Are there situations where a contribution to a school tuition organization (STO), as defined in statute, would not qualify for the tax credits?
Posted: May 13, 2014
Yes. Your donation to the school tuition organization will not qualify for the credits if you designate the donation for the direct benefit of your dependent. Your donation will also not qualify if you designate a student beneficiary as a condition of your contribution to the school tuition organization. Additionally, the tax credits are not allowed if you agree with another person to designate each other’s contribution to the school tuition organization for the direct benefit of each other’s dependent, a practice commonly known as swapping.