Ohio Tax Credit Program for CMA's SGO

Questions


Q: What is a tax deduction?

A: A tax deduction is an amount you subtract from your income when you file so you don't pay tax on it. By lowering your income, deductions lower your tax.


Q: What is a tax credit?

A: A tax credit is an amount you can subtract directly from your tax. This is different from a tax deduction, which lowers the amount of your taxable income.

  • A tax credit is an amount of money that taxpayers can subtract, dollar for dollar, from the income taxes they owe.
  • Tax credits are more favorable than tax deductions because they reduce the tax due, not just the amount of taxable income.
  • There are three basic types of tax credits: nonrefundable, refundable, and partially refundable.
  • Nonrefundable tax credits can reduce the tax you owe to zero, but they don’t provide refunds.

 

Q: What is a Scholarship Granting Organization?

A: A Scholarship Granting Organization (SGO) is a non-profit organization that receives donations from individuals and businesses, and then awards scholarships to students:
Purpose: SGOs are primarily focused on awarding academic scholarships to students in K-12, with a priority on low-income students.
Tax benefits: Donors to certified Ohio SGOs can receive a tax credit through the Ohio Tax Credit Program. The credit is available to most taxpayers who take the standard deduction on their federal tax return.


Q: May I designate my SGO contribution to a specific student?
A: No. Following the rules of the OAIS SGO, as a 501(c)3 organization, CMA cannot earmark or accept donations for a specific student. 


Q: How do I receive the tax credit from the State of Ohio?
A: The credit is claimed on your State of Ohio income tax return when you file it.


Q: My spouse and I would like to make a $1,500 contribution to the SGO. Can we write one check or make one online contribution and receive the $1,500 non-refundable Ohio income tax credit?
A: Under the direction of the State of Ohio, married taxpayers must make TWO SEPARATE $750 donations (one in each of their names) to be eligible for the full $1,500 non-refundable Ohio income tax credit.