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Just the FAQs – Tuition Tax Credits and Tax Deductions

As of 2015, 16 states have enacted education tax credit scholarship programs, with half of these states enacting their programs in just the past three years. Tax credit scholarships programs are helping approximately 200,000 students enroll in the private school of their choice. The 16 states that currently have tax credit funded scholarship programs are: AL, AZ, FL, GA, IA, IN, KS, LA, MT, NH, NV, OK, PA, RI, SC, VA.  The School Choice Today: Education Tax Credit Laws Across the States Ranking and Scorecard 2015 provides analysis and state-by-state comparisons of the 16 tax credit programs currently in existence in order to serve as a roadmap for lawmakers, parents, and advocates looking to bring about substantive and lasting change and foster a marketplace where parents have the power to make choices among excellent options.

The following are answers to frequently asked questions (FAQs) regarding tuition tax credit and tax deduction programs. The answers to these FAQs are intended to provide only an introductory overview of key issues.

What Are Tuition Tax Credits and Tax Deductions?

School tax credits refund expenses made toward education up to a fixed figure, while tax deductions minimize the expense of education by making them itemized deductions. The qualifying criteria cover educational expenses such as tutoring, texts, and computers; in the states that have them so far, they also cover private school tuition. State legislation determines the amount of credit and what can be included in the deductions. It also states whether private school tuition qualifies.

Education tax programs fall into one of two categories. The first is a personal use credit, which allows individual families to reduce their tax liability. The second category is a donation tax credit, which allows individuals and businesses to reduce their tax liability by contributing to organizations that disperse funds to

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