“Switcher” Individual Income Tax Credit Scholarship Program
- Tax-Credit Scholarship
- Enacted 2012
- Launched 2012
Arizona offers tax credits to individuals supporting school tuition organizations (STOs), nonprofits that provide private school scholarships to students in need. In tax year 2020, individual taxpayers that contributed to STOs under this switcher may claim a dollar-for-dollar credit of up to $590, and married couples filing jointly may claim up to $1,179. However, taxpayers must first donate the maximum credit amount for the Original Individual Income Tax Credit ($593 individual, $1,186 joint in tax year 2020) before they may claim the switcher credit. Learn more about how the program works on this page, including eligibility, funding, regulations and more.
We do not administer this program.
Scholarships Awarded (2018-19)
of Students Eligible Statewide
Scholarship Organizations Awarding Scholarships (2018-19)
Participating Schools (2018-19)
Average Scholarship Value (2018-19)
Value as a Percentage of Public School Per-student Spending
Arizona’s “Switcher” Individual Income Tax Credit Scholarship Participation
STOs determine scholarship amounts. These amounts may vary depending on the STO to which a student applies for a scholarship. Students may receive more than one scholarship from STOs.
Students must be in grades K–12 and have previously attended a public school for at least a full semester or 90 days or be a preschool enrollee identified by the school district as having a disability under the Individuals with Disabilities Education Act or Section 504 of the Rehabilitation Act. Additionally, students who are in kindergarten, children of active military members stationed in Arizona and previous recipients of a Low-Income Corporate Income Tax Credit Scholarship or “Switcher” Individual Income Tax Credit Scholarship who have remained in private school are eligible. Although students are not means-tested for eligibility, STOs must consider financial need when awarding scholarships and cannot make decisions based solely on donor recommendations. Individual taxpayers may not make STO contributions earmarked for their own dependents, nor may donors make agreements among one another to “trade” donations for their respective dependents.
EdChoice Expert Feedback
Arizona’s individual-donor tax-credit scholarship program for “switchers” helps tens of thousands of students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity.
Eligibility for the scholarships is limited to students who have switched out of a public school or who are entering kindergarten (or preschool for students with special needs). About 93 percent of Arizona students are eligible to receive a scholarship via this program, and all students are eligible to receive a scholarship via the individual-donor scholarship program. Statewide, 6.7 percent of students participate in one of Arizona’s private educational choice options (including the universal-eligibility Original Individual-Donor Tax-Credit Scholarship Program, the Low-Income Corporate-Donor Tax-Credit Scholarship Program, Lexie’s Law for Disabled and Displaced Students Tax-Credit Scholarship Program, and the Empowerment Scholarship Account Program). This is the highest EdChoice share in the nation.
The average scholarship size is only about $1,400, which is only about 14 percent of the average expenditure per student at Arizona’s district schools, but there is no cap on scholarship values and scholarships can be combined. Students with special needs, students in foster care, and students from low-income families can also receive scholarships via the other tax-credit scholarship programs, in addition to the original scholarship program that is available to all students. Tax credits are worth 100 percent of the value of the contributions to scholarship organizations, but donors can only claim up to $590 in tax credits annually (or up to $1,179 for married couples filing jointly) after first donating the maximum credit amount for the Original Individual Income Tax Credit ($593 individual, $1,186 joint in tax year 2020.
In order to expand access to educational choice, Arizona policymakers should increase the amount of tax credits that individual donors can receive.
Arizona’s scholarship program generally avoids unnecessary and counterproductive regulations.
Rules and Regulations
- Income Limit: None
- Prior Year Public School Requirement: Yes
- Geographic Limit: Statewide
- Enrollment Cap: None
- Scholarship Cap: None
- Testing Mandates: None
- Credit Value: 100 percent
- Per Donor Credit Cap: $590 (individual) / $1,179 (married)
- Budget Cap: None
- Use at least 90 percent of contributions for scholarships
- Make scholarships available for more than one school
- May allow donors to recommend student beneficiaries but shall not award, designate or reserve scholarships solely on the basis of donor recommendations
- Cannot exchange recommendations of student beneficiaries with other donors
- Report annually to the state:
- data on accepted contributions, grants awarded, the dollar amount of scholarships granted to students who qualify for the free or reduced-price lunch program, the dollar amount of scholarships granted to those students whose household income falls between 185 percent and 342 percent of the federal poverty level ($48,470 and $89,604, respectively, for a family of four in 2020–21)
- the amount of money being held for identified student scholarships in future years and a list of participating schools with the number and dollar amount of scholarship awards received
- the salary of the STO’s top three officials for the fiscal year and proof of independent review of financial statements by a certified public accountant
No legal challenges have been filed against the program.
“Switcher” Individual Income Tax Credit Scholarship Program State Groups
That Support School Choice
Love Your School is a great resource for Arizona families looking for the best schooling options for their children. They also share the latest happenings in AZ education, families’ personal stories and more.
Empowered Arizona Families exists to give a public voice to families that utilize the Empowerment Scholarship Account program in Arizona. This organization is operated by ESA families, for ESA families.
Arizona’s Association of School Tuition Organizations (ASTOA) is the only membership organization that works solely on behalf of and provides a unified voice for Arizona’s school tuition organizations (STOs).
The Arizona Department of Revenue has approved this list of school tuition organizations to receive donations through the state’s tax-credit scholarship programs. These organizations provide private school scholarships to eligible students.