is my donation used entirely for scholarships?
Yes. The Scholarship Act requires that each SGO disburse at least 90% of the money it receives each calendar year in the form of scholarships for eligible students during the following academic year, with no more than 10% of contributions available to pay administrative costs. GO was developed in a manner to minimize administrative costs. Furthermore, a generous group of donors has agreed to allow their contributions to pay all administrative costs associated with GO, so 100% of donations received from people like you will go directly toward scholarships for students in our Catholic schools.
Where are contributions held?
Contributions to GO are held at the Bank of Oklahoma in an account designated solely for the purpose of GO for Catholic Schools, Inc. All contributions to GO are deposited into this account and all scholarship payments are made from this account.
What’s the deadline to contribute and still get a tax credit?
Like other charitable contributions, donations to GO for Catholic Schools, Inc. that are received by December 31, 2016, will count as charitable contribution made during 2016. The tax credit that you get for donating to GO in 2016 will be known by March of 2017 and may be claimed when you file your tax return for 2016. Federal and state tax deductions for your charitable contribution to GO in 2016 may also be claimed when filing your 2016 tax returns.
Where can I get more information regarding the Oklahoma Equal Opportunity Education Scholarship program?
You can review the statute itself, Oklahoma Equal Opportunity Education Scholarship Act (68 Okla. Stat. §2357.206). The Oklahoma Tax Commission, which is responsible for carrying out the statute, is another good source of information (www.tax.ok.gov).