GRACE Scholars

GRACE Scholars, Inc. is a Student Scholarship Organization (SSO) that allows taxpayers in Georgia to contribute to GRACE and receive a 100% tax credit on their state income taxes. Money that would have gone to the state is now supporting Catholic Schools in Georgia. A donor can designate funds to a specific GRACE participating school. The donation can directly benefit Mercy Catholic students! All GRACE Scholarships are based on demonstrated financial need.

Tax Credit Limits:

Single/head of household – lesser of tax liability or $1,000

Married filing jointly – lesser of tax liability or $2500. Names and SSN’s are required for both taxpayers

Married filing separately – lesser of tax liability or $1,250

Owners of interests in pass through entities (S corporations, LLCs and partnerships) – Up to $10,000 per owner

Indicate your tax filing status as individual (married/single/head of household)

C corporations and fiduciaries (estates and taxable trusts) up to 75% of state estimated income tax liability

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

A tax credit is significantly more beneficial than a deduction. A credit reduces your Georgia taxes dollar-for-dollar. A deduction reduces the taxable income to which the applicable tax rate is applied.

For example, suppose a taxpayer contributes $1,000 to GRACE. A 100 percent tax credit reduces the taxpayer’s Georgia income tax by $1,000. On the other hand, the state income tax rate for most Georgians is 6 percent. So a $1,000 deduction from income would only generate a $60 reduction in taxes. The difference is 100 cents on the dollar for a credit and 6 cents on the dollar for a deduction.

No. The amount donated to GRACE cannot be claimed as a charitable contribution on your federal tax return because it is used as a tax credit on your state return. However, if you itemize on your federal return you can treat the donation as state or local income tax payments subject to the SALT cap. Please consult your tax accountant for further information.

The pre-approval assures that there are credits available to reimburse the total amount of your donation.

Any Georgia 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 demonstrated financial need may qualify for a GRACE Scholarship.