Innovative Educational Program Credit


The Innovative Educational Program Tax Credit is available to taxpayers who donate to Montana public school districts (PSD) for the purpose of providing supplemental funding to the school districts for innovative educational programs (IEP).

Eligibility

Individual and business taxpayers who donate directly to PSD can claim the Innovative Educational Program Tax Credit. A list of PSDs can be found on the Education Donations Portal at EducationDonations.mt.gov.

The department must preapprove the tax credit before a taxpayer may claim it. To gain preapproval, the PSD must report the taxpayer's donation on the Education Donation Portal to reserve the taxpayer's tax credit. If there is enough remaining tax credits and the donor has not made a donation of more than $200,000 for purposes of the tax credit, the credit will be preapproved. The PSD will provide the taxpayer with a tax credit receipt that includes the approved amount of the tax credit and a confirmation number. Taxpayers must include the tax credit receipt and confirmation number to claim the tax credit on their return.

Benefit

The credit is equal to the amount of the donation, up to $200,000.

Credits are available on a first-come, first-served basis until the total credits claimed reaches the threshold for the year.

In 2023, the aggregate amount of the available credit increased to $2,000,000. In 2024, it will increase to $5,000,000. In 2025 and beyond, if 80% of the previous year's credits are claimed, the aggregate amount will increase by 20%. If it is not met, the aggregate amount remains the same as the previous year. The credit's aggregate threshold is tracked on the Education Donation Portal homepage.

Carryover

The credit is nonrefundable but may be carried forward for up to three years.

Forms

Learn more about the IEP Tax Credit in the Tax Credits for Qualified Education Contributions Guide.

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