Virginia Department of Education
Education Improvement Scholarship Tax Credits
The Hague School has partnered with Leadership International, A Charitable Trust to offer scholarship tax credits since the Fall of 2019. Upon approval by the Virginia Department of Education, donors may obtain pre-authorization for tax credits in addition to certain tax deductions on their individual or corporate tax returns.
What are the tax savings to individual donors?
In addition to a 65% Virginia tax credit, donors who itemize also receive federal and state deductions for charitable contributions and therefore achieve tax savings in multiple ways. Also, donors contributing appreciated marketable securities save on capital gains tax. Education Improvement Scholarships Tax Credits are non-transferable. They may not exceed the tax liability in a given year, but may be carried over for up to five succeeding years.
Can businesses benefit from this program?
Yes. In addition to tax benefits to individuals, businesses can claim the Education Improvement Scholarships Tax Credits against corporate income taxes, including:
- Virginia Bank Franchise Tax
- Virginia Insurance Premiums License Tax
- Virginia Public Service Corporations Tax
- Personal Income Taxes via pass-through entities such as S-Corporations, LLCs, and Partnerships
The Virginia Department of Education has provided the following information about this program:
EDUCATION IMPROVEMENT SCHOLARSHIPS TAX CREDITS PROGRAM
The Education Improvement Scholarships Tax Credits Program (EISTCP) provides state tax credits for persons or businesses making monetary or marketable securities donations to approved scholarship foundations that provide scholarships to eligible students for qualified educational expenses incurred in attending eligible nonpublic schools in Virginia.
The tax credit is equal to 65 percent of the monetary or marketable securities donation, and may be claimed against the individual income tax, corporate income tax, bank franchise tax, insurance premiums license tax, or tax on public service corporations. Tax credits issued by VDOE may be claimed for the taxable year in which the donation was made to a qualified scholarship foundation. Any unused tax credits may be carried over for the next five succeeding taxable years or until the total amount of the credit has been taken, whichever is sooner. The total amount of tax credits that may be issued in each program year (i.e., state fiscal year) is $25 million. For more information, contact your accountant or go to Qualified Donations & the Tax Credit Approval Process on the DOE website.