Virginia Earned Tax Credits

Save Money While Supporting our Cadet Scholarship Program

Many excellent cadet candidates are in need of some extra financial support to attend Fishburne.

A new Education Improvement Scholarships Tax Credits program increases private school access for Virginia’s children in need. It offers a 65 percent state tax credit on top of current state and federal tax deductions for monetary and marketable securities donations to nonprofits that, in turn, provide private school scholarships.

Fishburne Military School, through the Fishburne-Hudgins Educational Foundation, has partnered with Fuqua School via The Rural Education Foundation to provide scholarships to students meeting the prescribed criteria as defined by the Virginia Department of Education for the Education Improvement Scholarship Tax Credits.

Saving Money While Serving Children

In providing scholarships to children in need, individuals and businesses can achieve tax savings in several ways.

For the year of the donation, you may take a deduction against net income as a charitable donation on both federal and state income taxes.

  • The tax reduction equals the contribution amount times the tax rate of the applicable tax (federal or state).
  • Subject to rules governing deductibility of charitable contributions

For the year of the donation, you may also take a credit against Virginia taxes.

  • Tax reduction equals 65 percent of the amount of the donation
  • Credit is non-transferable
  • Credit may not exceed the tax liability but may be carried over for five succeeding years.

Businesses can claim the credit against

  • Corporate Income Taxes
  • Virginia Bank Franchise Tax
  • Virginia Insurance Premiums License Tax
  • Virginia Public Service Corporations Tax
  • Personal Income Taxes via pass-through from S-Corporations

Individuals can claim the credit against

  • Personal Income Taxes

Highlights of the Education Improvement Scholarship Tax Credits

  • Minimum Donation is $500 per year; maximum donation is $125,000 per year for an individual. There is no limit for businesses.
  • Scholarship foundations may not limit scholarships to students of one school. Scholarship Foundations are held to stringent reporting requirements on financial administration and academic achievement.
  • A donor is not permitted to designate a specific student to be the recipient of a scholarship.
  • Requirements for eligibility can be found on the Virginia Department of Education website at: https://law.lis.virginia.gov/vacode/58.1-439.25/

Demonstration of Savings for Corporations

Effects of Scholarship Tax Credit (based on tax laws as of 2012)

Corporations No Contribution Contribution
Income before contribution $1,000,000 $1,000,000
Contribution $0 $10,000
Taxable Income $1,000,000 $990,000
Virginia Taxes No Contribution Contribution
VA Corporate Tax Rate (6%) $60,000 $59,400
VA Corporate Tax Savings $0 $600
VA Scholarship Tax Credit $0 $6,500
Total VA Tax Savings $0 $7,100
Federal Taxes No Contribution Contribution
Federal Taxable Income Before State Deduction $1,000,000 $990,000
State Tax Deduction $60,000 $52,900
Federal Taxable Income $940,000 $937,100
Federal Taxes (34% marginal) $319,600 $318,614
Federal Tax Savings $0 $986
Total Tax Savings $8,086

Demonstration of Savings for Married Filing Jointly

Effects of Scholarship Tax Credit (based on tax laws as of 2012)

Married Filing Jointly No Contribution Contribution
Income before contribution $100,000 $100,000
Contribution $0 $10,000
Taxable Income $100,000 $99,000
Virginia Taxes No Contribution Contribution
VA Personal Tax Rate (5.75%) $5,750 $5,692
VVA Personal Tax Savings $0 $58
VA Scholarship Tax Credit $0 $650
Total VA Tax Savings $0 $708
Federal Taxes No Contribution Contribution
Federal Taxable Income Before State Deduction $100,000 $99,000
State Tax Deduction $5,750 $5,042
Federal Taxable Income $94,250 $93,958
Federal Taxes (25% marginal) $23,562 $23,489
Federal Tax Savings $0 $73
Total Tax Savings $781

How to Participate

  • Complete Parts I, II, and III of this Preauthorization Form. Return the completed form to Fishburne and we will submit on your behalf.
  • You will receive a Preauthorization Notice from the Virginia Department of Education, along with the Preauthorization Form you completed with Part IV having been completed by VDOE. Please be sure to save this.
  • Sign your Preauthorization Notice and send it along with your donation to Fishburne-Hudgins Educational Foundation Scholarship, 225 S Wayne Ave, Waynesboro, VA 22980. Donations must be submitted within 180 days after receipt of Notice.
  • Fishburne Military School will mail you a receipt for your charitable donation and the Virginia Department of Education will issue you a Tax Credit Certificate.
  • Use your charitable donation receipt and tax credit certificate when you file your taxes to reduce your tax liability.