When planning your year-end charitable giving, don’t forget one new opportunity for California businesses and individuals that pays you back – the College Access Tax Credit.
To increase funding for Cal Grant B Access awards to college students, the California Educational Facilities Authority (CEFA) has teamed up with the Franchise Tax Board (FTB) to provide a tax credit for contributions made to the College Access Tax Credit Fund.
Most contributions decrease your taxable income dollar for dollar. Tax credits, however, offer more value as a dollar-for dollar reduction in TAX. For 2014, this credit treats 60% of your contribution as a direct tax credit, making it an excellent tool for lowering your state tax bill.
The credit runs from 2014 to 2016 and is limited to the first five hundred million dollars of credit for each calendar year.
There are two simple steps required to claim your share of the credit.
1) Go online at https://cefa.treasurer.ca.gov/Home/Application to print out or fill out a simple application to reserve your credit. You may choose to submit the application online. It asks for your name or business name, address, and proposed contribution. You will receive a confirmation.
2) Make the contribution by 12/31/14 for the 60% tax credit. The credit is 55% if you wait until 2015 and 50% during the third and last year, 2016.
The credit for 2014 will be calculated at 60% but any excess over your net state tax carries over for up to six years. This means 2014 is a great year to make a contribution to this fund, and receive the highest possible value in return.
More information can be found at http://treasurer.ca.gov/cefa/catc/
For more on this, and other creative tax solutions, please contact us at LSL CPAs & Business Advisors at 714.569.1000
By Carolyn Bryant, CPA
