After a rough 2020 and 2021, there’s some good news for businesses.
There have always been benefits to giving to Student Scholarship Organizations. But, new rules have changed the game, and businesses stand to benefit.
“There have been changes to federal and state tax laws that will open up the possibility for passthrough entities to make larger than $10,000 contributions to an SSO in 2022 (with potentially larger credits against GA income tax), and possibly help them avoid the individual SALT limitations by potentially taking a federal deduction for an ordinary and necessary business expense at the entity level, “says CPA Becky Waters.
According to Waters, this is based on new legislation, HB 149. “The benefit is that if they file at the entity level, they can give as a “C-Corp” and can give up to 75% of their state income tax to an SSO,” she says. “They will then be eligible to deduct the state income tax on their federal return and have no limit for the deduction, which is currently limited to $10,000 due to the SALT rule.”
Learning to Serve Executive Director Mandy Hudson is excited about the possibilities for businesses. “With the new regulations, business can not only do more to support school choice in their communities, but they can possibly take a larger federal deduction from their contributions and directly affect their bottom line,” she says. “The best way to find out how your business can maximize your benefits is to talk directly to your tax preparer.”