Enacted 2011 • Launched 2011 • Individual Tax Credit
North Carolina allows parents of children with special needs to claim a tax credit for
educational expenses, including private school tuition, therapy, and tutoring. Savings from the
program are placed in a fund for public schools’ special needs programs. Unused tax credits
can be carried forward for up to three years.
Latest Stats (2011)
- Taxpayers participating: 694
- Average tax credit value: $2,400
Program Details
Average credit value as a percentage of North
Carolina’s total per-student spending ($8,225)
Tax Credit Value
Parents can receive up to $6,000 in tax credits per child. There is no statewide cap on the
amount of credits available. The credit is equal to the amount paid for tuition and special
education services, and is available for special education expenses incurred by homeschoolers.
Student Eligibility
Students are eligible for the tax credit if they (1) are disabled, (2) already have an Individualized
Education Program, (3) receive special education or related services on a daily basis, and (4)
are a child for whom the taxpayer can receive a personal exemption. For initial eligibility,
the student must have been enrolled for at least the previous semester at a public school, or
received special education services through the public school as a preschool child. Continuing
eligibility requires a new evaluation every three years by the school district to ensure the child
is still disabled. Students are no longer eligible for the tax credit if they (1) were placed in a
private school at public expense, (2) were enrolled in college, (3) were 22 years or older during
the entire semester, or (4) graduated from high school before the end of the semester.
Legal Developments
On July 1, 2011, North Carolina House Bill 344 became law without the governor’s signature. No legal challenges have been filed against the program.
Rules & Regulations
- Who Qualifies?: Private / Home School
- Income Limit: None
- Jurisdiction Limit: Statewide
- Enrollment Cap: None
- Personal Credit/Deduction Cap: C=$6,000
Governing Statutes
North Carolina General Statutes § 105-151.33 was added by North Carolina House Bill 344 (Senate Law 2011-395).
Friedman Contact
Robbie Rhinesmith | robbie@edchoice.org
Additional Links
The full text of the bill is available here: http://www.ncga.state.nc.us/gascripts/billlookup/billlookup.pl?Session=2011&BillID=H344.
