What is a School Tuition Organization? It is a charitable organization that receives voluntary cash contributions from Iowa taxpayers and then allocates those funds in the form of tuition assistance to eligible families who attend accredited nonpublic schools represented by the School Tuition Organization.
What type of taxpayers can contribute to a School Tuition Organization? Individuals, S-corporations, C-corporations, limited liability corporations, partnerships, estates and trusts.
Does this program interface with the existing tuition tax credit offered to taxpayers in Iowa? No. The tuition tax credit program is completely separate from the donations to a School Tuition Organization. The tuition tax credit program provides a tax credit to parents/guardians for the first 25% of tuition and textbooks paid by the parents to an accredited school up to a maximum credit of $250 per child in grades K-12.
How much of my donation will be given to eligible families? The law requires that at least ninety percent of all donations be distributed as grants to qualifying families within twelve months of receipt of the gift. The School Tuition Organization may use up to ten percent of the proceeds for out of pocket expenses such as printing costs, mailing fees, and administration of the program realized while overseeing the program.
What is the total dollar amount of tax credits that can be issued statewide by all of the approved School Tuition Organizations? Statewide, tax credits equaling $12 million each year can be issued.
What are the other School Tuition Organizations in Iowa? There are 11 organizations in Iowa who offer these same tax credits. The contact information is available here.
Students in Service at Dowling Catholic High School, West Des Moines
What is the name of the School Tuition Organization for the Diocese of Des Moines? The name of the School Tuition Organization serving all of the schools of the Des Moines Diocese is the Catholic Tuition Organization or CTO. The CTO serves 16 schools with approximately 6000 students in grades kindergarten through twelfth grade.
What is the total dollar amount of tax credits that can be issued by the Catholic Tuition Organization? Based upon the total number of students enrolled in member schools statewide, the CTO has been authorized by the Iowa Department of Revenue to issue up to $2,037,056 in tax credits, equaling $3,133,912 in donations in 2017.
How is CTO incorporated? This CTO is incorporated under the laws of the state of Iowa and is exempt from federal and state income taxes under section 501(c)3 of the Internal Revenue Service code. Our affiliation with the Diocese of Des Moines, through the US Conference of Catholic Bishops, provides the initial non-profit status for the CTO.
How much is the tax credit? The Iowa tax credit is equal to 65% of the donation. The contribution is also eligible for a federal tax deduction when the donor itemizes on their federal return. Please consult your tax advisor for your specific tax implications.
How much of the contribution is used for tuition assistance and how much is used for operations of the CTO? At least ninety percent of the money donated must go awarded to eligible families within the calendar year. Historically, CTO has awarded 93% of all revenue in tuition assistance.
Who may contribute to the CTO? Individual tax payers, C Corporations, S-corp, LLC, Partnerships, Estates and Trusts can contribute to the CTO and are then eligible for the tax credit.
What types of gifts are accepted by CTO? In addition to check or credit card, the CTO also accepts gifts. of securities, grain and required minimum distributions from retirement accounts. Please contact CTO for transfer instructions. Instructions are available on the CONTRIBUTE tab.
How will donors know that the money will be used for its intended purpose of tuition assistance to eligible families? An annual audit of the donations received and awards granted is conducted following the close of the fiscal year on June 30 by certified public accountants.
Will there be an annual report to donors? Yes. An annual report is published each fall listing the awards to families by school as well as an alphabetical listing of donors who wish to be identified.
May gifts to the Catholic Tuition Organization be restricted to an individual Diocesan School? No. Awards are based on the need of qualified families and not on the amount of contributions designated to a specific school. It is the commitment of the board of directors that every qualified families who needs tuition assistance will receive tuition assistance.
Are contributions put into an endowment? No. Unlike an endowment fund, donations by law cannot be held to support future needs. Therefore, the CTO must raise funds annually and present scholarships annually to support the ongoing needs of the eligible families.
May gifts to the Catholic Tuition Organization be restricted to an individual student? No.
Is there a limit on the size of individual gifts accepted by the “Catholic Tuition Organization?” No. There are no limits for contributions to the CTO except up to the amount of tax credits available each year.
What is the annual fundraising goal? The amount of tax credits vary each year and is based on the pro-rated percentage of certified enrollment in our schools compared to the certified enrollment in the other school tuition organizations in Iowa. The goal for 2017 is $ 3,224,494.
Student at St. Albert, Council Bluffs
What are the steps for families who wish to apply for tuition assistance through this program? Families complete either an on-line (preferable) or paper application. Applications are accepted beginning February 1st. Tax returns are required for a complete application.
What is FAIR? FAIR is a company hired by CTO to review all applicant information, analyze their financial need and recommend an award amount based on criteria established by the CTO Board of Directors. FAIR provides an impartial evaluation of all applications and is not swayed by personal relationships with the applicants or their schools.
Is my information kept confidential? All information is kept confidential.
How is my application approved? A report will be generated by FAIR and is sent to the CTO Board of Directors, who will recommend the level of tuition assistance to be awarded to eligible families based upon the total funds available from the CTO.
When are families notified if they will receive tuition assistance? The schools will notify the family of the tuition assistance award. Applications received by first Friday in April will be notified before the end of the school year. Applications received by July 31st will be notified prior to the start of school.
Who can help me complete my application? Schools will assist families in the completion of the financial aid applications.
In addition to income level and number of dependents, will other factors be considered to determine the level of assistance to be awarded? The amount of tuition assistance awarded to individual families will take into consideration such factors as; income level and number of dependents, as well as, tuition level of the school, family circumstances, cost of living for the area, and the ability to meet all local admissions requirements. It will not take into consideration factors such as retirement funds, mortgage levels, or consumer debt.
Who is eligible to apply to a parochial school in the Diocese of Des Moines? All families are eligible to apply. Awards are granted to only those families who reside in Iowa, whose adjusted total income falls below the guidelines. Only children in K-12 grades are eligible. All other families who do not qualify for this program but feel they need additional assistance will need to contact their local school.
2018-2019 Income Guidelines
* Family size includes parent(s)/guardian(s) plus total number of dependents claimed on 2016 tax return.
** Families are eligible for CTO assistance if their total income is at or below the above listed income level. (Line 22 of federal income tax form)
*** For each additional dependent add $12,960.
Do tuition grants received by a family through this program impact local tuition assistance gifts to that same family? The CTO will issue awards to families based upon that families’ identified need. Any additional assistance presented to that family would be a local decision.
Is there an appeal process if the total level of tuition assistance is perceived to be insufficient? No. There will be no additional funds available for a broad-based CTO appeal process. Local schools may develop local protocols, funded locally, to support an appeal process.
What if a student who has received assistance, withdraws before the end of the school year? The amount of the assistance will be pro-rated based upon the number of days the student attends the school.
What if a student transfers to another Catholic school participating in the CTO? The assistance will continue at the new school.
When can I apply for next school year? Applications can be submitted online at www.fairapp.com beginning February 1st. Printed applications are available at all of our schools in January of each year.
What are the deadlines for the application process? The spring deadline is the first Friday in April with some dollars reserved for a second application deadline of July 31st. This second application deadline is for families who may have moved into the school district during the summer, are transferring from a public school or missed the first application deadline.