Scholarship Contributions
Conn. Gen. Stat. § 12-217rr
What’s New
New Tax Credit for businesses that make cash contributions to nonprofit organizations for scholarships to income-qualified students attending private elementary or secondary schools.
Legislation authorizes a new tax credit for cash contributions made to a youth development organization to fund programs such as after-school tutoring, mentoring programs and workforce preparedness training. The credit is only available for income or taxable years commencing on or after January 1, 2024, and prior to January 1, 2026. This legislation is effective January 1, 2024.
Description and Applicable Taxes
For income or taxable years commencing on or after January 1, 2024, and prior to January 1, 2026, a tax credit may be claimed, other than the liability imposed by Conn. Gen. Stat. §12‑707, for cash contributions made to a youth development organization to fund programs such as after-school tutoring, mentoring programs and workforce preparedness training. This tax credit program is administered by the Office of Policy and Management (OPM).
The tax credit may be applied against the taxes imposed under:
- Chapter 208 (Corporation Business Tax); and
- Chapter 229 (Income Tax).
Definitions
Youth development organization means a nonprofit organization that is exempt from taxation pursuant to Section 501(c)(3) of the Internal Revenue Code that:
- Provides evidence-supported interventions to high-risk youth to improve school and family engagement; and
- Offers skills development, transitional employment, job placement, and support to assist young adults to be employed and self-sufficient.
Tax Credit Amount
A tax credit is allowed in an amount equal to 50% of the contribution made during the income or taxable year, provided:
- The credit allowed under the tax imposed by Chapter 208 (Corporation Business Tax) must not exceed $100,000; or
- The credit allowed under the tax imposed by Chapter 229 (Income Tax) must not exceed $20,000.
Carryforward and Carryback Limitations
The credit allowed must be claimed for the income or taxable year in which the contribution was made.
How to Apply
Any entity or individual subject to Chapter 208 (Corporation Business Tax) or Chapter 229 (Income Tax) of the general statutes may apply to the Office of Policy and Management (OPM) to reserve an allocation for the credit in the amount of the contribution such entity or individual intends to make.
Any entity or individual that is approved must make the intended contribution to the youth development organization no later than 120 days after the date of receiving the approval.
After an entity or individual has made the contribution, the entity or individual must apply to OPM for a tax credit voucher. Documentation and independent certification, pertaining to the amount of the contribution and certifying that the contribution was made to the youth development organization, must be attached to the application.
Visit OPM’s website at www.ct.gov/OPM for more information regarding the application process.
Where to Get Additional Information
Direct inquiries to:
Connecticut Office of Policy and Management
450 Capitol Avenue
Hartford, CT 06106
(860) 418-6200
Statutory and Regulatory References
Conn. Gen. Stat. § 12-217rr
Page Last Reviewed or Updated: April 4, 2024