PreK tax credit
Consider this as you prepare to pay your state taxes — you can invest in Grenada School District’s Pre-K Learning Blocks program and get reimbursed in full by the state with a tax credit.
In essence, you’re paying your taxes directly to the school. It requires a couple of extra steps, but the payoff is greatly increased. It’s nothing short of an investment in the future of our community.
Our Early Learning Collaborative receives half of its operating budget from the state of Mississippi. The other half comes from local funding, tuition, and contributions. This valuable tax credit was put in place in 2013 as a way to encourage businesses and individuals to support the pre-K initiative in Mississippi.
Under this tax legislation, any resident who makes a contribution to our Learning Blocks program — let’s say $5,000 — is eligible for a full tax credit. That’s a credit, not a deduction, which would only reduce your taxable income by $5,000. A credit pays you back in full.
The National Institute for Early Education Research (NIEER) ranks Mississippi's Early Learning Collaborative system among the best public pre-kindergarten programs in the nation. However, the state ranks much lower when it comes to funding these programs (42nd in the nation), which is why it’s so important for the school to partner with tax payers. This is money that you or your business will be paying anyway, so why not take a few extra steps and make it work right here at home?
Research has shown that children who receive high quality early childhood experiences are less likely to become teen parents, more likely to be employed, less likely to use public assistance programs, and more likely to attend and complete college. This greatly improves the odds of these kids succeeding, which in turn strengthens our entire community.
Here’s what to do in four easy steps:
- Call or email the school district’s business manager, Rodney Murphy (662-226-1606), to see if the collaborative has reached its cap. All 18 of the state’s collaboratives are eligible to receive a combined total of $7.79 million in one year, a sum which has yet to be reached since the law has been in effect.
- Write your check to Grenada School District, earmarked for Learning Blocks.
- The district will notify the Mississippi Department of Education of your contribution, and they’ll send you a certificate that proves you have contributed to Grenada’s state-approved collaborative. This certificate is used for tax filing.
- When filing your state income tax return, have your accountant indicate your contribution using form 80-401. If you prepare your own taxes, download the form on the MS Department of Revenue’s website.
The credit will be taken off your tax liability before your monthly withholdings, so you’ll still qualify for a refund if you’ve overpaid. Contributions are eligible for a credit up to $1 million per taxpayer. Any unused reimbursement can be carried forward three years of tax credits.
Remember, contributions must be made during the calendar year for which a tax return is filed, so plan to invest in Grenada’s pre-K program this year to apply your credit when filing your 2022 taxes.
By adapting your tax-paying strategy to help our Pre-K program, you’ll get the chance to see your investment at work in the community and take comfort in knowing you’ve increased the chances of success for our youngest citizens.