Iowa - School Tuition Organization Tax Credit

school choice

Iowa – School Tuition Organization Tax Credit

Iowa – School Tuition Organization Tax Credit

The Iowa School Tuition Organization Tax Credit program, a tax-credit scholarship program, was enacted and launched in 2006. It helps Iowa students from low- and middle-income households to 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.

Program Fast Facts

  • 10,791 participating students (2018–19)

  • 59 percent of families with children income-eligible statewide

  • 12 scholarship organizations awarding scholarships (2019–20)

  • 144 participating schools (2018–19)

  • Average scholarship value: $1,614 (2018–19)

  • Value as a percentage of public school per-student spending: 15 percent

Program Details

Iowa’s School Tuition Organization Tax Credit Participation

Students Participating
School Year Ending

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

Iowa provides a credit on individual income taxes for donations to school tuition organizations (STOs), nonprofits that provide private school scholarships. The credit is worth 65 percent of the donation’s value, which also is limited by a statewide cap. A maximum of $12 million in tax credits is available. Each STO is able to grant tax credits to its donors up to its share of the statewide limit, with each STO’s share determined by the enrollment at the schools it serves. Corporate donations can constitute up to 25 percent of the $12 million cap.

Student Funding

STOs determine scholarship amounts. A total of $15 million in tax-credit funding for scholarships is available in 2020, which is an increase of $2 million from the previous year.

Student Eligibility

Children are eligible to receive scholarships if their family income does not exceed 400 percent of federal poverty guidelines ($103,000 for a family of four in 2019–20).

EdChoice Expert Feedback

The $15 million cap on funding for scholarships is too low to provide the necessary funding for all eligible families. The program, however, does have reasonable regulations on private schools that participate. A school must be accredited, but schools are able to choose independent accrediting agencies outside of the state department of education. Additionally, each STO is able to independently set its own scholarship-granting criteria, which allows it to set its own private mission and seek donors who align with that mission. Because the funding cap is too low, an automatic escalator for the tax credit cap, similar to Florida’s Tax Credit Scholarship Program, would allow the program to grow with the demand for scholarships. This will allow true educational freedom for all families who seek a different choice, not create an arbitrary cap that stops those who would wish to attend a different school.

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: 65 percent
  • Total Credit Cap: None
  • Budget Cap: $15 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

Governing Statutes

Iowa Stat. § 422.11S

Legal History

No legal challenges have been filed against the program.

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