School Tuition Organization Tax Credit

  • Tax-Credit Scholarship
  • Enacted 2006
  • Launched 2006

Iowa offers tax credits to donors supporting school tuition organizations (STOs), nonprofits that provide private school scholarships to students in need. The program helps Iowa students from low- and middle-income households afford the schooling options that best fit their needs. Learn more about the program’s details on this page, including eligibility, funding, regulations and more.

We do not administer this program.

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  • 12,673

    Participating Students (2021—22)

  • 55%

    of Families with Children Income-eligible Statewide

  • 12

    Scholarship Organizations (2021—22)

  • 143

    Participating Schools (2021—22)

  • $1,465

    Average Scholarship Value (2021—22)

  • 13%

    Value as a Percentage of Public School Per-student Spending

Iowa’s School Tuition Organization Tax Credit Participation

Students Participating
School Year Ending

Student Funding

STOs determine scholarship amounts, which are capped at a participating student’s tuition figure. A maximum of $20 million in tax-credit funding for scholarships are available as of 2022.

(Last updated January 11, 2023)

Student Eligibility

Children are eligible to receive scholarships if their family income does not exceed 400 percent of federal poverty guidelines ($120,000 for a family of four in 2023—24).

(Last updated June 28, 2023)

EdChoice Expert Feedback

Iowa’s tax-credit scholarship program helps more than twelve thousand 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 400 percent of the federal poverty line ($120,000 for a family of four in 2023–24). About seven out of ten Iowa students are eligible for a scholarship though less than 10 percent of students statewide actually use a scholarship. (Additionally, Iowa families are eligible for a very modest tax credit for tuition and textbooks.)

The average scholarship size is only about $1,500, which is roughly 13 percent of the average expenditure per student at Iowa’s district schools. Tax credits are worth 75 percent of the value of the contributions to scholarship organizations. Only $20 million in tax credits are available annually, which is equivalent to just 0.6 percent of Iowa’s total K–12 revenue.

In order to expand access to educational choice, Iowa policymakers should dramatically increase the available tax credits, increase the credit value to 100 percent, and expand eligibility to all students (prioritizing scholarships based on need). The program could also be converted into an education savings account to ensure that all students have access to the education that’s the right fit for them, whether private school or a customized course of education.

Iowa’s scholarship program avoids unnecessary and counterproductive regulations.

(Last updated June 28, 2023)

Rules and Regulations

Rules and Regulations 

  • Income Limit: 400 percent x Poverty 
  • Prior Year Public School Requirement: None 
  • Geographic Limit: Statewide 
  • Enrollment Cap: None 
  • Scholarship Cap: Full Tuition 
  • Testing Mandates: None 
  • Credit Value: 75 percent 
  • Per Donor Credit Cap: None 
  • Total Tax Credit Cap: $20 million 

STO Requirements: 

  • Use at least 90 percent of contributions for scholarships  
  • Make scholarships available for more than one school  
  • Annual review of financial statements by a public accounting firm  
  • Submit data to the state on accepted contributions, grants awarded and participating schools 

(Last updated January 11, 2023)

Governing Statutes

Iowa Stat. §422.11S

(Last updated January 11, 2023)