School Scholarship Tax Credit
Indiana's School Scholarship Tax Credit program allows individuals and corporations to claim a 50 percent tax credit for contributions to approved Scholarship Granting Organizations (SGOs), nonprofits that provide private school scholarships. There is no limit on the dollar amount of the tax credit that can be claimed, although the total amount of tax credits awarded statewide is limited to $7.5 million. The program was launched in 2010. Children are eligible to receive scholarships if their family income does not exceed 200 percent of the guidelines needed to qualify for the free and reduced-price lunch program ($88,246 for a family of four in 2014–15). Children must be between ages 5 and 22 to participate. Current private school students can qualify. Also, qualifying students must have been (1) enrolled in kindergarten, (2) a scholarship recipient in the previous school year from a nonprofit organization that qualifies for certification as an SGO, or (3) a scholarship recipient in the previous school year under this program.
Choice Scholarship Program
Indiana's Choice Scholarship Program allows students in low- and middle-income families to receive vouchers to attend private school. Students from families that qualified for the federal free and reduced-price lunch (FRL) program can receive a voucher worth up to 90 percent of the state per-student spending amount for the sending school district. Students from families earning 150 percent of that same threshold can receive a voucher worth up to 50 percent of the state funding allocation for the sending district. The maximum voucher size is $4,800 for students in grades K–8 and $4,500 for students in grades 9–12. Families can supplement vouchers with additional funds. Students eligible to receive special education funds are now eligible to use those funds for special education services at a voucher-accepting school. Children must be between ages 5 and 22 to participate. Eligible students include: (1) students who attended a public school (including a charter school) for the preceding two semesters and who are from families earning up to (but not exceeding) 150 percent of FRL ($66,184 for a family of four in 2014-15), (2) students with disabilities that have an Individualized Education Plan and who are from families earning up to (but not exceeding) 200 percent of FRL ($88,246 for a family of four in 2014-15), (3) students who attended or would attend a public school designated "F" and who are from families earning up to (but not exceeding) 150 percent of FRL, (4) students or siblings of students who received a minimum of a $500 tax-credit scholarship in the previous school year from a Scholarship Granting Organization, or (5) students who received a voucher in the previous school year under this program and are from families earning up to (but not exceeding) 200 percent of FRL. The program launched in 2011.
Private School/Homeschool Deduction
Indiana provides a tax deduction for individuals who make educational expenditures on behalf of their dependent children. Any taxpayer who has a child already enrolled in private school or who is homeschooled is eligible to claim up to a $1,000 tax deduction per child for approved educational expenses including private school tuition, textbooks, fees, software, tutoring, and supplies. The program launched in 2011.