What is the Education Opportunities Act?
This Act passed by the Iowa Legislature in 2006, allows Iowa taxpayers to receive an Iowa Tax Credit equal to sixty-five percent (65%) of the total amount of voluntary cash contributions made to a School Tuition Organization such as Legacy of Grace (LOGSTO).
How does a tax credit work? Is it better than a tax deduction?
A tax deduction simply reduces the total amount of income on which your Iowa tax is computed. A tax credit is taken directly off the amount you owe in Iowa State taxes, and it is better than a deduction. As an example, suppose you originally owed $2,000 in state income taxes. With this tax credit, if you donated $1,000 to Legacy of Grace (LOGSTO), you would receive a tax credit (65%) of $650 which would be taken off your income tax bill. You would only pay $1,350 in state income taxes after applying the tax credit. LOGSTO would use the $1,000 to give tuition grants to qualifying students wishing to attend one of our member schools.
What about my Federal income tax?
Please consult with your tax advisor as tax laws may have changed.
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