MONTGOMERY, AL — The Alabama Senate on Wednesday approved a measure to amend the Alabama Accountability Act of 2013 to increase the income tax credit claimed by certain Alabama taxpayers.
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As it stands, a taxpayer may claim a tax credit amounting to 100% of the total contributions the taxpayer made to a scholarship granting organization for educational scholarships during the taxable year for which the credit is claimed — up to 50% of the tax liability of the taxpayer, not to exceed $50,000 per taxpayer or a cumulative amount of $30,000,000 annually.
The bill this week will increase the income tax credit a taxpayer may claim, up to 100% of the individual taxpayer’s liability, in an amount not to exceed $100,000 for contributors made to a scholarship granting organization (SGO) for educational scholarships.
What’s more, once signed into law the bill will extend the period for which SGOs must expend scholarship funds to three calendar years.
Sen. Dan Roberts, a Republican from Mountain Brook, sponsored the bill and said since the Accountability Act was passed into law in 2013, it has raised over $176 million from the private sector to fund educational opportunities for students who otherwise could not afford them.
“However, private sector funding of Scholarship Granting Organizations (SGO) has ebbed and flowed over the years for various reasons, including changes in the federal tax code,” he said. “One of the most important elements of this bill is that it allows SGOs to have financial consistency in their budgeting and planning.”
Roberts then explained that once a child is accepted into a participating school, the student’s scholarship will be there to support them for years to come.
“The Alabama Accountability Act creates life-changing situations for students and their families, enabling an opportunity for school choice and enhancing the quality of life and learning for so many Alabamians,” he said. “More than 97 percent of students who receive these scholarships renew them annually. That statistic alone is a true testament to the meaningful benefits this program offers to our school children.”
The bill will now move to the Alabama House of Representatives for consideration.
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