Enacted 2009 • Launched 2009–10
First adopted in 2009, the Indiana School Scholarship Tax Credit Program allows individuals and corporations to claim a 50 percent tax credit for contributions to approved scholarship granting organizations that distribute private school scholarships to children from families who earn up to 200 percent of the federal free and reduced-price lunch program guidelines. The program serves kindergarten through 12th grade. The state provides a tax credit against state tax liability equal to 50 percent of a contribution to Scholarship Granting Organizations (SGOs) for school scholarships granted to low-income students. The tax credit is extended to both individuals and corporations. 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 $5 million.
In 2011, Indiana passed an expansion to the state’s tax-credit scholarship program raising the cap on the total amount of tax credits available from $2.5 million to $5 million. Additionally, changes to the program clarify how SGOs operate by allowing them to serve two or more private schools.
Latest Stats (2010)
- Students Participating: 978
- Active Scholarship Granting Organizations: 5
- Average Scholarship Value: $754
Program Details
Program Type
Tax-Credit Scholarship
Scholarship/Voucher Value
Each SGO determines the amount of the scholarships it distributes.
Participation
In 2010–11, 978 students were awarded scholarships from five tuition organizations. The average scholarship value was $754. The total donor tax credits claimed was $1,119,150, and the average donor claimed a credit of $7,312.
Student Eligibility
Eligibility is limited to students who have legal settlement in Indiana; are between five and 22 years of age; have been or are currently enrolled in a participating school; live in a household with an annual income of no more than 200 percent of the amount required to qualify for the federal free or reduced-price lunch program; and either (1) were enrolled in a public school in the previous year, (2) are enrolled in kindergarten, (3) received a scholarship in the previous school year from a nonprofit organization that qualifies for certification as an SGO, or (4) received a scholarship in the previous school year under this program.
Legal Developments
No legal challenges have been filed against this program.
Rules & Regulations
- Income Limit: 200% x FRL
- Geographic Limit: Statewide
- Enrollment Cap: None
- Scholarship Cap: Full Tuition
- Testing Mandates: Yes-National
- Credit Value: 50%
- Credit Cap: None
- Program Cap: $5 million
Governing Statutes
IC 6-3.1-30.5
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