A Guide to the Ohio SGO Tax Credit

If you’re an Ohio resident, there’s a valuable tax benefit you might not be fully utilizing: the Ohio SGO (Scholarship Granting Organization) tax credit. This credit allows you to directly support educational institutions while receiving a dollar-for-dollar reduction in your state tax liability.

What is the Ohio SGO Tax Credit? 

The Ohio SGO tax credit provides a direct reduction in your state tax liability for donations made to certified Scholarship Granting Organizations. These organizations grant scholarships to students, typically in private or parochial schools, to help cover educational expenses. The credit is designed to incentivize charitable giving to education while giving taxpayers control over where their money goes. 

How Does It Work? 

Here’s how the credit works: 

• Dollar-for-Dollar Credit: For every dollar you donate to a certified SGO, you receive an equal reduction in your Ohio state taxes, up to certain limits.
• Contribution Limits: The maximum credit is $750 per person. For married couples filing jointly, each spouse can claim $750, for a total of $1,500. However, each spouse must make their donation separately to qualify for the full amount.
• Nonrefundable Credit: It’s important to note that this is a nonrefundable credit. This means it can only reduce your tax liability to zero; you won’t receive a refund for any excess credit. Therefore, if your Ohio tax liability is less than your donation, you’ll only benefit up to the amount of your tax liability.

Ensuring Your Contribution Counts 

To qualify for the credit, your donation must be made to a certified SGO listed on the Ohio Attorney General’s website. However, not every school may be individually listed. Many schools fall under broader organizations, such as a diocese, that handle scholarships on their behalf. If you don’t see your preferred school listed, it’s worth asking the school how to direct your donation to ensure it qualifies for the credit. 

Additionally, keep in mind that organizations must recertify annually. If your chosen organization hasn’t completed its certification for 2024 yet, you may need to monitor the list throughout the year to ensure your donation is eligible. 

Need More Information? 

For more details on the Ohio SGO tax credit, visit the Ohio Department of Taxation or the Ohio Attorney General’s website. If you have questions about how to take full advantage of this credit before tax season, don’t hesitate to reach out to your Truepoint team for guidance.