Georgia’s Qualified Education Expense Tax Credit, a tax-credit scholarship program, was enacted and launched in 2008 to help prior public school students access schools that best fit their needs. Learn more about the program’s details on this page, including eligibility, funding, regulations, legal history and more.
Georgia offers tax credits to donors supporting Student Scholarship Organizations (SSOs), nonprofits that provide private school scholarships to students in need.
Scholarship amounts are determined by SSOs, capped only by the average state and local expenditures per child for public elementary and secondary education in the entire state. For 2016, scholarships are capped at $9,081.
Donors receive dollar-for-dollar tax credits for donations to SSOs. Individuals may claim up to $1,000, and married couples filing jointly may claim up to $2,500. An individual who is a member of an LLC, a shareholder of an S-Corporation, or a partner in a partnership may claim up to $10,000 of their tax actually paid as a member, shareholder or partner. Corporate taxpayers may claim up to 75 percent of their total tax liability. The program is capped at $58 million in tax credits per year.
All public school students are eligible if they attended a public school for at least six weeks immediately prior to receiving a scholarship, as are students enrolling in prekindergarten, kindergarten or first grade. Eligibility continues until a student graduates, reaches age 20 or returns to public school. SSOs may set their own eligibility guidelines.
Georgia’s tax-credit scholarship program has the opportunity to be one of the most expansive, successful programs in the country, as there are no arbitrary eligibility requirements. Unfortunately, its $58 million cap on available tax credits limits the number of scholarships to less than 1 percent of students statewide. Raising the cap substantially and adding a strong automatic escalator of the cap as contributions rise to meet demand would be an appropriate improvement, given the strong demand for scholarships and the impressive generosity of individual donors in Georgia. The program does benefit from a generous allowance on the size of individual scholarships, which can equal the average funding amount per student in Georgia public schools. Moreover, there are very few regulations placed on participating schools other than the minimal requirements that schools be physically located in the state, obey nondiscrimination laws and satisfy the normal requirements to be a licensed private school in Georgia.
O.C.G.A. §§ 20-2A-1 through 7 and 48-7-29.16
On May 8, 2014, the Institute for Justice, a public interest law firm, filed a motion to intervene in a lawsuit challenging the constitutionality of Georgia’s tax-credit scholarship program. The initial lawsuit, which was filed in April by four Georgia residents backed by the Southern Education Foundation, argues that the scholarship program violates the state constitution’s ban on providing public support to religious institutions. Trial court ruled against plaintiffs, affirming constitutionality of the program. This ruling was appealed to the Georgia Supreme Court. Pending. Gaddy v. Department of Revenue.