Who is eligible for a credit for donations to this program? Businesses and individuals that have filed a Louisiana income tax return in the year for which they make a donation are eligible.
Can donors/community partners designate their donation for a specific student or group of students? Community parnters may not designate their donation for a specific student unless their donation benefits a student(s) with disabilities. Taxpayers may designate their donations for all students with disabilities, students with a specific type of disability, or a specific student with a disability.
Can community partners designate their donation for a specific school or group of schools? While community partners may not designate their donation for a specific school, they may coordinate with Aspiring Scholars to potentially designate their donation for a particular group of schools.
How much of a TDC donation is eligible for a credit? Taxpayers receive credit for the portion of their donation that Aspiring Scholars uses to fund student scholarships at the end of each school year. The credit is a nonrefundable credit which can be used to offset income tax and any unused credit amount may be carried forward as a credit against subsequent income tax liabilities for a period not to exceed three taxable years.
How much of the donation can be used for administrative costs? By law, up to 5% of donations for student scholarships may be used for administrative costs. Community partners may choose to designate 100% of their donation for administrative costs instead of student scholarships, but this donation would then not be eligible for a credit.
How does a donor/community partner receive the credit? The Louisiana Department of Education will verify the amount of each taxpayer’s donation spent on student scholarships and issue a receipt to the taxpayer through Aspiring Scholars. The taxpayer must attach the receipt when filing their income tax return. If the donation was made by an individual or a business owned by a sole proprietor or a flow-through entity such as a Limited Liability Company (LLC), Partnership, Subchapter S corporation, the credit will be claimed on the Resident Individual Income Tax return, Form IT-540, or the Nonresident and Part-Year Resident Individual Income Tax Return, Form IT-540B. If the business making the donation is a corporation or C-corporation, the credit will be claimed on the Corporation Income and Franchise Tax Return, Form CIFT-620.
Who should donors/community partners contact regarding specific tax liability questions? Specific questions regarding how donations and potential credit impacts tax liability should be referred to a tax lawyer or advisor.