Individuals and corporations can claim a tax credit for contributions to approved Scholarship Granting Organizations (SGOs), nonprofits that provide private school scholarships for children of failing public schools. Individuals and corporations can claim tax credits (not a deduction) up to 50 percent of their Alabama income tax liability, up to a maximum credit of $7,500 for individuals. Taxpayers may carry forward a tax credit under this program for three years. The total amount of tax credits awarded statewide is limited to $25 million. The credit is on a first-come, first-served basis and must be reserved by the taxpayer before the charitable donation is made.
As of November 21, 2014, there is $15,483,766.50 remaining in the Alabama Scholarship Reserve.
Reserving Tax Credits by Indicating Donations to Scholarship Granting Organizations.
- Reserving a tax credit requires the use of the Department’s online portal for taxpayers, My Alabama Taxes (MAT). Taxpayers who have not previously set up an account will need to Sign Up for My Alabama Taxes.
- Indidvidual Taxpayers signing up for MAT, will need to select Individual Income Tax as their account type and then enter their Social Security number along with their Adjusted Gross Income from the prior year’s tax return in order to set up a MAT account.
- Taxpayers who currenlty have an account may use their existing My Alabama Taxes Account to reserve a portion of the available tax credit.
- Once logged into MAT, a taxpayer will need to select SGO Donation from the menu on the left margin of the page and follow a short series of instructions/steps to record their donation and reserve their potion of the credit.
- After reserving the credit at the Alabama.gov site, the taxpayer will immediately mail his contribution check written to the selected fund at that fund’s address.
Alabama Educational Scholarship Program Scholarship Granting Organizations as of July 8, 2014:
- AAA Scholarship Foundation, Inc. 103 North Memorial Drive, Suite 307, Prattville, AL 36067 888‐707‐2465
- Chambers County Educational Foundation, Inc. PO Box 174, Lafayette, AL 36862 334‐864‐9852 Alabama
- Opportunity Scholarship Fund PO Box 59188, Birmingham, AL 35259 205‐206‐7801
- Beacons of Hope, Inc. PO Box 12047, Birmingham, AL 35202 205‐833‐0173
- Scholarships for Kids, Inc. PO Box 10204, Birmingham, AL 35202 205‐382‐3757
- Rocket City Scholarship Granting Organization, Inc. PO Box 99, Huntsville, AL 35763 256‐369‐3927
- Montessori Society of Huntsville 15975 Chaney Thompson Road, Huntsville, AL 35803 256‐881‐3790
- One Hundred Black Men of Greater Mobile, Inc. PO Box 40507 Mobile, AL 36604 351‐405‐5500