GRACE Scholars

THIS IS A NO-COST GIFT! Give the no-cost gift of a Mercy education: Give to GRACE!

Click here to download the GRACE Scholars Form (TP1)  that you need to start the process.

What is GRACE?

 

G.R.A.C.E. Scholars, Inc. (Georgia Residents Assisting Children’s Education) is a student scholarship organization (SSO) that allows a taxpayer in Georgia can “use” part of his/her Georgia income tax to provide scholarships for students entering Catholic schools in Georgia. This occurs because the tax payer receives a 100% tax credit against his GA tax liability for the amount donated to GRACE Scholars. Therefore, money that was going to pay taxes is being “used” to support Catholic education for those who need financial assistance.

 

 

Why is participating in GRACE unique? Who can contribute?

 

GRACE is a 100% percent, dollar-for-dollar tax credit that allows tax payers to “redirect” (move your tax payment) to scholarships for students. A donor receives 100% credit against State taxes. Donor is reimbursed 100% of donation. Money that would have gone to the State is now supporting Catholic schools in Georgia. A donor can also specify which Catholic school receives the contribution - which means you can assign your contribution to directly benefit future Mercy students!

Any Georgia tax payer can give to GRACE, regardless of whether they owe the State money or not.

 

How much can I contribute?

To receive full credit, you may contribute up to the LESSER of (a) your actual tax liability or (b) the maximum allowable limit based on filing status:

·         A single taxpayer can “use” up to $1,000.

·         A married couple filing jointly can “use” up to $2,500.

·         A married couple filing jointly, that pays AMT (alternative minimum tax) can “use” up to $ 2,500 and save $725 (due to a tax savings of $3,225 for both federal and state).

·         A “C’ Corporation can “use” up to 75% of its total Georgia state tax liability.

·         Partnerships, LLCs and Sub-S corporations are subject to the owners’ individual limits.
If you contribute more than the allowable limits above, unused credits can be carried forward for 5 years.

We file jointly but I don’t think we can do the full $2,500. Do we have to contribute the maximum allowable limit based on my tax filing status?

No. You may contribute any amount up to the maximum limit (see above) based on your filing status in order to receive full tax credit for the tax year of donation.

How does a tax credit differ from a deduction?

A tax credit is significantly more beneficial than a deduction. A credit reduces your Georgia taxes dollar-for-dollar while a deduction reduces the taxable income upon which taxes are calculated. If you claim the tax credit on your Georgia return, you cannot also claim a deduction for the same donation on your Georgia return. However, you may be able to claim the payment as an itemized deduction on your Federal income tax return, thus lowering the amount of Federal tax paid.

Yes! I want to give the gift of a Catholic/Mercy education - What are the steps to contributing to GRACE?

 

You can contribute for a tax-credit in two simple steps:

 

Step 1: Get your intended contribution “pre-approved” by the State Department of Revenue by completing the TP1 Form and sending the completed form to the State Department of Revenue (TP1 forms at OLM or online)

 

Step 2: Once you receive your “approved” TP1 Form from the State Department of Revenue, make your contribution to GRACE Scholars by sending your check (or paying online at the GRACE website).

 

You must send/make your payment payable to “GRACE Scholars” within 60 days of the “approval date” of your “approved TP1″ Form and before Dec. 31 of the applicable year, whichever comes first (the sooner, the better! – see Deadline information below)

 

You must also send your “approved” TP1 form to GRACE Scholars in order for GRACE Scholars to accept your contribution. You also have the option to designate the school(s) to receive your contributions by completing the GRACE Scholars Designation Form. (Please designate OLM!) Contributions not specifying specific schools as recipients will automatically default to go to the GRACE Scholars Board Fund.

 

Why must I get preapproval from the State?

 

Georgia has allocated $50 million of credits for the entire program for the year.  The preapproval form ensures that there are credits available to reimburse the total amount of your donation.


Can I specify that my donation be used for scholarships at a specific Catholic school?

 

Yes! All of the Catholic schools in Georgia are eligible to receive funding through GRACE Scholars, Inc. Thus, you can designate Our Lady of Mercy Catholic High School to be the direct beneficiary of your contribution. This means that you are helping gift a student with a Mercy education! To select the school(s) to receive your contribution, please complete the GRACE Scholars Designation Form and send the form along with the “approved” TP1 and your payment to GRACE Scholars (this is in Step 2 above).

 

Who qualifies to receive the GRACE Scholarship?

Any resident entering a Catholic school for the first time from a Georgia public school, or a child eligible to enter kindergarten (or pre-kindergarten if an accredited program) with financial need may qualify for a GRACE scholarship.

 

What is the deadline to donate to GRACE for a tax credit?

 

Donations to GRACE may be made at any time.  However, if you would like to apply your tax credit to the current year, you must make your contribution by December 31 of the current year.  Please note: There is $51.5 million cap on tax credits for the entire state of Georgia and there are other SSO’s who are also contributing to the cap. Once the $50M cap is met, no tax credits will be granted for the rest of the year. Also, it takes time for donations to GRACE to be pre-approved by the state.

 

Questions?

 

Visit GRACE Scholars online at www.gracescholars.org or  contact Cynthia Launay-Fallasse, Director of Development, for more information.

Thank you for “GRACE-ing” future students with a Mercy education!