EdChoice on Department of Treasury guidance affecting tax-credit scholarship donors
INDIANAPOLIS—EdChoice, a national nonprofit organization that promotes state-based educational choice programs, released the following statement from Vice President of Legal Affairs Leslie Hiner on guidance issued today by the U.S. Department of Treasury potentially affecting donors to tax-credit scholarship programs:
“Today the Department of Treasury finalized their proposed rule severely limiting the federal deductibility of contributions to charity, including scholarship granting organizations. The threat of this rule has had a negative impact on giving, which harms families whose children are receiving scholarships to access education that fits their learning needs.
“However, In states with low state and local taxes, families relying on K-12 education scholarships from tax credit scholarship programs were given a whisper of hope from the Department of Treasury today. Although just a whisper, the promise of a new proposed rule to alter today’s final rule is a positive step forward. It would remove a small provision that creates a disincentive for donors whose state and local taxes are less than $10,000. These donors could receive a federal state and local tax deduction for the full amount of their donation, regardless of whether they receive any state credits or deductions for the donation, up to the full federal state and local tax deduction cap of $10,000. The new rule should be proposed in a few months.
“Although the rule adopted today remains an unwelcome change in tax law that works against those who generously give to charities, we support continued efforts to lessen this negative effect. And we encourage donors who saw no relief today to continue their generous giving to scholarship granting organizations, without regard to federal tax benefits or lack of benefits, as thousands of children across the country need options to find education that will fit their needs for learning.”