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New Montana tax credits for private-school scholarships hit $1M cap; Missoula among top recipients

For the 2022 tax year, a newly enlarged state income-tax credit for gifts to private-school scholarships has reached its $1 million threshold — less than three weeks after the start of the fiscal year.

According to state tax authorities, a total of 60 individual gifts and nine company donations took advantage of the credit, who informed MTN News the cumulative $1 million thresholds for the recognition were met on January 199.

 

The gifts were made to seven non-profit student-scholarship groups in Montana that assist students who attend private K-12 schools, many of which are linked with religious organizations.

 

The two most generous donors are ACE Scholarships of Montana, which received $486,000 in contributions, and Missoula Catholic Schools, which received $352,000.

 

Those who make the contributions may get a state income-tax credit of up to $200,000 for their contributions this year. The total amount of all qualified tax credits for student-scholarship organizations is limited to $1 million during the current fiscal year. The limit will be increased to $2 million starting next year.

 

Last year, the Republican-controlled Montana Legislature boosted the maximum per-person tax credit from $150 to $200,000, a $200,000 increase over the previous year. No Democratic members of Congress voted in favor of the bill, claiming that the considerably increased credit would divert public funds away from public schools and towards private schools instead.

 

On the other hand, the legislation provided a tax credit of up to $1 million for gifts to public schools to be used to fund “new educational projects” – and the ceiling for 2022 was achieved on the first working day of the year, in less than six minutes, thanks to the generosity of donors.

 

Twenty-three individuals contributed money to ten public schools in nine Montana villages and towns, bringing the total to the required amount before January 33.

 

The following are the names and amounts of the other private-school scholarship groups that received gifts that qualified for the tax credit:

 

In Kalispell, Montana, St. Matthew’s Catholic School was purchased for $69,000.

The Holy Spirit Catholic School in Great Falls received a $61,000 donation.

$12,500 was donated to St. Mary’s Catholic School in Livingston.

Helena-based Intermountain Children’s Services will receive a check for $12,000.

The Way Christian School in Livingston received a $7,500 donation.

As soon as student-scholarship groups receive contributions, they must apply to the state Revenue Department for “pre-approval” to be considered eligible for the tax credit.

 

According to state revenue authorities, the $1 million thresholds were achieved at 6:20 p.m. on January 199, which stated 69 gifts had been pre-approved.

 

Following a key 2020 Supreme Court ruling, which supported the use of the tax credit to aid religiously connected institutions, the maximum amount of the credit was increased from $150 to $200,000, resulting in an increase in the total amount of the credit from $150 to $200,000. According to the court’s ruling, because it was an illegal use of state money to benefit religious groups, the Montana Supreme Court had knocked down the whole tax credit program. However, in a 5-4 ruling, the United States Supreme Court overturned the lower court’s conclusion.