Sec. 2. Tax credit for contributions to eligible charter school organizations
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Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 25E the following new section: In the case of an individual who is a citizen or resident of the United States (as defined in section 7701(a)(9)), there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 75 percent of the amount of qualified contributions made by the taxpayer during the taxable year. The credit allowed under subsection
(a)in any taxable year shall not exceed an amount equal to the greater of— 10 percent of the adjusted gross income of the taxpayer for the taxable year, or $5,000. For purposes of this section— The term charter school has the meaning given such term in section 4310 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7221i ). The term eligible charter school organization means an entity which— is described in section 501(c)(3) and exempt from tax under section 501(a) and is not a private foundation, is a charter management organization (as defined in section 4310 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7221i )), or a charter school, that— has received a grant for the replication or expansion of high-quality charter schools under section 4305(b) of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7221d(b) ), or manages or operates a charter school that has been supported under such a grant, or has been selected by a State for eligibility under this section based on a determination by the State that the entity is in the highest 10 percent of charter management organizations (as so defined) or charter schools, as the case may be, for student performance in the State, separate from any other funds or contributions received by the entity, maintains and accounts for any contributions made by any person for the purpose of the creation or expansion of charter schools operated or managed by such entity, obtains from an independent certified public accountant annual financial and compliance audits, and certifies to the Secretary (at such time, and in such form and manner, as the Secretary may prescribe) that the audit described in clause
(iv)has been completed. For purposes of subparagraph (A), the term independent certified public accountant means, with respect to an organization, a certified public accountant who is not a person described in section 465(b)(3)(A) with respect to such organization or any employee of such organization. The term qualified contribution means a charitable contribution (as defined by section 170(c)) to an eligible charter school organization in the form of cash or marketable securities for the purpose of the creation or expansion of charter schools managed or operated by such organization. Any qualified contribution for which a credit is allowed under this section shall not be taken into account as a charitable contribution for purposes of section 170. If the credit allowable under subsection
(a)for any taxable year exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section, section 23, and section 25D), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection
(a)for such taxable year. No credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose. For purposes of the preceding sentence, credits shall be treated as used on a first-in first-out basis. Subject to paragraph (2), a qualified contribution shall not be taken into account under this section if such contribution would result in the aggregate amount of credits claimed under this section exceeding the volume cap established under section 4 of the High-Quality Charter Schools Act . For purposes of the allocation made to a State pursuant to subparagraph
(A)of section 4(a)(1) of the High-Quality Charter Schools Act , if a qualified contribution made by an individual residing in such State would result in the aggregate amount of credits claimed under this section by individuals residing in such State exceeding the allocation made to such State pursuant to such subparagraph, such contribution shall only be taken into account under this section if such contribution does not result in the aggregate amount of credits claimed by individuals pursuant to subparagraph
(B)of such section exceeding the amount made available pursuant to such subparagraph. . The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25E the following new item: Sec. 25F. Contributions to eligible charter school organizations. .
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Sec. 2
Tax credit for contributions to eligible charter school organizations
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