Individual taxpayers are allowed to donate up to 50 % of their calculated Alabama income tax (up to a maximum of $7,500 per year) to a SGO and receive a tax credit equal to the amount contributed.

C Corporations are allowed to donate up to 50 % of their calculated Alabama income tax (no maximum) to a SGO and receive a tax credit equal to the amount contributed.

Contributions qualify for Federal income tax deductions as a charitable contribution because the charity (SGO) must have 501(c)(3) status.

The Act allows for contributions be made in calendar year 2013 and future years. The State of Alabama has a state wide limit of $25,000,000 per year in allowable credits, which will be provided on a first-come, first-serve basis.   To reserve your credit, go to the Alabama Department of Revenue Website via "My Alabama Taxes" at www.revenue.alabama.gov to create an account. Your clients will need the amount of their prior year's Alabama Adjusted Gross Income and their social security number to reserve the credit amount. Taxpayers can reserve the credit before making the contribution to the scholarship-granting organization (SGO).