How to Contribute to an STO
Here is a great giving opportunity to generate scholarship funds for qualifying Cedar Valley Christian School students — with a big tax savings for donors.
The School Tuition Organization (STO) allows for Iowa residents or corporations to make donations to the STO that qualify for a 65% tax credit with the State of Iowa plus you can also claim the remaining 35% as an itemized charitable donation on your federal income tax return. New legislation has changed this from 100% deductible to only the non-credit portion.
$10,000 Your contribution
( 6,500) Reduced state income taxes *
( 875) Reduced federal income taxes **
$ 2625 Your net cost
* A tax credit of 65% of income taxes already paid or owed
** Assuming 25% tax bracket
This is only an illustration. Please consult your tax advisor for specific information.
History and Purpose
The School Tuition Organization (STO) Tax Credit was enacted in 2006 in order to generate private contributions that could then be used by children in Iowa for scholarships to attend accredited, nonpublic schools in the state. Cedar Valley Christian School (CVCS) became accredited in 2014 and became eligible to be a part of a STO.
CVCS participates in the Heart of Iowa STO, which is a separate entity that is made up of CVCS and several other Christian Schools in Iowa. You may designate that you wish to have your contributions come to CVCS so you know where is it going. For more complete information on this program, visit the Iowa STO website at www.iowaace.org.
How to Contribute
To make STO contributions please fill out the STO Donation Form and send to
Heart of Iowa
13007 Douglas Parkway, Suite 100
Urbandale, Iowa 50323
Questions and Answers
Q: Is there a limit to how much CVCS can receive from this program?
A: Yes, the state has allocated up to $100,000 for CVCS for the 2015-16 school year.
Q: Is there a limit on how much a person/family can contribute?
A: Not really, however it would seem one wouldn’t want to contribute more than what their Iowa state income taxes would be for the year (e.g. if your state tax for the year is $6,500, you might not want to contribute more than $10,000). Any amount over and above your state tax liability would be carried forward to future tax years (but not lost).
Q: Which students qualify for potential scholarships from this money?
A: To qualify, a child’s family income must not exceed 4 times the federal poverty guideline for their family size (e.g. for a family of four in 2013-14, the poverty guideline was $23,550, so a four-person family would need income of less than $70,650 to qualify for assistance from this program).
Q: Who determines the amount of the individual scholarships?
A: Each STO will determine the scholarship amounts.
Q: If I want to contribute to the STO now, how do I do it?
A: Heart of Iowa does not have a web site so the direction we suggest if you want more info on Iowa STO programs, see the Iowa Ace website at www.iowaace.org
Q: Should I make my contribution to this program instead of our church?
A: Not necessarily. This is a great giving opportunity for additional dollars. Since the money raised by the STO must be used to provide student scholarships, other normal expenses such as teacher salaries, supplies, etc. must continue to be funded as they have in the past.
Q: When will I get my tax credit form?
A: Tax credit certificates are sent twice a year. For donations received before Oct. 1st, a certificate with a thank-you letter is sent out in October. For all other donations, the certificate will be mailed in January. The donors need to include their Social Security number, as the certificate cannot be issued without it.
Q: Can I donate stock to the STO?
A: The Heart of Iowa account is set up with Raymond James in Des Moines and the contact is Jim Miller, 515-221-2478. The donor’s financial rep can contact Jim directly and he will facilitate the transaction.
Q: How do I learn more about this and/or have my questions answered?
A: In addition, you can go to the Iowa STO website at www.iowaace.org, or ask Jeff Pospisil at Cedar Valley Christian School.