Under the Louisiana Tuition Donation Credit (TDC) Program, any company or individual that pays Louisiana income tax may receive a 95% tax credit for approved donations to Arete Scholars.
Frequently Asked Questions
Louisiana Tax Credit FAQ's
Who is Arete Scholars?
Arete is a nonprofit that helps economically disadvantaged children reach their highest potential through educational opportunity. Since 2010, Arete has awarded over 7,000 K-12 scholarships to students in 10 states. Scholarships are funded primarily by budget-favorable tax credit programs.
Is this for real? An individual or corporation can redirect 100% of its state tax liability to K-12 education?
That’s right. The Louisiana Tuition Donation Credit (TDC) Program allows donors to receive a 95% state tax credit for approved contributions to Arete Scholars. In turn, Arete awards need-based K-12 scholarships to Louisiana children.
The portion of the donation not eligible for a state tax credit may also be eligible for a charitable federal tax deduction.
Why would Louisiana do this?
Low-income students historically underperform in comparison to their peers, graduating high school at much lower rates and enjoying fewer career opportunities. Tax credit scholarships change that narrative by granting opportunities proven to help children succeed. Second, the program results in significant savings to the state by setting scholarship amounts lower than per student spending in local schools. Everyone wins when you can obtain improved academic results at a significantly lower cost.
Given private school tuition rates, is a $4,200-$4,700 scholarship enough for low-income families?
Yes. In Louisiana, the average private school tuition is about $6,000, and many schools are deeply committed to educating students from all socio-economic backgrounds. A combination of parental contribution and school financial aid can make up any differences.
Who are your corporate partners?
More than 30 corporations of all sizes have generously supported our efforts. Some of our larger partners include Walgreens, Equifax, Dollar General, Waste Management, Staples, Gap, Hormel Foods, and the Chick-fil-A Foundation.
Who is eligible to donate?
Any corporation or individual that pays Louisiana income tax is eligible for a 95% tax credit for qualified donations. Donations are accepted anytime, and a nonrefundable income tax credit is earned when a donation is made. Any unused credit may be carried forward for up to three years.
How does the program affect public education?
Louisiana believes that all of its children deserve a great education, whatever schools their parents choose. Understanding that one-size-fits-all solutions are seldom best, the state supports traditional public, private, charter, virtual, and home school options for its students. The program ensures taxpayer savings, and these savings can remain invested in local schools.
What is the process for making a donation and receiving a credit?
Complete the simple donation commitment form HERE. You may donate up to 100% of your estimated Louisiana income tax liability and will earn a 95% state tax credit when the donation is made. By law, Arete may retain up to 5% for administrative expenses. The state will provide tax credit donation receipts to be filed with returns.
The portion of the donation not eligible for a tax credit is also be eligible for a charitable federal tax deduction.