The bill would create federal tax credits for individuals and corporations that donate cash or marketable securities to qualifying scholarship organizations. The organizations would provide scholarships for eligible students whose household income is no more than 300% of the area median income. Scholarships could pay for approved school costs, including tuition, books, tutoring, testing, dual enrollment, and certain therapies. Eligible costs could be for public, private, religious, or home-school education. Scholarship payments for approved costs would not count as the recipient’s gross income.
The individual credit would be limited by a taxpayer-specific allocation and a limit based on adjusted gross income or $5,000, whichever is greater. The corporate credit would be limited to 5% of taxable income. The bill sets a $10 billion annual limit on allocated contributions, with 10% divided evenly among the states. It also sets rules for scholarship organizations, including income checks, independent audits, and limits on how scholarship funds may be used. The bill was introduced and referred to the Senate Finance Committee.
A taxpayer could claim a credit for a qualifying donation if an allocation is available. A student may qualify for a scholarship if the student is eligible to enroll in public elementary or secondary school and meets the household income limit. The bill does not guarantee that a student would receive a scholarship.
The bill describes tax credits for qualifying donations; it does not state a total federal cost. It bars taxpayers from also claiming a charitable deduction for a donation that receives the individual credit. Corporations could not deduct expenses for which they claim the corporate credit.
No publicly available information.
No publicly available information.