The deadline to apply for the 2023 Georgia GOAL Tax Credit is December 31, 2022.
Contributors to a student scholarship organization such as the Georgia GOAL Scholarship Program receive a 100% Georgia income tax credit for their contributions.
Because there are limited tax credits available each year, a taxpayer who is interested in contributing to GOAL must be pre-approved by the Georgia Department of Revenue. The cap for 2023 is $120 million, and based on the backlog of 2023 applications already received by GOAL, it is expected that the entire $120 million cap on Education Tax Credits will be consumed by January 3, 2023, or “Opening Day.”
Therefore, those interested in the GOAL Tax Credit for 2023 must submit an application to GOAL prior to December 31, 2022. The Georgia GOAL Scholarship Program advises that there will be no opportunity to apply for this tax credit after December 31, 2022. Because it is expected that more than $120 million in applications will be submitted on January 3, 2023, the Department of Revenue will likely prorate the taxpayer application amounts in order to provide a pro-rata share of the $120 million to all applicants on Opening Day.
Part of the reason for the increased demand is based on the increased contribution limits for individuals as well as the double-tax advantages for pass-through businesses. Pass-through entities that elect to pay Georgia income taxes at the entity level can contribute up to 75% of their annual tax liability in exchange for a qualified education expense, or QEE.
Georgia lawmakers recently raised the tax credit limit for pass-through owners from $10,000 to $25,000 if the owner pays that much in Georgia income tax as a result of their pass-through ownership. Therefore, the pass-through income required to support a $25,000 GOAL Tax Credit is $434,783. This income can include both profits (K-1) and wages (W-2).
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