Frequently Asked Questions
The Oklahoma Equal Opportunity Education Scholarship Act (68 Okla. Stat. §2357.206) allows individuals and businesses to receive Oklahoma state income tax credits for donating to a scholarship granting organization (SGO) recognized by the Oklahoma Tax Commission. The SGO then uses those contributions to provide scholarships for eligible students to attend an accredited private school. You can download a copy of the Oklahoma Equal Opportunity Education Scholarship Act here: Oklahoma Legislation
A SGO is a 501(c)(3) not-for- profit organization approved by the Office of the Secretary of State, the IRS, and the Oklahoma Tax Commission. It serves as the central administrative service for member schools while allowing significant local school control over scholarship dollars.
The SGO will insure that scholarship assistance is provided to the neediest of families; assures the integrity of the Board and staff members; keeps full and accurate records, and reports to the Governor and Legislature every four years.
The Crossover Scholarship Fund (CSF) is a not-for-proft Oklahoma corporation organized as a SGO in compliance with the Oklahoma Equal Opportunity Education Scholarship Act. It is an independent, tax-exempt entity organized under Section 501(c)(3) of the Internal Revenue Code. The CSF awards scholarships that allow eligible students to attend Crossover Preparatory Academy, a private school accredited by the State Department of Education (SDE). The CSF Board will monitor the CSF compliance with the Law and ethical standards. The CSF staff will be available to assist all partners to optimize the opportunities created by the CSF. Send general queries to firstname.lastname@example.org
Yes. An independent study found tax-credit scholarships provided through programs like ours actually save the state money. Based on the state’s per-pupil spending on common education, the fiscal return to the state is $1.24 of savings for every $1 of tax credit issued. (When accounting for all funding sources (federal, state and local taxes), the fiscal return is $2.58 for every $1 of tax credit issued.) The fiscal impact to the state is determined by the trade off of tax revenue and per-pupil expenditures.
Schools and Students
A school must: be accredited by the State Board of Education or an accrediting association within the Oklahoma Private School Accreditation Commission; be in compliance with all applicable health and safety laws and codes; have a stated policy against discrimination in admissions on the basis of race, color, national origin or disability, and ensure academic accountability to parents and guardians of students through regular progress reports.
A student must be of school age, be lawfully present in the United States; accepted by a participating school; and be a member of a household that has an annual income below 300% of free/reduced lunch eligibility – OR – attend, or live in the attendance zone, of a public school designated as “in need of improvement” by the State Board of Education OR; attended an Oklahoma public school with an individualized education program (IEP).
The 2018-19 upper income limits defining ELIGIBLE families are:
Family size of 2 $93,852
Family size of 3 $118,383
Family size of 4 $142,914
Family size of 5 $167,445
Add $24,531 for each additional family member.
Once a student qualifies for a CSF scholarship, that student remains eligible until high school graduation, or being 21 years of age, whichever occurs first. Additionally, any siblings automatically qualify. Therefore a family only needs to become eligible once.
All qualifying students that attend Crossover Preparatory Academy will receive the maximum allowed scholarship. It is the conviction of both Crossover Preparatory Academy and CSF that a child's access to an excellent education should not be dependent on his or her parents' ability to afford one.
For 2017-18, the Scholarship Act allows an eligible student to receive up to $6,541.51 annually. This is 80% of the statewide annual average expenditure per pupil ($8,176.89) for the 2017-2018 school year, the latest year reported by the State Department of Education).
CSF will award the maximum amount allowed under state law to all qualifying students that attend Crossover Preparatory Academy.
Scholarship funds will be sent by check, jointly payable to the student’s parents/guardians and Crossover Preparatory Academy to Crossover Preparatory Academy.
No, as long as the scholarship award is not in excess of the cost of tuition, transportation and fees associated with attending the school. The scholarships are for tuition and fees. Such scholarships are universally tax-exempt.
A low income student is defined as eligible for free and reduced lunch based upon family income. According the federal guidelines that is 185% of the Federal Poverty Level. Therefore the 2017-18 upper income levels by family size is:
2 – $31,284
3 – $39,461
4 – $47,638
5 – $55,815
Additional person add $8,177.
It is estimated that 62% of public school students in the state meet this standard. The law suggests that roughly 62% of the scholarship fund go to low income students attending private/independent schools. We will monitor this. It is very likely that this goal will be reached naturally without any intervention.
These students are eligible for the CSF scholarship. If they are properly certified and documented, “special needs” students may receive up to $25,000 per year for tuition, fees and transportation. HB 1693 expanded the definition of disability so that all worthy students may now qualify. See the legislation, or call the CSF staff, for a complete description.
Tax credits directly reduce the taxes you pay on a dollar-for-dollar basis. An Oklahoma state income tax credit is like a gift card from the State of Oklahoma that you can use to pay your state income taxes. For example, with a $1,000 tax credit from the State of Oklahoma, you can pay $1,000 in state income taxes.
Our credits are valued at 50% of a donation for a one-year donation commitment and, effective January 1, 2016, donors making a two year commitment will enjoy a 75% tax credit for both years that they donate to Crossover Preparatory Academy through the CSF.
Regardless of donation amount, the maximum annual tax credits allowable are $1,000 for individual filers; $2,000 for a family filing jointly and, for all forms of businesses, a very generous $100,000 annually.
Tax deductions reduce the base of taxable income upon which you pay taxes, which translates into a reduction on the amount of taxes that you pay; however, the value of tax deductions depends upon a number of factors specific to each taxpayer, including 1) your taxable income which determines your tax rate, 2) the application of phase outs of certain deductions, and 3) whether the alternative minimum tax applies to your financial situation.
Both tax credits and tax deductions help to reduce the overall taxes that you pay, but tax credits are much more valuable because tax credits directly reduce your taxes dollar-for-dollar.
The law states that a “legal business entity” includes legal and general partnerships, corporations, subchapter S corporations and limited liability companies.
The law does not address “sole proprietorships” or any other form of business structure. If a donor/taxpayer believes that their business should be treated as a “legal business entity”, each taxpayer must seek a separate letter ruling from the Oklahoma Tax Commission. See OTC Rules Chapter 1: Administrative Operations, 710:1-3-73-f, Opinions and letter rulings. It states:
(f) Requests for letter rulings. Requests by individuals or groups of taxpayers for letter rulings will be honored by the Commission, at its discretion, and in consideration of the time and resources available to respond to such requests. Requests for letter rulings should be made to the Tax Policy and Research Division, Oklahoma Tax Commission, 2501 N. Lincoln, Oklahoma City, OK 73194.
Oklahoma Tax Credits
Any individual, family or legal business entity paying taxes in Oklahoma is eligible to contribute to CSF and receive tax credits.
Any individual, family or business entity paying taxes in Oklahoma is eligible to contribute to the Fund and receive tax credits. All donors making a single year donation are eligible for Oklahoma tax credits of 50% of the allowable donation amount. The amount of tax credits may not exceed $1,000 for individual filers, $2,000 for those filing jointly, and $100,000 for businesses.
Donors who pledge in writing to give the same amount over TWO years will receive a 75% tax credit for BOTH years. The annual tax credit limitations apply.
All donors (individuals, families and businesses) should always consult their tax preparer for their specific situation.
Should statewide contributions earn over $3.5 million in annual tax credits, and that ceiling not be raised, the credits for all contributors will be reduced pro-rata. This is very unlikely to happen in the near future.
Current law allows for a total of $5 million in tax credits for a year. If statewide donations exceed that amount, the amount of your tax credit will be reduced on a pro-rata basis to ensure that each donor receives the same percentage of tax credit for their donation. Credits earned but not allowed due to exceeding the $5 million limit will be authorized to be used the next immediate tax year and applied to the next year's limit.
All SGOs are required to file a report with The Oklahoma Tax Commission on or before January 10 of each year detailing contributions received during the prior calendar year. The Tax Commission will determine the actual percentage of tax credit available to donors on or before February 15 of each year.
Your tax credits may be used in the immediately following year. For example, tax credits received from a 2017 CSF donation may be used to offset income taxes on your 2017 Oklahoma tax return filed in 2018. In addition, any tax credit not used in a given tax year may be carried over for up to three years. The tax credit from a scholarship granting organization is not refundable. You may only use this tax credit as an offset to Oklahoma income taxes.
Donations to CSF that are postmarked by December 31, 2017, will count as charitable contribution made during 2017.
The tax credit that you get for donating to CSF in 2017 may be claimed when you file your tax return for 2017. Federal and state tax deductions for your charitable contribution to CSF in 2017 may also be claimed when filing your 2017 tax returns.
Making Donations to CSF
Donors may contribute by sending a check made out to Crossover Scholarship Fund. Send the check, along with a completed donation form, via U.S. mail to Crossover Scholarship Fund, 940 E. 36th St. N., Tulsa, OK 74106.
No. Internal Revenue Code regulations do not allow for particular individuals to receive direct benefit from a gift by a donor.
The Scholarship Act requires that the CSF disburse at least 90% of the money it receives each calendar year in the form of scholarships for eligible students during the following academic year. The CSF cannot retain more than 10% of contributions to pay administrative costs.