Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 304 - Adjustments to Computed Tax and Tax Credits › Rule 701-304.32 - School Tuition Organization Tax Credit

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning prior to January 1, 2021, a school
				  tuition organization tax credit is available which is equal to 65 percent of
				  the amount of voluntary cash or noncash contributions made by a taxpayer to a
				  school tuition organization. For tax years beginning on or after January 1,
				  2021, the tax credit is equal to 75 percent of the amount of voluntary cash or
				  noncash contributions made by a taxpayer to a school tuition organization.
				  There are numerous federal revenue regulations, rulings, court cases and other
				  provisions relating to the determination of the value of a noncash
				  contribution, and these are equally applicable to the determination of the
				  amount of a school tuition organization tax credit.
(1)
Definitions.
The
				following definitions are applicable to this rule:
"Certified enrollment"
means the enrollment
				  at schools served by school tuition organizations as of October 1, or the first
				  Monday in October if October 1 falls on a Saturday or Sunday, of the
				  appropriate year.
"Contribution"
means a voluntary cash or
				  noncash contribution to a school tuition organization that is not used for the
				  direct benefit of any dependent of the taxpayer or any other student designated
				  by the taxpayer.
"Eligible student"
means a student residing
				  in Iowa who is a member of a household whose total annual income during the
				  calendar year prior to the school year in which the student receives a tuition
				  grant from a school tuition organization does not exceed an amount equal to
				  four times the most recently published federal poverty guidelines in the
				  Federal Register by the United States Department of Health and Human
				  Services.
"Qualified school"
means a nonpublic
				  elementary or secondary school in Iowa which is accredited under Iowa Code
				  section 256.11, including a
				  prekindergarten program for students who are five years of age by September 15
				  of the appropriate year, and adheres to the provisions of the federal Civil
				  Rights Act of 1964 and Iowa Code chapter 216, and which is represented by only
				  one school tuition organization.
"School tuition organization"
means a
				  charitable organization in Iowa that is exempt from federal taxation under
				  Section 501(c)(3) of the Internal Revenue Code and that does all of the
				  following:
1. Allocates at least 90
				percent of its annual revenue in tuition grants for children to allow them to
				attend a qualified school of their parents' choice.
2. Awards tuition grants only to children who
				reside in Iowa.
3. Provides tuition
				grants to students without limiting availability to students of only one
				school.
4. Provides tuition grants
				only to eligible students.
5.
				Prepares an annual financial statement certified by a public accounting
				firm.
"Tuition grant"
means a grant to a student
				  to cover all or part of the student's tuition at a qualified
				  school.