Tax Credits, Explained
The Oklahoma Equal Opportunity Education Act allows Oklahomans who donate to eligible public school foundations, public school districts or educational improvement granting organizations (EIGO) to reallocate tax liabilities and receive a portion of their gift back in state income tax credits.
Unlike a tax deduction, which lowers the filer's taxable income amount, a tax credit lowers your tax liability, resulting in a greater savings. Donors can give a one-time gift or pledge a two-year gift. One-time gifts are eligible for a 50% tax credit, while gifts given in two consecutive years are eligible for a 75% tax credit.*
Individuals
A person filing as an individual can receive up to $1,000 in state tax credit.
Example: An individual donor gives a one-time $1,000 gift and receives a $500 tax credit.
Couples Filing Jointly
Couples filing jointly are eligible to receive up to $2,000 in state tax credit.
Couple pledges a two-year gift at $2,666/yr and receives $2,000 tax credit annually for two years.
Businesses
Qualified business entities can receive up to $100,000 in state tax credits.
Example: A business pledges a two-year gift of $133,333/yr and receives a $100,000 tax credit annually for two years.
For more detail information regarding the Oklahoma Equal Opportunity Scholarship Act (SB407) please click below for a PDF overview offered by the Oklahoma State School Boards Association.
*NOTICE: The Oklahoma Public Schools Foundation does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.