Scholarship amounts are determined by 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 there is no means testing 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.

Arizona’s switcher tax-credit scholarship program, in conjunction with its original individual tax-credit scholarship program, is one of the most universal programs in the nation. It does not restrict eligibility based on arbitrary family income levels. However, the program does require that an eligible student 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. The program excels by not restricting the amount a scholarship can be worth. Another plus of Arizona’s switcher program is the lack of red tape placed on participating schools, which must comply with the state’s private school regulations, including health, safety and nondiscrimination requirements. Where the program could improve is increasing the amount that individual and joint taxpayers can claim as a credit. This improvement would allow for more donations to STOs, which would in turn allow those STOs to increase the number of scholarships and amount of each scholarship awarded.

• 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
• Total Credit Cap: Yes
• Budget Cap: None

STO Requirements:

• 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, dollar amount of scholarships granted to students who qualify for the free or reduced-price lunch program, dollar amount of scholarships granted to those students whose household income falls between 185 percent and 342 percent of the federal poverty level ($45,510 and $84,132, respectively, for a family of four in 2017–18), amount of money being held for identified student scholarships in future years, 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

Ariz. Rev. Stat. § 43-1089.03

No legal challenges have been filed against the program.