The Oklahoma Equal Opportunity Education Scholarship Act was an existing law that was expanded in 2021 that now allows Oklahoma tax payers who donate to eligible and approved public school foundations, like the Oklahoma City 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 programs supporting public education students and earn credits on their state taxes.
How it works
Available Oklahoma State Tax Credits
Three levels of available credits based on filing status:
- $1,000 Credit for Individuals
- $2,000 Credit for Couple filing jointly
- $100,000 Credit for Businesses
Two Available Tax Credit Levels:
- 50% one-time gift
- 75% two-year gift
Oklahoma City Public Schools Foundation Minimum Contribution Levels:
Because of the rigorous reporting requirements, the following minimum contribution levels have been set:
- Individuals/Couple $1000
- Businesses $2,500
Approved Programs for 2022 Contributions:
PLEASE CONSULT YOUR PROFESSIONAL TAX ADVISOR FOR SPECIFIC TAX ADVICE.
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?
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 deduction?
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.