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College Access Tax Credit

The Internal Revenue Service published proposed regulations on August 27, 2018, regarding “Contributions in Exchange for State or Local Tax Credits.” If adopted, these regulations may impact your charitable contribution deductions on your federal tax return. For more information about federal charitable contribution deductions, go to irs.gov and search for charitable contribution deductions.

The California College Access Tax Credit (CATC) is a credit available to individuals, business entities, and insurance company entities that contribute to the CATC Fund. The California Educational Facilities Authority (CEFA) administers the fund. The CATC is available for taxable years 2014 through 2016 for individuals and business entities. For taxable year 2017 through 2022, CATC is available for individuals, business entities, and insurance company entities. The credit is a percentage of the amount you contribute each taxable year:

  • 60 percent for 2014
  • 55 percent for 2015
  • 50 percent for 2016 through 2022

The credit can be used to offset California tax, and it can reduce the tax below tentative minimum tax.

You may also be able to claim a charitable deduction on your federal tax return. If you do this, you must add back the amount of the charitable deduction taken on your federal return as a state adjustment on your California tax return. You cannot claim a deduction and a credit for the same contribution on your California tax return.

You are eligible to claim the credit for the taxable year you submitted the applications if all of the following occur:

  • CEFA received a completed application by their deadline for that taxable year.
  • CEFA issued you a Notice of Allocation Reservation.
  • You provided CEFA a Contribution Submittal Form and contribution by the due date listed on the Notice of Allocation Reservation.
  • CEFA provided you with a signed College Access Tax Credit Certification.

You must receive a certificate from CEFA before you can claim the credit on your California income tax return.

You can get an application and more information about how to make a contribution on CEFA’s website.

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Last Updated: 09.14.2018

 

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