School Tuition Organization
of SOUTHEAST IOWA

65% State of Iowa Tax Credit

How the Credit Works

Donors to the STO of Southeast Iowa receive a 65% Iowa tax credit instead of an Iowa tax deduction. The credit reduces a donor's Iowa tax by 65% of the amount contributed. Contrast this with a deduction which would reduce Iowa tax by less than 9% of the amount contributed.

Do the Math

For example, a donor who will owe Iowa tax of $1,000 gives the STO a $1,000 contribution. That donor receives a $650 credit against his tax liability and now owes only $350. In addition, the donor can also claim the full $1,000 contribution as a charitable donation on his federal tax return if he itemizes deductions. Assuming this donor is in the 25% federal income tax bracket, the net cost of his $1,000 gift is only $100!

Contribution $1,000

Iowa Tax Credit $650

Federal Tax Savings $250

Net Cost to Donor $100

Consult a tax professional to see how the STO Tax Credit would apply in your specific tax situation.

When to Make Your Gift

The STO of Southeast Iowa has been authorized by the State of Iowa to receive contributions of up to $909,194 in calendar year 2012. We typically meet our contribution goal by mid-December of each year, but in 2011, we reached our goal in early June! For this reason, if you want to take advantage of this opportunity, we encourage you to make your contribution as early in the year as possible. Your gift can be restricted to one or more of the schools we serve.