Qualified Donations & Tax Credit Approval Process
Information for the Donor
What is a qualified donation?
A qualified donation is any monetary (check, credit card, payroll deduction, electronic funds transfer) or marketable securities (stocks and mutual funds) donation made to an approved scholarship foundation. A donor is prohibited from identifying a specific scholarship recipient.
- $500 is the minimum donation eligible for tax credits in a taxable year.
- $125,000 is the maximum amount of donations eligible for tax credits in a taxable year.
- There is no minimum or maximum donation limitation for businesses.
Donations made prior to the date of the Department of Education’s Preauthorization Notice, more than 180 days after the date of the Preauthorization Notice, or in excess of the amount preauthorized, will not be approved for tax credits.
How does the Donor obtain the Preauthorization Notice?
The donor contacts an approved scholarship foundation (see list on the main EISTCP webpage) so that an authorized representative of the foundation can submit a preauthorization request on the donor’s behalf using VDOE’s secure Web-based system. All preauthorization requests submitted by scholarship foundations on behalf of donors will be immediately approved for the amount of the request, as long as the request meets the minimum and maximum donation criteria (see below), and tax credits are available to preauthorize. The submitting scholarship foundation will be able to immediately email the Preauthorization Notice issued by VDOE to the donor. The donor must provide a completed Request for Preauthorization for Tax Credits form (available on the main EISTCP webpage) to the scholarship foundation. (Full SSNs must not be emailed, so a full SSN is not included on Preauthorization Notice issued by VDOE upon approval.)
The Donor mails the completed Request for Preauthorization for Tax Credits form to Department of Education, Tax Credit Programs 23rd Floor, PO Box 2120, Richmond, VA 23218-2120. The paper request will be processed manually and the Preauthorization Notice will be mailed directly to the donor via U.S. Mail. This option should not be selected if a donation must be made by a deadline.
What is the tax credit approval process?
Once the Department has issued a Preauthorization Notice, within 180 days of the date of the Preauthorization Notice, the donor sends a qualified monetary or marketable securities donation with the completed Preauthorization Notice to the scholarship foundation.
The scholarship must submit the completed Preauthorization Notice and proof of the date and amount of donation within 40 calendar days from the date of the donation using the Department’s secure Web-based system. For donations of marketable securities, a scholarship foundation must submit evidence that the marketable securities were sold and converted into cash no more than 21 calendar days after the date of the donation.
After VDOE reviews the donation to ensure that it is a qualified donation, made within 180 calendar days from the date of the Preauthorization Notice, and received from the foundation within 40 calendar days form the date of the donation, VDOE will approve the donation for a tax credit (up to the amount preauthorized) within 30 calendar days and the tax credit certificate will be available to the scholarship foundation to email to the donor.
**Please be aware that any Notice not acted upon by the donor within 180 calendar days of issuance, or made in a timely manner but not submitted by the scholarship foundation to VDOE within 40 calendar days, will become void and not eligible for the tax credit.**