The Contribution Process – Information for Financial Advisors and CPAs – Forms and Tax Filing

2023 Expanded Tax Credit Options – Benefits for Pass-Through Owners 

  • Once registered for the tax credit, watch for an approval letter in the mail from the Department of Revenue. The letter gives your approval date and the amount of your tax credit. Keep the letter for your tax records.
  • Complete your contribution during the 60-day window. The window starts on the date of the approval letter. Contributions cannot be accepted before this date. When the 60-day window closes, the tax credit expires. No extensions.

You can begin the contribution process using any of the following options once you have been approved by the Department of Revenue for the tax credit. Simply click the options below to read further details.

Please make your check payable to GRACE Scholars. No additional information or paperwork is necessary. Mail the check to:

GRACE Scholars
2401 Lake Park Dr SE
Smyrna, GA 30080

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GRACE accepts American Express, Discover, MasterCard and Visa.

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GRACE debits your personal bank account.

GRACE Scholars accepts gifts of stock and mutual fund shares. These are handled through the Archdiocese of Atlanta Office of Finance. 

The Archdiocese receives the securities, sells the shares and forwards the net proceeds to GRACE. Gifts of securities and mutual fund shares are subject to the procedures of the Archdiocese and its broker. Stock and mutual fund gifts are also subject to state law regarding education tax credits. Please follow these steps:

  • Register for your tax credit at gracescholars.org
  • Once registered, watch for a tax credit approval letter in the mail from the Department of Revenue. The letter gives your approval date and the amount of your tax credit. Keep the letter for your tax records. Complete your contribution during the 60-day window. The window starts on the date of approval letter. Contributions cannot be accepted before this date. When the 60-day window closes, the tax credit expires. No extensions.
  • After receiving state tax credit approval from the Department of Revenue, initiate the stock/mutual fund transfer by following the instructions in the links below. Please allow enough time for the transfer to take place to assure that the 60 day payment deadline is met.
  • Please notify the Office of Finance and GRACE Scholars that you are initiating the stock/mutual fund transfer – Office of Finance, Mary Ann Brown, mbrown@archatl.com, 404.920.7407, GRACE Scholars, Melissa Bassett, mbassett@gracescholars.org, 404.920.7902.
  • When communicating with the broker and the Archdiocesan finance office, it is important to identify GRACE and your designation as the beneficiary of your gift — “GRACE Scholars, Inc./Name of school(s) or Board Choice,” for example.

These resources may be helpful:

Securities (revised 10-20-2021)

Mutual fund shares held by a broker

Attachment I: Sample Letter of Intent to Gift Shares of Mutual Fund held in a Brokerage Account

Attachment II: Sample Letter to Broker to Transfer Mutual Fund Shares

Owners of interests in pass-through entities (S corporations, LLCs and partnerships) are eligible for tax credits of up to $25,000 of a taxpayer’s tax liability from selected pass-through entities. The tax liability is calculated at 5.5% of taxpayer’s Georgia estimated taxable income on pass-through entities selected by the taxpayer. The individual taxpayer, not the pass-through entity, is awarded the tax credit. Therefore, the paperwork must be submitted to the DOR in the name of the individual owner, rather than in the name of the business (pass through entity).

RECENT TAX LAW CHANGES – PASS-THROUGH OPPORTUNITIES FOR BUSINESS OWNERS

NEW VIDEO – 2023 Expanded Tax Credit Options – Benefits for Pass-Through Owners

 With the passage of Georgia House Bill 149 (HB 149), the new tax laws provide two expanded pass-through tax credit options resulting in a double tax benefit:

  1. A SALT (state & local income tax) limit workaround method is for pass-throughs electing to pay Georgia taxes at the entity level. They register with GRACE as a C-corporation. The business may contribute up to 75% of its annual state income tax liability to GRACE and receive both a 100% state of Georgia tax credit and a federal business expense deduction.
  2. The business expense method is for pass-throughs not making the entity election described above. The pass through owners may receive a state of Georgia tax credit for up to $25,000 (an increase from the previous limit of $10,000). These contributions are potentially tax deductible for federal tax purposes. Pass-through income required to support a $25,000 tax credit is $434,783 and $173,913 for a $10,000 tax credit. Keep in mind that income from the pass-throughs can include both profits (K-1) and wages (W-2) income.

*Remember this is not a one-size fits all benefit. Please consult your tax advisor.

*Pass-through entities are S-corporations, Limited Liability Corporations (LLCs) & partnerships

For additional information:

C corporations (including LLCs taxed as corporations), and fiduciaries (e.g., estates and taxable trusts) are eligible for a tax credit of up to 75% of their estimated tax liability. The Contribution process is the same as for individuals. Forms must be signed by an official of the company or entity.

Many companies match gifts to GRACE Scholars. Is your company one of them? You can find out by contacting your company directly. You can double or triple the impact of your gift with a company match. A company matching gift does not require tax credit approval.

As a 501(c)(3) organization under the Internal Revenue Code, GRACE Scholars is eligible to receive matching gifts from many companies. This gives many donors the opportunity to double or triple the size of their gifts to GRACE. In the cases of matching gifts to GRACE, there is no tax credit being received by the corporate donor, so the matching gifts do not use up the cap on available tax credits. As each company sets its own rules, eligibility varies. Typically, the donor completes an online or paper form provided by the company. The form is then directed to GRACE. GRACE completes the charity’s section on the form and routes the form back to the company. The company issues a check to GRACE according to its disbursement schedule. GRACE will designate the company’s match to the same designation as that of the donor, unless company policy states otherwise.

Not sure if your company matches gifts? Contact the company directly. GRACE will provide any necessary information to set up the matching gift. GRACE has had success with the following companies. This is only a partial list:

  • Abbvie Employee Engagement Fund
  • Ameriprise Financial Inc.
  • Bank of America
  • Benevity Community Impact Fund
  • Carrier
  • The Coca-Cola Company
  • Equifax Foundation
  • GE Foundation
  • Goldman Sachs Group, Inc
  • Jackson Healthcare
  • Kimberly Clark Foundation
  • The McKesson Foundation
  • Merck Partnership for Giving
  • Salesforce
  • SunTrust Foundation
  • UBS Financial Services, Inc.
  • YourCause

Forms and Tax Filing Information

Electronic filing is required for taxpayers claiming the Qualified Education Expense (QEE) credit for taxable years beginning on or after January 1, 2017. Individual taxpayers that electronically file their tax return do not have to submit Form IT-QEE-SSO1. Form IT-QEE-SSO1 should be maintained by the taxpayer and made available to the Department of Revenue upon request.

Here is detailed information:

  • Form IT-QEE-SSO1 is mailed to you by GRACE following receipt and processing of your donation. This acknowledges your contribution. A replacement copy can be requested at askgrace@gracescholars.org.
  • A software program’s Form IT-QEE-TP2 that is electronically filed with the Georgia income tax return satisfies the requirement that a taxpayer must submit Form IT-QEE-TP2 with the Georgia tax return when the QEE credit is claimed. For your reference, a blank TP2 form can be referenced above.
  • These software vendors are Department of Revenue approved for e-filing
  • How to claim the QEE Tax Credit using H&R Block
  • How to claim the QEE Tax Credit using TurboTax
  • Donors who itemize on the federal return: If a donor falls short of the full $10,000 SALT (State and Local tax) cap, the donor is allowed to treat their contribution to GRACE as payment of state or local taxes for federal income tax purposes.
  • If you itemized your deductions on your federal return, in order to prevent “double dipping” you must add back to your Georgia taxable income any portion of the GRACE contribution deducted. This increase to Georgia taxable income is reported on Form 500 Schedule 1 – Adjustments to Income, as “Other” and use the description “Qualifed Education Expense Credit Adjustment.”
  • Georgia Form 500 – Credit: The Qualified Education Expense Credit code number is 125. This needs to be entered on Form 500 Schedule 2 (Georgia Tax Credit Usage and Carryover). Enter your “Credit Certificate #” which was provided on your approval letter from the Georgia Department of Revenue, social security number and credit amount claimed.