Indiana's School Scholarship Tax Credit Program* is administered by state-approved Scholarship Granting Organizations (SGO). Scholarships are awarded to students from income-eligible households enrolled in tuition-based schools that choose to participate. The funds for these awards are raised through gifts from individuals and businesses who, in return, receive Indiana state income tax credits and a potential federal income tax deduction.
Individuals or businesses with Indiana state income tax liabilities are eligible to receive an Indiana state income tax credit equal to 50 percent of their gift amount to a SGO. Because a SGO is a 501(c)3 organization,these gifts are eligible for a federal income tax deduction as well.
*This is not the Indiana Choice Scholarship program, also known as the “voucher” program.
SSTC and Required Minimum Distribution (RMD) for IRA/401K
The Indiana Department of Revenue's current position is that direct transfers, done in concert with meeting the federal Required Minimum Distribution (RMD) rules, from an IRA/401(k) to the Institute for Quality Education (IQE) are eligible for the School Scholarship Tax Credit (SSTC). As such, when taking your RMD distribution, you may instruct your IRA/401(k) administrator to transfer funds directly to IQE, with additional instructions that these funds, minus an administrative fee, are to be given to Scecina. You are then eligible to take advantage of a 50 percent credit against your state-tax liability.
Also, any contribution to Scecina made, either directly or through the IQE, as a result of an RMD distribution is not subject to federal or state income taxation.