75% Tax Credit
BEST. GIFT. EVER.
Donate $1000, receive at least $750 in tax credits
The Iowa Education Opportunities Act of 2006 established the School Tuition Organization (STO) program and the STO tax credit program to help non-public school families and taxpayers. Bergman Academy is a member of the Iowa Independent School Tuition Organization (IISTO).
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Donors receive a 75% non-refundable Iowa income tax credit
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Any credit in excess of the tax liability may be carried forward for up to five years
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Eligible donors also include C-corporations, S-corporations, LLCs, partnerships, and some trusts and estates.
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Individuals can claim 25% of their charitable contribution on their federal income tax as an itemized deduction. Corporations can claim the full 100% of the donation on the federal return.
FAQs
Who is eligible for the tax credit?
Any individual taxpayer may donate, with a minimum donation of $1000. Additionally, C-corporations, S-corporations, partnerships, limited liability companies, estates, and trusts may be eligible; please contact your tax professional for more details.
How does a tax credit work, and how is it different than a tax deduction?
A tax deduction reduces the total income on which your Iowa tax is computed. A tax credit is taken directly off the amount you owe in Iowa taxes.
Can I claim a federal tax deduction?
Individuals may claim 25% of the donation as a charitable deduction, corporations may claim 100% of the donation. Please consult your tax professional for the most accurate information.
What if I don’t itemize my taxes?
You can still take advantage of the 75% Iowa Income Tax Credit! You would not be able to take a federal deduction.
Is there a limit on the size of my donation?
The minimum donation is $1000, the statewide cap is $20 million.
How does this benefit Bergman Academy?
When donating to the Iowa Independent School Tuition Organization, you may specify that your donation be applied to Bergman Academy. Tuition assistance will be awarded to eligible Bergman Academy families from these gifts, reducing the need for Bergman to award these scholarships out of the school’s general operating budget.
In accordance with Iowa law, once the scholarship needs of the families attending Bergman Academy have been met, any additional funds indicated for Bergman will be allocated to other member schools.
For additional information, we have found these resources helpful:
Watch a video featuring four CPAs discussing the 75% STO tax credit:
Link: https://www.ourfaithsto.org/75percenttaxcredit
Iowa Independent School Tuition Organization
Link: https://iisto.org/donate
Iowa Alliance for Choice in Education
Link: https://www.iowaace.org/sto-for-tax-preparers/
Iowa Department of Revenue Tax Credit Manual (STO information begins on page 83)