The Oklahoma Equal Opportunity Education Scholarship Act allows Oklahoma tax payers who donate to eligible public school foundations, like the Jenks Public Schools Foundation, to reallocate tax liabilities and receive a portion of their gift back in state income tax credits. This allows donors to support innovative education for public school students and save on their state taxes.
Couples filing jointly are eligible to receive a tax credit of up to $2,000; a person filing as an individual can receive up to $1,000; and a qualified business entity can receive up to $100,000 in state tax credits.
You can make a pledge for a one-time gift or a two-year gift. One-time gifts are eligible for up to a 50% tax credit, while gifts given in two consecutive years are eligible for up to a 75% tax credit.
You can deduct the portion of your gift not reduced by the tax credit from your federal taxes as a charitable gift contribution if you itemize, making the cost of donating to your local public school even lower.
Please consult your professional tax advisor for specific tax advice and interpretation.
What is a tax credit? How is it different than a tax deduction?
Tax credits and tax deductions both decrease the total that you’ll pay in taxes, but they do so in different ways. A tax credit is a dollar-for-dollar reduction of the money you owe, while a tax deduction will decrease your taxable income, leading to a slightly lower tax bill.
Who is eligible to receive a tax credit?
Any individual, family or qualified business entity paying taxes in Oklahoma is eligible to contribute to their foundation designated fund and receive tax credits.
How much of a tax credit can donors receive?
All donors making a single-year donation are eligible for Oklahoma income tax credits up to 50% of the allowable donation amount. The amount of tax credits may not exceed $1,000 for individual filers, $2,000 for those filing jointly, and $100,000 for qualified businesses entities.
Donors who pledge in writing to give the same amount over TWO consecutive years may receive up to a 75% tax credit for BOTH years. The annual tax credit limitations apply.
Please consult your professional tax advisor for specific tax advice and interpretation.
When can I use my tax credit?
Your tax credits may be used in the immediate following year. For example, tax credits received from a 2022 donation may be used to offset income taxes on your 2022 Oklahoma tax return filed in 2023.
The tax credit is good up to the state tax liability. The tax credit from a public school district or school foundation is not refundable. You may only use this tax credit as an offset to Oklahoma income taxes. Any tax credit not used in a given tax year due to no tax liability may be carried over for up to three years.
What is the deadline to contribute and still get a tax credit?
Donations that are postmarked by December 31 will count as a charitable contribution made during that calendar tax year.
The tax credit that you get for donating may be claimed when you file your tax return the following year. Federal and state tax deductions for your charitable contribution may also be claimed, if you itemize, when filing your annual tax returns.
