What is a Scholarship Granting Organization (SGO)?
It is a religious or nonprofit organization exempt from federal taxation whose primary intent must be to award academic scholarships for K – 12 students to attend schools prioritizing low-income students. Low income is defined as a household with earnings up to 300% of the federal poverty level.
What is the benefit of an SGO?
The State of Ohio recently enacted legislation allowing a tax credit up to $750 per individual or $1,500 for married couples filing jointly for donations made to certified scholarship-granting organizations. This credit is available to individuals who have an Ohio tax liability. The credit is a dollar-for-dollar credit, but is limited to the lesser of: 1) $750 per individual; or, 2) $1,500 for married couples filing jointly; or, 3) your total tax liability. Married couples filing jointly should consult with a tax professional to determine if they should submit separate checks of $750.00 each.
Why did Beaumont School create a separate SGO?
Only donations made to a certified scholarship granting organization are eligible to receive a tax credit on an individual’s State of Ohio tax return. The Beaumont Scholarship Granting Organization was created to allow donors to make donations for our students while also receiving eligibility for tax credits. The Beaumont Scholarship Granting Organization is fully certified with the State of Ohio as a scholarship granting organization.
How do I estimate my State of Ohio tax liability?
It is best to always consult with your tax professional for information on the impact of this or any charitable donation. All individuals with earned income will pay income taxes to the State. Even if you received a refund in the previous year, you paid State income taxes. To estimate the current year’s liability, contact your tax preparer or review your previous year’s tax return. Your State tax liability is not necessarily the amount deducted from your paycheck or the amount refunded to you or owed to the State. Rather, the tax liability is the total amount owed to the State before determining whether there is a refund or an additional amount to pay. In order to estimate if you will have a tax liability in the coming year, review your tax liability from the previous year’s State of Ohio tax return (in 2021, this amount would be on 1040 IT, line 8c). After considering whether there have been significant changes to your income this year, reviewing the prior year’s State of Ohio tax return will help to estimate whether you will have a similar liability in the current tax year. Contact your tax preparer with questions.
How can I donate?
You may donate online at www.beaumontschool.org/SGO or by sending a check made out to the Beaumont Scholarship Granting Organization, 3301 North Park Blvd., Cleveland Heights, OH 44118.
Can I direct my donation to a specific student?
No. As a 501(c)(3) organization, the Beaumont Scholarship Granting Organization may not accept donations that are designated for a specific student.
My employer offers matching contributions. Will the Beaumont Scholarship Granting Organization accept a matching contribution from my employer?
Yes. This is a great way to increase your impact. However, you will not receive a receipt or tax credit for your employer’s matching amount.
Who is responsible for submitting the contribution information to the State of Ohio?
Each donor is personally responsible for maintaining the contribution acknowledgment letter provided by the Beaumont Scholarship Granting Organization. That receipt can be used to claim the tax credit through the State of Ohio.
*This does not constitute income tax advice. Always consult with your tax professional for information on the impact of any charitable contribution.
