Rhode Island Scholarship Alliance Creates Corporate Scholarship Tax Credit Program
May 30, 2007 | Print this page | Share This | Email this page
Thanks to the Rhode Island Scholarship Alliance, a new tax credit was created for corporations that donate to help lower-income families afford private school education for their children in exchange for a generous tax credit.
The Rhode Island tuition tax credit law allows corporations to receive a substantial tax credit for making contributions that provide economically disadvantaged children with scholarships to attend the school of their choice. Corporations can receive up to a 90 percent tax credit amounting to $100,000 annually on contributions.
Now, after the tuition tax credit expansion act was included in the budget for fiscal year 2008, C and S corporations, along with LLCs and LLPs can all receive a substantial tax credit for making contributions that provide economically disadvantaged children with scholarships to attend the school of their choice.
"This new tax credit provides a very strong financial incentive for Rhode Island corporations to support expanded educational opportunities for students in need," says Donna McGowan, Executive Director of the Rhode Island Scholarship Alliance.
The Rhode Island Scholarship Alliance is a partnership between school choice advocates and scholarship granting organizations (SGOs) working to promote educational opportunities for economically disadvantaged students across the state. Through the alliance, corporations can make contributions to the SGOs in return for the tax credit.
In Rhode Island, there are four SGOs representing more than 60 schools. The amount of the scholarships provided to eligible students by participating SGOs will vary depending on the amount of contributions received and the number of qualified applicants.
With the tax credit, eligible families can now apply for private school tuition support for students in kindergarten through grade 12. Students that come from a household with annual income less than 250 percent of the federal poverty level (approximately $50,000 a year for a family of four) are eligible for tuition support #&151; approximately 91,000 families in Rhode Island.
This is the state's first private school choice tax credit program, following the footsteps of successful programs across the nation. Rhode Island is the eighth state in the nation to enact a targeted school choice program.
Interested corporate donors can apply to receive a scholarship tax credit by submitting an application form from the Rhode Island Division of Taxation. The application is available at www.rischolarshipalliance.org.
