Relating to the strong families credit against certain taxes for entities that contribute to certain organizations.

Contracts

Standard donation letters are insufficient. You must draft a Designated Contribution Agreement that:

• 1. Explicitly labels funds as a "Designated Contribution" under Texas Tax Code § 171.801(2).
• 2. Mandates the recipient organization provide a Certificate of Contribution within a specific window (e.g., 10 days).
• 3. Includes an Indemnity/Clawback Clause: If the recipient fails to report the contribution to the Comptroller within 30 days—or loses their eligibility status—triggering a denial of your tax credit, the donation must be refunded.

Hiring/Training

• Tax & Finance Teams: Must coordinate to ensure the donation is made and the electronic application for the credit is filed simultaneously. This cannot be handled by a standard Accounts Payable workflow.
• Vendor Verification: Procurement must verify the recipient is on the OneStar Foundation’s certified list *before* cutting the check.

Reporting & Record-Keeping

• Certificate of Contribution: You must obtain this specific form from the non-profit. It must contain your FEIN and the exact contribution amount.
• Electronic Application: You must file for the credit with the Comptroller. Retain the digital receipt showing the exact timestamp of submission to prove your place in the first-come, first-served queue.
• Carryforward Tracking: If the credit exceeds your liability, track the carryforward for the statutory limit of five consecutive reports.

Fees & Costs

• No Direct Filing Fee: There is no fee to apply for the credit.
• Risk Cost: The primary cost is the financial risk of making a donation and failing to secure the credit due to the cap being reached.