Share This Article
Most of us accept taxes as a fact of life.
You earn income, you file your return, and if you owe Ohio income taxes, you pay what’s due and move on.
But what many Ohio taxpayers don’t realize is that an Ohio tax credit donation can give you real choice over where part of that money goes. Instead of sending every dollar into a general fund, state law allows eligible taxpayers to redirect a portion of their Ohio income tax toward scholarships and mission-driven organizations—within defined rules and limits.
Ohio tax credit At a Glance
-
If you owe Ohio income taxes, an Ohio tax credit donation through a Scholarship Granting Organization (SGO) may allow you to support scholarships while reducing your state tax liability.
-
This is different from a typical charitable deduction. It involves an Ohio tax credit and must follow specific state requirements.
-
Federal charitable giving rules change in 2026, which may affect how some donors plan the timing of gifts.
For many people, the moment of realization is simple but powerful:
Wait… I can choose where part of my Ohio tax bill goes?
How an Ohio Tax Credit Donation Works
Ohio permits individuals to contribute to approved Scholarship Granting Organizations (SGOs). In many cases, donors may claim a dollar-for-dollar Ohio income tax credit, subject to annual limits and program rules.
In plain English:
-
You support scholarships through a qualified nonprofit.
-
You may reduce the amount of Ohio income tax you owe.
-
You choose the mission and organization instead of sending funds to a general pool.
Important: This article provides general information, not tax advice. Eligibility, limits, and reporting depend on your individual situation. Always confirm details with your accountant or tax advisor.
Why This Ohio Tax Credit Feels Like a Win-Win
Giving always matters. An Ohio tax credit donation adds a stewardship layer that many donors find meaningful.
SGOs fund scholarships. Those scholarships help families access education they choose. Donors often appreciate being able to see tangible outcomes tied to their contribution, rather than feeling disconnected from the impact.
For taxpayers who already support education or faith-based missions, the Ohio SGO tax credit can align generosity with tax planning.
Looking Ahead: Federal Charitable Giving Changes in 2026
Starting in 2026, federal charitable giving rules are scheduled to change. These updates may influence how donors plan contributions and timing.
1. A new deduction for non-itemizers
Non-itemizers may claim a limited deduction for cash gifts to qualified charities:
-
Up to $1,000 for single filers
-
Up to $2,000 for married couples filing jointly
2. A new “floor” for itemizers
Itemizers may deduct only the portion of charitable gifts that exceed 0.5% of adjusted gross income (AGI).
Example: A donor with $200,000 AGI would need to give more than $1,000 before any deduction applies.
3. A reduced benefit for top-bracket donors
For donors in the highest tax bracket, the value of the charitable deduction may decrease from 37% to 35%.
Together, these changes suggest one theme: timing matters. Some donors may choose to accelerate or “bunch” gifts, while others may adjust long-term strategies. A tax professional can help determine what fits best.
What Ohio Donors Should Do Next
If you expect to owe Ohio income taxes and already support causes you care about, it’s worth exploring the Ohio tax credit donation option early.
-
Ask your accountant whether an Ohio SGO tax credit fits your situation.
-
Choose an organization aligned with your values.
-
Consider timing, especially ahead of 2026 federal changes.
Planning ahead almost always beats scrambling at tax time.
Where to Give
If you’re interested in supporting Catholic school scholarships through Ohio’s SGO program, you can start with:
Catholic Schools SGO (Catholic Best Choice)
If you don’t have a specific school in mind, you may also consider supporting scholarships at Royalmont Academy.
Frequently Asked Questions about the Ohio tax credit donation
Is an Ohio SGO contribution a tax credit or just a deduction?
In Ohio, SGO contributions are commonly pursued for an Ohio income tax credit, not merely a deduction. Credits reduce tax owed, subject to program limits and rules. Confirm details with your tax professional.
How much can I contribute and still receive the Ohio tax credit?
Ohio law sets annual limits. The optimal amount depends on your Ohio tax liability. Your accountant can help estimate a contribution that fits within the rules.
Do I need to owe Ohio income tax to benefit?
Generally, yes. Tax credits are most useful when you have Ohio income tax liability. If you owe little or nothing, the credit may not apply.
Can an SGO contribution eliminate my entire Ohio tax bill?
Typically, no. Ohio caps the amount of credit you can claim each year. However, contributions can still reduce what you owe.
Is an Ohio SGO contribution deductible on my federal return?
Federal treatment can be complex. In some cases, the IRS requires donors to reduce federal deductions by the value of state tax credits received. Always consult your accountant.
Is this tax advice?
No. This article provides general information only. Tax laws change, and individual outcomes vary. Consult a qualified tax professional before making decisions.
Read More
Cincinnati Public Schools to open ‘safe sleep lot’ for students experiencing homelessness
