Q: Is there a limit to how much I can give and still receive the credit?
No, there is no limit on your donations as long as there are tax credits available (see section above for link to check remaining credits). The credit is applied to your Indiana state tax liability. If the amount of your credit exceeds your tax liability, the unused credit may be carried forward for up to nine years, but it may not be carried back or refunded.
Q: Can I designate a school or student to receive my gift?
Yes, and no. You may designate one of our participating schools to receive your gift. However, SGO donations may not designate a particular student; this would be considered a tuition payment and is not eligible for a tax credit.
Q: Is this gift eligible for a federal deduction?
Yes, if you itemize. The amount eligible for federal tax deduction as a charitable contribution is 50% of the value of the SGO gift. Pending federal rules also provide that donors who have less than $10,000 in state and local tax (SALT) deductions in the year that the credit is being claimed may deduct the other 50% of the gift as a state tax payment. All gifts are eligible for a 50% Indiana state tax credit, so long as credits remain. See the "Understanding the Tax Benefits" page for more information.
Q: How do I claim my credit?
The receipt letter that you receive from Sagamore Institute will include the amount of the donation, the tax credit certification number, and instructions for claiming the credit. We also send out year-end letters in January that summarize your donation and include detailed directions.
Q: Can I give using a Donor Advised Fund?
The Indiana Department of Revenue will give a donor a tax credit certification number for a gift given from a DAF. HOWEVER, we strongly advise against giving to the SGO program through a DAF because of the potential penalties and fines from the IRS on the federal side. If you want to use DAF funds to benefit a school, please consider giving directly to the school.
Q: Can I give to the SGO through my IRA?
It is really important to discuss the best way for you to give with your tax professional. Anyone who is over 59 1/2 can give to the SGO from their IRA without a penalty. A gift from an IRA will get the 50% state tax credit. It is our understanding that a gift made from an IRA would NOT be considered a Qualified Charitable Distribution and would need to be included as taxable income on your federal taxes. If you itemize you would deduct 50% as a charitable donation.
Q: Can I make a recurring donation?
Yes. The first option is to set up a recurring donation using your bank's automatic bill pay service. Checks should be made payable to Sagamore Institute SGO with the name of the school in the check's memo line. Please complete a donor form to let us know that a recurring gift has been established (future gifts will not need a form.) The second option is to set up a recurring donation through our online giving platform, using either a credit card, debit card or a transfer from your checking account (echeck). Either way, we will issue a receipt letter for each donation.
Q: Who receives the scholarships?
Indiana K-12 students who meet the income eligibility guidelines and attend a participating school. Scholarship amounts range from a minimum of $500 up to full tuition, with the average scholarship amount around $2000.
Q: What happens if I forgot to claim my credit?
If you forgot to claim your tax credit scholarship credit for the taxable year you can either file an amended state tax return or just include it in your return the following year (the credit carries forward for up to nine years). Simply complete form IN-OCC 55629 as normal using the tax credit certification from your donor receipt letter.
Q: What happens if the annual tax credit allocation is depleted before the end of June?
The state has set aside a limited amount of money for tax credits each fiscal year (click here to see remaining credits). If that amount is depleted, tax credits for new donations will not be available until the following July 1st. If that happens, Scholarships for Education Choice could either return your donation or, if you preferred, process it without the tax credit. Donations processed without the state tax credit would still be considered charitable contributions for federal tax purposes. If your donation is returned, it could be resubmitted for a tax credit on July 1.
Q: How do I make sure that my year-end donation counts in the right tax year?
In order to comply with IRS requirements, we need to make sure that your donation occurs in the tax year for which you would like to claim it. The easiest way to make a last minute donation is to give on-line via your checking account, credit or debit card. If you mail your donation (either directly to us or to the school), consider taking it to the post office during business hours by the last day of the year. Caution: if you drop it in a mail collection box on the last day of the year, it may not be processed (postmarked) until the first business day of the following year. If you are dropping your donation off at a school or at our offices, please do that during business hours when there is a staff person available to accept the donation.