Research has shown that charitable gifting leads to greater life satisfaction. Enjoying a tax benefit while making a charitable donation is even better. Enter a Scholarship Granting Organization, or SGO. A SGO is an organization that awards school scholarships to eligible students. Qualified SGOs receive funding for school scholarships from private, charitable donations. These programs are not available in every state, and the nuances vary by state, so let’s look at how it works in Ohio to understand the process.
In Ohio, you can donate up to $750 per person, or $1,500 per married couple, to an eligible SGO and receive a nonrefundable credit against your Ohio tax liability for the amount donated. The $750 donation needs to be made by each spouse, so do not make one $1,500 contribution. The easiest way to donate is through the SGO’s website, and credit cards are often accepted. Keep a copy of your receipt for substantiation during year-end tax preparation. Of note, you must have an Ohio tax liability for this donation to offset. If you are unsure if your charity is a SGO, the Ohio Department of Taxation’s website has a list of certified SGOs. If you’d like to understand the availability and/or tax implications in your state, your advisor would be happy to help.