A tax credit gives you a dollar-for-dollar reduction of the tax you owe, while a tax deduction lowers your taxable income for the year. The value of a tax credit directly reduces the amount of taxes you pay.
FAQs | Tax
The maximum credit allowed per year is $1,000 for an individual and $2,000 for a married couple filing jointly. The maximum credit is $100,000 per year for a business. Donations of smaller amounts are welcomed, and tax credits will be figured at 50% (one year commitment) or 75% (2-consecutive year written commitment donation). View our Tax Example graphic here.
The law states that a “qualified business entity” includes limited and general partnerships, corporations, S corporations and limited liability companies that file as a partnership, corporation, S corporation, or sole proprietorship.
Your tax liability will be $0; however, any unused remaining credit may be carried over to each of the 3 years following the year of qualification.
Yes, you can donate from any state; however, we can only give state tax credit if you reside in Oklahoma. Those tax credits can only be used toward your Oklahoma state income tax liability.
Yes, your donation qualifies as a charitable donation on your Federal Tax Return in addition to the Oklahoma state tax credit.
Yes, however in 2022 the annual cap was changed from $1.5 million to $25 million. If that amount is exceeded, you will not lose tax credits. The overage credits will be used the following tax year and will reduce the Annual Tax Credit Cap for that tax year.
All EIGOs are required to file a report with the OTC in January of each year detailing contributions received during the prior calendar year. The Tax Commission calculates the total amount contributed to all EIGOs for the just completed tax year and the total amount of tax credits earned by such contributions and publishes a report on its website by February 15 of each year. Link to OTC Annual Announcement. It is important to note that as of the tax year 2022, the EIGO has NOT exceeded the Annual Tax Credit Cap.
Tax credits received from contributing through Forming Lives OK EIGO may be used when filing your taxes for the year the donations was made, to the extent that the Annual Tax Credit Cap is not exceeded.