For tax years commencing Jan. 1, 2015, and thereafter, the Alabama Future Workforce Initiative (AFWI) (Act 2014-147) allows a taxpayer who files a state income tax return (and is not a dependent of another taxpayer) to claim a tax credit for donating to the Alabama Department of Postsecondary Education in support of the Career-Technical Dual Enrollment Program. The donor may be eligible to receive up to 50 percent of the total donation back in the form of a tax credit.
Contributions to the Career-Technical Dual Enrollment Program help pay for student scholarships (tuition, fees, books, materials and supplies) for eligible high school students to enroll in college-level career-technical Education courses at Alabama community colleges.
Donations of any amount may be contributed. However, limitations apply to the tax credit that can be claimed. The tax credit can be claimed by a taxpayer in an amount equal to 50 percent of the total contribution made to the Department of Postsecondary Education during the taxable year for which the credit is claimed. Such credit may not exceed an amount greater than 50 percent of the taxpayer’s total Alabama income tax liability, and in no case more than $500,000 for any given tax year. A taxpayer may carry forward all or part of a tax credit granted to the taxpayer for a period of up to three years.
Anyone can donate, although, only taxpayers filing Alabama state income tax returns (and who are not a dependent of another taxpayer) can receive the tax credit. A taxpayer is defined as an individual, a married couple filing jointly (regardless of whether or not they have children in school), a limited liability company, a corporation, or any other business entity lawfully organized and created under the laws of Alabama or other state.
A tax credit is a dollar-for-dollar reduction in the actual tax liability or tax owed. A tax deduction only reduces total taxable income from which the taxes owed are calculated. The tax credit is taken at the time the Alabama income tax form is filed.
Contributions to schools have been tax deductible for many years. A tax deduction allows you to subtract the amount of a contribution from the amount of your taxable income. The Alabama Future Workforce Initiative (AFWI) (Career-Technical Dual Enrollment Tax Credit Program) allows for a tax credit, which is subtracted from the amount of state income taxes you owe.
Yes, provided that your institution of choice currently has or is in the process of expanding its dual enrollment program to include the designated career-technical program(s). You can designate up to 80 percent of the contribution to career-technical program(s). The designation must be made at the time of donation.
All Alabama public community and technical colleges, with the exception of Ingram State Technical College, Marion Military Institute and Alabama Technology Network, are eligible to participate and offer various career-technical programs of study.
All Alabama public high schools are eligible to participate, as well as those private high schools that meet or exceed the Alabama State Department of Education approved minimum high school standards. For eligibility questions pertaining to home-schooled students, contact the Dual Enrollment Coordinator.
Yes. Students who meet the eligibility requirements established by the State Board of Education may participate.
Once you have made your contribution, a receipt will be provided to you by the Alabama Department of Postsecondary Education for tax filing purposes. You may indicate on the donation form whether you prefer to have the receipt mailed to you or sent to you electronically. Notification of your contribution will be electronically submitted to the Alabama Department of Revenue by the Alabama Department of Postsecondary Education. At tax filing time, you should provide a copy of the receipt to your tax preparer and maintain a copy for your records.
Contributions that qualify for a tax credit under this program may be made for tax years beginning on Jan. 1, 2015, and thereafter. You can complete the attached form and submit your donation electronically or you can fill in the Tax Credit Donation Form and write a check made payable to: The Alabama Department of Postsecondary Education. If you choose to write a check, mail the form and your check to the address shown on the form. The donation must be postmarked no later than the last day of the tax year that applies to the donor to take advantage of the tax credit for that tax year.
You cannot claim a State of Alabama income tax deduction for the same donation used to calculate your Alabama tax credit. You should contact your tax advisor for more information regarding the eligibility of your donation for a federal income tax deduction.
Please contact the Dual Enrollment Coordinator at firstname.lastname@example.org, or call 334.293.4500 for more specific details or if you have questions.
Alabama Department of Postsecondary Education | P.O. Box 302130 | Montgomery, AL 36130-2130