On June 27, 2012, New Hampshire’s legislature enacted the Education Tax Credit Program (ETC Program). The ETC Program was challenged in New Hampshire’s judicial system and on August 28, 2014 the State Supreme Court allowed the ETC Program to remain in place.
What is it: The ETC Program allows business owners operating in New Hampshire to contribute money in a tax-advantaged manner to an eligible educational scholarship organization such as the Children’s Scholarship Fund New Hampshire.
The Children’s Scholarship Fund (CSF) is a 501(c)3 non-profit organization that provides educational information and scholarships to New Hampshire students who are struggling in their current school. The CSF allows disadvantaged New Hampshire students to attend a school that is a better fit for them and their learning needs. Through CSF and the ETC Program, businesses can directly improve the quality of education for New Hampshire students.
How it works: The ETC Program provides a tax credit to businesses that make an eligible contribution(s) to an approved scholarship organization. The credit is claimed against either the business enterprise tax or the business profits tax or apportioned against both for 85% of the contribution! The contribution is also deductible for federal tax purposes. The Credit Program maximizes a business’s philanthropic dollars.
Proper tax planning and an understanding the mechanics and timing of the Education Tax Credit Program are vital. Currently, a business must apply to the NH Department of Revenue Administration between January 1st and June 15th for approval to make a contribution for that year. Additionally, a business must make the contribution to an approved scholarship organization within 60 days of being approved by the DRA or no later than July 15th. Lastly, the ETC Program has a cap for total allowed contributions and the maximum contribution allowed by any one business.
The 2017 Education Tax Credits for business are available starting January 1, 2017. If you have questions regarding the ETC Program and tax benefits for your business, please contact a member of our team.