C-Corporations and Pass through corporations can contribute to the Georgia GOAL Scholarship Program and receive a much needed benefit.

georgia-goal-scholarship-programCorporations can receive a tax credit for amounts contributed to the GOAL Scholarship Program and many corporations have done so. For “C” corporations, the tax credit is available up to 75% of their annual Georgia income tax liability.

Owners of S-Corps, LLCs and Partnerships may now contribute up to $10,000 to a SSO for a tax credit, so long as they would have paid Georgia income tax in that amount on their share of taxable income.

If both husband and wife both earn income from pass-through entities, each can contribute up to the $10,000 limit for a total of $20,000

How does this work if I own more than one pass-through entity?

–If the individual has ownership in more than one pass-through entity, the total credit allowed cannot exceed $10,000.

–The individual decides which pass-through entities to include when computing Georgia income for purposes of this tax credit and may combine all Georgia income, loss and expense regardless of ownership in multiple pass-through entities.

May I also claim a credit as a single tax filer?

–If the taxpayer chooses to be preapproved under the pass through entity option, they are not allowed the additional amounts normally allowed an individual.

Can this tax credit be carried forward?

–No. 6% of the Georgia taxable income from pass through entity (or entities) (up to a total of $10,000) is the maximum amount that may be claimed as a tax credit, and any excess amounts may not be claimed in the current year and may not be carried forward.

How do I determine whether I can take the full $10,000 tax credit?

–All Georgia income, loss and expense from the taxpayer-selected pass through entities will be combined to determine Georgia income for purposes of this credit. Such combined Georgia income shall be multiplied by 6% to determine that tax that was actually paid.

–May I include W2 income from the pass through as well as K-1 income? YES

Helpful rule of thumb: the taxpayer’s Georgia income from pass through entities must be at least $166,667 to take advantage of the full $10,000 tax credit ($166,667 * 6% = $10,000).

If you have any questions, please do not hesitate to contact us at (912) 353-7800

 

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