Rep. Hamilton has filed HB 1019 which would provide a tax credit for donations to public school foundations. It gives taxpayers a credit against their tax liability in an amount equal to 50% of their contribution to a public school foundation. The amount of the credit is capped at $1,000 for single filers, $2,000 for joint filers, and, for corporate filers, the greater of 10% of the corporation’s tax liability or $5,000.
A “public school foundation” is a 501(c)(3) corporation “organized as an Indiana nonprofit corporation for the 8 purposes of providing educational funds for scholarships, 9 teacher education, capital programs, and special programs 10 for school corporations” including a public school foundation incorporated under IC 20-26-5-22.5
As the president of the board of the West Lafayette Schools Education Foundation, I’m not really an objective observer on this one. Sounds like a good idea!
Huh. I’m surprised this wasn’t already the case. There’s a similar credit on the books for donation to state universities (although I believe it’s capped at $100, unless they’ve changed that). Maybe they could expand it to public libraries, too?
Do all school corporation have public school foundations? If not shouldn’t there be the same tax credit for donations to public school corporations without foundation.
I am not familiar with the tax code for donations to a school corporation. I’m guessing there is no tax credit for donations.
Most school corporations do have a foundation. If they don’t they are making a huge mistake.
You might want to clarify that this would be a credit against one’s state income taxes, not their federal.taxes.
Indiana’s flat rate income tax is based on one’s federal adjusted gross income, which include charitable contributions. But the feds decreased the need to itemize those charitable contributions by increasing the standard deduction. As a result, people no longer are incentivized to make charitable contributions. This change in the law would use the state income tax code to re-incentivize those who want to donate to public school foundations. And it’s significant that it’s a tax credit, which will be a $1 for $1 offset of one’s state tax burden.