Beginning January 1, 2027, any taxpayer may donate up to $1,700 (or $3,400 for a married couple) to a scholarship granting organization and earn a nonrefundable federal tax credit for that same amount.
While we are still waiting to see whether the State of Michigan will opt into the program, the Diocese of Lansing has already formed the Diocese of Lansing Scholarship Granting Organization (DOL SGO) so that we will be ready should Michigan opt in. Families attending our Catholic schools can then apply for a scholarship.
How it works:
- A donor gives to the DOL SGO and may designate that the donation go to a particular Catholic school in the diocese. Donations could be given monthly (about $140 per month) or any time during the tax year.
- The donor receives a dollar-for-dollar federal tax credit, up to $1,700 per taxpayer each year ($3,400 for a married couple). For anyone who owes that much in federal tax, the gift costs nothing, because it reduces the federal tax owed when the donor files.
- Families at DOL Catholic schools apply to the DOL SGO for financial aid using a similar process to the existing one.
- The SGO awards scholarships to Michigan students whose household income is no more than 300 percent of area median income, which includes most families in our diocese. Nationwide, about 95 percent of children live in households that meet this limit.
- The school is paid directly for tuition and fees.
Gifts cannot be directed to a particular student.
What is possible:
2025 DSA: 15,050 donors, $6.11M pledged.
These are estimates. Donors who owe less than $1,700 in federal income tax receive a smaller credit, though unused credit carries forward five years.
Why it matters for St. Thomas parish and school:
The credit redirects federal tax, so it does not compete with our offertory or other parish giving. Therefore, donating to the DOL SGO and designating that the donation go to St. Thomas Catholic School is a wonderful opportunity to benefit our school and its students without redirecting funding from our parish.
Where things stand:
Scholarships can go to Michigan students only if the state opts in by January 1, 2027. As of October 13, Governor Whitmer was still reviewing the Treasury regulations issued October 1; 31 states have opted in. The DOL SGO has been incorporated and has applied for tax-exempt status, so it will be ready when Michigan participates.