2016-2017 Parental Tax Credit

7/3/2016

URGENT – “NEW” 2016 PARENTAL TAX CREDITS AVAILABLE:
$2 MILLION AVAILABLE RIGHT NOW – EXPECTED TO GO FAST!!!

Dear Parents & School Officials

$2 MILLION AVAILABLE TODAY: There is a great deal of uncertainty right now in “how” the $10 MILLION of scholarship funding will be allocated to families. The new Proviso 109.15 specifically prioritizes prior year recipients (see below). Does that mean new families will be left out? Will current families get priority in being awarded a grant, but grants will not be in the full $11,000 new maximum? Will current families receive the same amount as last year, more, less? Uncertainty abounds … but one thing that is certain is a “new” $2 MILLION batch of 2016 Refundable Parental Tax Credits are available TODAY!!!

  • 2016-2017 Budget Proviso 109.15(C)(6) “The department shall develop a process to prioritize the awarding of grants to eligible incumbent grant recipients at eligible schools.”

WE EXPECT THESE TO GO FAST:  You all know we politically oppose these Parental Tax Credits for many technical, legal & practical reasons (see our 6/28/2016 Update) … but $2 MILLION is available today for parents that want certainty in knowing they will eventually get “something”.  As they say, a bird in the hand is worth two in the bush.

The Process (as best we understand it):

  1. Parents or legal guardians make their payment (i.e., drop a check in the mail) to an eligible school for an exceptional needs student’s tuition. (Yes, we realize and have told legislators that this objectively only benefits the wealthy who can afford to pre-pay tuition upfront. Contact your legislators to voice your opinion too.)
  2. Parents or legal guardians complete the new Form TC-57A and submit it to the SC Department of Revenue (DOR). (They initially said you had to include documented proof of the student’s eligibility (i.e., attach your child’s STEP TWO) – but that requirement seems to have disapeared from their website.  Retain for your records). The TC-57A form can be emailed to DOR at TaxTech@dor.sc.gov. The tax credit claimed can not exceed the amount paid out of pocket for the student’s tuition, up to $11,000 (the new maximum).
  3. The DOR confirms the “reservation” of the family’s credit, as long as the statewide $2 million cap hasn’t been met.
  4. When the family files their South Carolina income taxes (next April 15th, 2017), the value of the tentatively approved credit is used to complete the I-361 form.(Yes, we realize and have told legislators that is a needlessly long time to wait for financial help – and this again objectively only benefits the wealthy who can afford to pre-pay tuition upfront … and wait for a refund. Contact your legislators to voice your opinion too.)

CREDITS AWARDED ON A FIRST-COME, FIRST-SERVED BASIS: Please hurry before they are all claimed. The new Form TC-57A can be emailed to DOR at TaxTech@dor.sc.gov.

QUESTIONS SHOULD BE REFERRED TO DOR: This is a 100% DOR managed tax credit. We know it can be complicated and there is a lot of conflicting information and unanswered questions. We wish we could help more, but unfortunately all questions should be referred directly to DOR.  (But if you encounter problems applying, or DOR tells you that you don’t qualify, email us the issues and we may be able to help advocate on your behalf.)

Sylvan D. Proser
803-898-5706
Sylvan.Proser@dor.sc.gov
TaxCredit@dor.sc.gov
ExceptionalSC@dor.sc.gov

THANK YOU for your support of the program and our kids. Please spread the word to other eligible families at your school before all $2 million of this valuable funding is claimed. We will also be posting this information to Facebook (www.facebook.com/palmettokidsFIRST).

Olga Lisinska, Executive Director
info@palmettokidsFIRST.org  
843-501-1842 (office)

2016-07-03 - Bird in the hand

NOTE, and this is a frequently asked question, but the total ECENC financial assistance can not exceed $11,000 (new maximum) or the full cost of tuition, whichever is less. That means you may be eligible for a $11,000 parental tax credit, or a $11,000 scholarship, or a even a combination of the two totalling $11,000.  But no, you can’t get a $11,000 parental tax credit & a $11,000 scholarship.

CAUTION: 

UPDATE: Income taxable? Consult your tax adviser to determine if the “refundable parental tax credit” is taxable (Federal & State) as income.  We have confirmed reports that the lobbyist and “paid” advocates that pushed the parental tax credit are now “confessing” to parents that the refundable parental tax credit will  be subject to Federal & State income taxes.  As such, we estimate the $2 million of refundable parental tax credits will create a tax profit windfall for Washington, D.C. of $700,000 (at a 35% Federal tax rate) and $140,000 for SC (at a 7% SC tax rate).  SFO SCHOLARSHIPS ARE 100% INCOME TAX FREE TO RECIPIENTS by federal law.  The SC Department of Revenue has been unable to confirm to us verbally or in writing that this new “refundable parental tax credit” will be Federal & State income tax free.

UPDATE:  Impact on income based benefits?  We have had numerous parents concerned that the imputed income of the parental tax credit will substantially impact their government benefits and/or items such as they Affordable Care Act costs / healthcare. Please consult your applicable adviser.

LEGAL DISCLAIMER:  The above is for general informational purposes only and should not be construed as legal or tax advice. Palmetto Kids FIRST Scholarship Program, Inc. does not provide legal or tax advise. All parties should consult their tax adviser or attorney.