School Tuition Organization of SOUTHEAST IOWA

246 Fifth Avenue South, Suite 103
Clinton, IA 52732-4349
ph: (563) 244-1040
fax: (563) 244-9977
steve@roling.net

65% State of Iowa Tax Credit

What is the Educational Opportunities Act?

The Educational Opportunities Act, passed by the Iowa Legislature in June 2006, provides a wonderful opportunity for Iowa taxpayers to Give the Gift of School Choiceandto receive a tax credit on their Iowa income tax returns equal to sixty-five percent(65%) of the total amount of cash contributions made to a School Tuition Organization (STO).

Do the Math

For example, a donor owing $1,000 in Iowa income tax who gives $1,000 to the STO of Southeast Iowa, will receive a $650 tax credit and then owe only $350 in state income taxes. Further, the donor can also claim the full $1,000 donation as a deduction on his or her federal income tax return. Tax credits may be carried over for a maximum of five subsequent years from the date of the gift.

Contribution                $1,000
Iowa Tax Credit    $650
Federal Tax Savings $250
Net Cost to Donor            $100

Consult a tax professional regarding how tax laws apply to you.

Ensure Receiving a Tax Credit by Gifting Early

There is a cap of $7.5 million in total tax credits (or $11.5 million in donations) that can be given across the State of Iowa for the 2009 calendar year. The School Tuition Organization of Southeast Iowa has been authorized to raise $773,085 (25% can come from C corporations) in 2009 for the 2010-11 school year.

In the past, the STO of Southeast Iowa has met its authorized goal by early-mid December; therefore to ensure receiving a STO of Southeast Iowa tax credit, donors are encouraged to make their gift by December 1, 2009 or earlier. All gifts can be restricted by a donor for use by one or more of the schools within the STO.