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South Carolina – Educational Credit for Exceptional Needs Children

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South Carolina – Educational Credit for Exceptional Needs Children

The South Carolina Educational Credit for Exceptional Needs Children is a tax-credit scholarship program enacted in 2013 and launched in 2014. The program provides tax credits of up to 100 percent of donations made to Scholarship Funding Organizations (SFOs). SFOs give private school scholarships to students with special needs. Learn more about this program, including funding, eligibility, and regulations, on this page.

Program Fast Facts

  • One of 15 private school choice programs exclusively for students with special needs nationwide

  • 2,011 students participating (2015–16)

  • 13 percent of students eligible statewide

  • 4 scholarship organizations (2015–16)

  • 105 schools participating (2015–16)

  • Average scholarship value: $4,078 (2015–16)

  • Value as a percentage of public school per-student spending: 43 percent

Program Details

South Carolina’s Educational Credit for Exceptional Needs Children Program Participation

Students Participating
School Year Ending

Click the + symbols to learn more about this program’s details.

South Carolina offers tax credits to donors supporting Scholarship Funding Organizations (SFOs), nonprofits that provide private school scholarships to students with special needs.

Student Funding

The maximum scholarship amount an SFO may award is $10,000. Scholarships may be used for tuition, transportation, textbook expenses, or any combination of these at qualifying private schools.

Individuals, partnerships, corporations, and similar entities can claim tax credits worth 100 percent of their donations, which cannot exceed 60 percent of their tax liability; however, married couples filing separate returns may claim only half of the tax credit allowed had they filed jointly. The total amount of tax credits awarded statewide is limited to $8 million.

Student Eligibility

Students are eligible to receive scholarships if they have been designated by the South Carolina Department of Education as meeting the federal definition of a “child with a disability” (34 CFR 300.8). Additionally, a student’s parents must believe the assigned public school district does not sufficiently meet the student’s needs. Students who have been diagnosed within the last three years by a licensed speech-language pathologist, psychiatrist, or medical, mental health, psycho-educational, or other comparable licensed healthcare provider as having a neurodevelopmental disorder; a substantial sensory or physical impairment (such as deaf, blind, or orthopedic disability); or some other disability or acute or chronic condition that significantly impedes the student’s ability to learn and succeed in school without specialized instructional and associated supports and services tailored to the child’s unique needs are eligible.

Friedman Feedback

South Carolina’s first school choice program could be improved upon in a few key areas. For example, the program’s scholarship funding fails to take into account the actual cost of serving a particular student’s exceptional educational needs. Additionally, the $8 million cap on credits will likely limit the number of scholarships SFOs are able to award, although there may be some flexibility based on participation in the new refundable tax credit program. The total cumulative cap for both programs is $12 million. To improve upon this new opportunity, South Carolina needs to increase eligibility beyond students with exceptionalities and raise the limit on tax credits available to donors, similar to what its neighbor to the west, Georgia, has done with its tax-credit scholarship program.

Rules and Regulations

  • Income Limit: None
  • Prior Year Public School Requirement: None
  • Geographic Limit: Statewide
  • Enrollment Cap: None
  • Scholarship Cap: $10,000
  • Testing Mandates: State or National
  • Credit Value: 100 percent
  • Total Credit Cap: Yes
  • Budget Cap: $8 million
  • *Limited to students with special needs

 

SFO Requirements:

  • Use at least 95 percent of contributions for scholarships
  • Allocate all scholarships to exceptional needs students
  • Serve more than one school
  • Conduct financial audit performed by a certified public accountant

Governing Statutes

Legal History

No legal challenges have been filed against the program.

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