In addition to receiving a tax credit against their Georgia income taxes, taxpayers who itemize their deductions may take a charitable deduction on their federal income tax returns for amounts contributed to Georgia GOAL Scholarship Program, Inc.
Effective in 2018, this federal deduction is important and provides value to most taxpayers, given the limitations imposed on state and local (SALT) tax deductions by the Tax Cut and Jobs Act (2018 federal tax legislation).
- The main impact of the new federal tax legislation, as related to our program, is the limitation of the state and local tax (SALT) deduction for taxpayers who itemize. The new law limits the deduction for all state and local income and property taxes to $10,000. This means that, beginning in 2018, Georgia taxpayers will no longer be able to deduct any portion of their Georgia income taxes paid on their federal income tax returns that exceed the $10,000 cap.
- Contributing to GOAL will make this less of a 'sting' for Georgia taxpayers. While no longer able to deduct the payment of their Georgia income and property taxes exceeding $10,000, taxpayers WILL CONTINUE to be able to deduct their contributions to GOAL (as charitable deductions) on their federal income tax returns. Bottom line: by contributing to GOAL, taxpayers whose SALT deduction is limited will hang onto at least a portion of the deduction they would otherwise be losing.
- Prior to 2018, taxpayers who paid Alternative Minimum Tax (AMT), which always disallowed the deduction of state income and property taxes for federal tax purposes, received a larger benefit for contributing to GOAL. While the SALT deduction will now be limited for everyone, AMT has been rendered largely irrelevant. Therefore, ALL taxpayers who itemize, and whose SALT deduction is limited, will retain an important deduction and reap a monetary benefit by contributing to GOAL.
Please note that in calculating their Georgia taxable income on their Georgia state income tax returns, taxpayers who take the tax credit for their contributions to the Georgia GOAL Scholarship Program will have to add back to Georgia taxable income the corresponding amount taken as a federal charitable income tax deduction. Although GOAL recommends that taxpayers consult with their tax advisors, GOAL is providing taxpayer filing guidance in connection with the taking the qualified education expense credit on their Georgia returns.