If a taxpayer contributes more than the amount eligible for the federal tax credit, only the portion up to the allowable credit limit will qualify for the dollar-for-dollar federal tax credit.
The federal tax credit directly reduces the taxpayer’s federal tax liability. Any contribution above the credit limit does not receive the credit but may be treated as a standard charitable contribution, which could reduce adjusted gross income under normal IRS charitable deduction rules.
Well Planned Education will provide appropriate documentation to support tax reporting. Taxpayers should consult their tax advisor to understand how this applies to their individual circumstances.
