Monetary or marketable securities donations are eligible to receive Virginia state tax credits under Virginia’s Department of Education (DOE) Education Improvement Scholarships Tax Credits Program, which was established in 2012.
In addition to a 65 percent state tax credit, individuals and businesses can also receive a deduction for a charitable contribution on a portion of the donation, achieving tax savings in two ways:
A 35 percent deduction against net income as a charitable donation on both federal and state income taxes for the portion of the donation that is not eligible for state tax credits for the year of the donation.
The donor may take a credit against Virginia taxes. Tax reduction equals 65 percent of the amount of the donation. The credit is non-transferable and may not exceed the tax liability, but it can be carried over for five succeeding years.
Determining the impact of making a donation for tax credits on a donor’s tax liability is the sole responsibility of the donor. Before making a donation, or when tax-related questions occur, donors are encouraged to seek advice from their tax accountant or other tax advisor.