Qualified Education Expense Tax Credit

All Georgia students are eligible to participate if they attended a public school for at least six weeks immediately prior to receiving a scholarship, or if they are enrolling in pre-kindergarten, kindergarten, or first grade. A student remains eligible until the student graduates high school; reaches the age of 20; or returns to public school, whichever occurs first. Prior public school attendance is waived for students based on zoned attendance assignment if their resident public school is determined by the Office of Student Achievement as a low-performing school; the student is the subject of officially documented cases of school-based physical violence or student-related verbal abuse threatening physical harm; or the student was enrolled in a qualifying home study program for at least one year prior to receiving a scholarship. Scholarships are not needs-based, but SSOs are required to consider financial needs and are permitted to prioritize awards according to student need. _(Last updated July 15, 2024)_

Scholarships provided to students are required to be restrictively endorsed and deposited into accounts of participating schools to cover tuition costs for the participating student. Qualified schools can include a pre-kindergarten, elementary, or secondary nonpublic school. _(Last updated July 15, 2024)_

Private donors fund this program by donating to SSOs and receiving tax credits for their donation, up to certain limits. The maximum scholarship amount given to a student in any given year cannot exceed the average state and local expenditures per student for the state. The Georgia Department of Education determines and publishes the amount annually, no later than January 1. SSOs determine individual scholarship values. Taxpayer donations to SSOs are valued at 100% of the contributions made for the benefit of providing scholarships to students, up to certain caps. Donations and credits are available to individuals and corporations. Each calendar year, until the program cap on credits is met, taxpayers are limited by the following credit limits based upon filing: $2,500 for single filers; $2,500 for married separate filers; $5,000 for married joint filers; $25,000 for individual pass-through owners; 75% of annual tax liability for C-Corp, Trusts, or electing pass-through filers; and 75% of annual tax liability not to exceed a credit of $1 million for businesses that pay insurance premium taxes. The insurance premium tax credit is capped at a total annual amount of $6 million, permitted on a first come, first served basis. Total credits claimed cannot exceed $120 million, meaning roughly 26,000 students can participate, or 1% of Georgia’s K–12 student population. _(Last updated July 15, 2024)_

On June 26, 2017, the Georgia Supreme Court in _Gaddy v. Georgia Department of Revenue_ rejected a challenge to Georgia’s tax-credit scholarship program and ruled that plaintiffs had no standing to sue. _Gaddy v. Georgia Department of Revenue_ , 802 S.E.2d 225 (2017). The original complaint, _Gaddy v. Georgia Department of Revenue_ , No. 2014 CV 2445538 (Fulton County Super. Ct. Feb. 5, 2016), brought by four Georgia residents backed by the Southern Education Foundation, alleged that the tax-credit scholarship program violated the state constitution’s ban on providing public support to religious institutions, and several other constitutional provisions. The trial court affirmed the program’s constitutionality, observing that the tax credit would not “increase their taxes or drain the state treasury” and that “the program may actually save the state money.” _Gaddy v. Georgia Department of Revenue_ , No. 2014 CV 2445538 (Fulton County Super. Ct. 2016) _(Last updated July 15, 2024)_