December 25, 2009
Tuition assistance fund set up: a boon for business, help for families
By PAUL R. LEINGANG (Message editor)
2009 brought a new law in Indiana that may have a significant impact on businesses, corporations and private schools in southwestern Indiana and throughout the state.
The State of Indiana approved a measure to set up Scholarship Granting Organizations (SGOs), providing tax credits for contributors and tuition assistance for new students in accredited private and faith-based schools.
The new law, within certain limits, provides a corporation with a 50 percent tax credit for a contribution made to an SGO. A gift of $100,000 would reduce the state taxes by $50,000. In addition to the credit, a federal tax deduction may also be possible.
In order to take advantage of these benefits, a new tax-exempt corporation is being formed, to be known as The Tuition Assis-tance Fund of Southwestern Indiana.
The tax credits are limited in the law to $2.5 million for the first year, meaning corporations, businesses and banks could contribute a total of $5 million to assist students. And once that total contribution has been made, all of the available tax credits from that particular program are used up.
Tax credits become available on Jan. 1.
The board of this corporation is expected to include representatives from Evansville Day School, Evansville Christian School, the Catholic Diocese of Evansville and others who may wish to participate.
The local SGO is set up to serve new students attending any accredited private school in a 12-county area of southwestern Indiana — Posey, Vanderburgh, Warrick, Spencer, Gibson, Pike, Dubois, Knox, Daviess, Sullivan and Green counties.
The board of the local SGO has decided to provide scholarships of $3,000 to eligible students.
To be eligible, the student’s family must have income no greater than twice the federal poverty level.
“New” students include kindergarteners and students transferring from a public school.
In 2010, the local SGO will set up an office, to be staffed by a director, to manage the work required. To guarantee fairness, a third-party service will examine applications to determine eligibility for scholarships.
Linda Cox, executive director of the Catholic Foundation of Southwestern Indiana, Inc., has guided the early steps in setting up the corporation.
For information, contact Linda Cox at (812) 424-5536.