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In August, the Department of Treasury issued new regulations that could allow your business to make a donation to Scholarships for Kids with the full state income tax credit, and in addition, treat it as a business expense for federal tax purposes. In other words, your business could reduce its taxable income with a deductible expense on the federal side, and you could reduce your personal Alabama state income tax liability dollar-for-dollar in the amount of your business’s donation. The net effect is potentially a combined federal and state tax benefit greater than the total dollar amount of the donation.
Any assessment of whether your business could meet the provisions of the new regulations must be based on your particular facts and circumstances. Our friends at Maynard Cooper and Gale have prepared a memorandum (included in the links below) explaining the new regulations for discussion with your tax professional.
MAULDIN & JENKINS CPAS AND ADVISORS HANDOUT
In all cases, please consult your tax advisor. If you have questions or need assistance making your gift, please contact Kimberly Wicker via email or 256-400-1551.
Scholarships for Kids, a Birmingham-based Scholarship Granting Organization, partners with Southern Preparatory Academy to make quality private education in a nurturing environment accessible to families.
