For many, this time of year means a return to the classroom. There are a few education-related items Indiana offers that may be of benefit to you.
- Tax Credit for Donations to an Indiana college or university – For an individual filing a single return, the credit is the lesser of one-half of the amount contributed or $100. For individuals filing a joint return, the credit is the lesser of one-half of the amount contributed or $200. This contribution also qualifies as an itemized deduction on your federal return.
- School Scholarship Tax Credit – Donating to a qualified scholarship granting organization (SGO) provides money for K-12 scholarships for Indiana children. The credit is 50% of your donation applied against your state tax liability. Although there is no individual donation limit, the entire tax credit program has a limit of $7.5 million per year. This contribution also qualifies as an itemized deduction on your federal return.
- CollegeChoice 529 Investment Plan Tax Credit – Contributing to a CollegeChoice 529 plan will get you a 20% state credit (up to $1,000). Your contributions must be received by the plan by the end of the calendar year.
- Education Expenses Deduction – This is a deduction based on education expenditures for each dependent child enrolled for the entire calendar year in a K-12 private school or homeschool. The deduction is $1,000 per qualified dependent.
Please let us know if you would like more information. Your contributions and/or payments must be made by the end of the year in order to report these items on your 2014 Indiana tax return.
Katleen Reno, EA