The Exceptional Needs Children Scholarship Credit

Time is running out for those of you interested in claiming the exceptional needs children scholarship credit.  As of June 2, 2014, almost $4.5 million of the allotted $8 million credit remains to be claimed by eligible claimants.  For those of you that don’t know about the credit, here is a little explanation.

Temporary Budget Proviso 1.85 provides a South Carolina income tax credit for contributions made to nonprofit scholarship funding organizations between the period of January 1, 2014 and June 30, 2014.  The contributions to the nonprofit scholarship funding organizations are to provide grants for tuition, transportation, and textbooks to exceptional needs children enrolled in eligible schools.  The budget proviso set aside a total of $8 million in credits that have to be claimed by June 30, 2014. 

To claim the credit, taxpayers must apply to the SC Department of Revenue by completing a Form TC-57A.  The credits are approved among eligible claimants on a first-come, first-serve basis according to the date and time the applications are received by the SC Department of Revenue.  The most credit an eligible taxpayer can receive may not exceed 60% of the taxpayer’s total 2014 state income tax liability.  In addition, the credit is not refundable.  A list of nonprofit scholarship funding organizations in good standing and approved independent schools can be found on the Education Oversight Committee’s website (www.eoc.sc.gov). 

This is an excellent opportunity for those of you who are looking for a way to help exceptional needs children while still meeting your state income tax obligations.  If you are interested in how this credit may benefit you, please give us a call so that we can assist you in projecting your anticipated tax liability thereby allowing you to maximize your contribution.