Income tax credit deductions for donations to increase next year; will help funding for Madison

Starting Jan. 1, 2011, tax credit deductions will increase for donations to public institutions, including public education.

Idaho Sen. Brent Hill, the sponsor of the bill, said in an e-mail that the measure “will temporarily increase the existing income tax credit for donations” to public organizations. The new law, he said, is all in an effort “to help cope with recent budget reductions.”

Currently, tax deductions are limited to 20 percent of the donation to public organizations. Under the new law, deductions will be increased to 50 percent. The annual amount of the tax credit will be raised from $100 to $500—for couples filing on a joint return, the total tax credit could equal up to $1,000.

Sen. Hill further explained in the e-mail that donated funds can be sent to an organization of the donor’s choice.

“Contributions can be designated to go to the school district as a whole, to individual schools, or even to specific programs such as the orchestra or athletics,” he stated. “Donations to the Madison Education Foundation also qualify.”

Sen. Hill believes that significant contributions could be generated from the measure. “A donor who once thought he could only afford to give, say, $100 to the school could now give $400 and not have it cost him much more than the $100 he was willing to give up,” he wrote in the e-mail.

Madison School District will also benefit from the new law.

“The generosity of our patrons is particularly helpful to maintaining important programs for children,” said Dr. Geoffrey Thomas, Superintendent of Madison. “Any and all financial contributions are needed and welcome during this challenging financial period.”

The new law will remain in effect until 2016. Patrons can view the bill itself at the state web site. Click on “Statement of Purpose / Fiscal Note” to read the law’s full implications