Enacted 2012 • Launches 2013 • Tax-Credit Scholarship
Individual and business taxpayers in Virginia can receive tax credits worth 65 percent of
their donations to scholarship granting organizations, nonprofits that provide private school
scholarships. The number of available tax credits for individual and business donations is
capped at $25 million a year.
- Students participating: n/a
- Schools participating: n/a
- Scholarship organizations: n/a
- Average scholarship value: n/a
Maximum scholarship value as a percentage of
Virginia’s total per-student spending ($10,594)
The total scholarship for any student cannot exceed the actual education expenses of the
student or 100 percent of the per-pupil amount distributed to the local public school by the
state, whichever is less.
Students must come from households in which their family income is less than 300 percent
of the federal poverty guidelines ($69,150 for a family of four in 2013); students with special
needs also are eligible to participate. Students must either be enrollees in grades K-1, a public
school student the previous school year, a previous scholarship recipient, or a new resident of
No legal challenges have been filed against the program.
Rules & Regulations
The minimum donation by a taxpayer is $500, but the tax credit is limited to $50,000 per individual or married couple in a given year. The $50,000 limitation does not apply to corporations.
Scholarship foundations must be approved by the state department of education, and must disburse at least 90 percent of donations as scholarships (failure to meet this threshold for any year will disqualify the foundation from future donations). Foundations must provide annual information to the department of education about donations and disbursements. Foundations cannot limit scholarships to students at any particular school, and must comply with federal antidiscrimination laws. Foundations are also responsible for ensuring that schools are in compliance with state and local health and safety regulations, that they comply with federal antidiscrimination laws, and that they are either officially accredited or administer a nationally norm-referenced test every year.
Schools must provide parents with their students’ national testing results every year, and must supply all test scores to the department along with information on grade, gender, family income level, number of years of scholarship participation, and race. The department will publish aggregate testing information by the third year of testing. Eligible schools must give graduation rate information to the Superintendent of Public Instruction.
Virginia Code, new article 13.3 in Chapter 3 of Title 58.1.
Stephanie Linn | email@example.com
Virginia House Bill 321/Senate Bill 131 (2012), which created the tax-credit scholarship, is available here: http://leg1.state.va.us/cgi-bin/legp504.exe?121+sum+HB321.