Pennsylvania’s Opportunity Scholarship Tax Credit Program, enacted and launched in 2012, offers corporations tax credits for their donations to Opportunity Scholarship Organizations (OSOs) that provide private school scholarships. Students who meet the zoning and income requirements can receive those tax-credit scholarships. Learn more about the program, including funding, eligibility and rules, on this page.
Pennsylvania offers tax credits for corporate contributions to Scholarship Organizations (SOs), nonprofits that provide private school scholarships.
Scholarship Organizations determine scholarship amounts, which are capped at the amount of a school’s tuition and fees or $8,500. Students attending “economically disadvantaged schools” – which are those enrolling 75 percent or more scholarship students – may receive scholarships worth up to $9,000. Students with special needs may receive up to $15,000, and special needs students attending economically disadvantages schools may receive up to $16,000. Public school boards may set up tuition grant programs that allow students to attend a public or private school. For private schools under such programs, the tuition grant is limited to the state’s per-pupil subsidy amount.
Students must live in a “low-achieving” school zone, with low-achieving defined as the state’s bottom 15 percent of public schools based on standardized test scores. Also, families are eligible only if their household incomes are less than $90,000 plus $15,905 for each child in the family in 2019–20, adjusted annually for inflation. Students with special needs are eligible for scholarships if they come from families who earn 150 percent of the baseline income level (for example, a family with one child may earn up to $158,858 in 2019–20) or less, and those with the most severe special needs are eligible if they come from families who earn 299 percent of the baseline income level ($316,656 for a one-child family in 2019–20) or less.
The newer of Pennsylvania’s two tax-credit scholarship programs has a relatively high cap on scholarship values and generally avoids unnecessary regulations on private schools. However, because of the myriad requirements needed to qualify for a scholarship—coupled with the overall funding cap—the chief weakness of Pennsylvania’s newer tax-credit scholarship program is its student eligibility. Although the program deserves credit for having significantly higher income thresholds for students with special needs based on their particular types of special needs, limiting eligibility to students who are assigned to “low-performing” schools excludes a large number of students whose assigned schools are not the right fit. For this program to grow successfully, Pennsylvania should consider cutting some of the complexity and red tape placed on student eligibility.
72 P.S. §§ 8701-G.1 through 8712-G.1
No legal challenges have been filed against the program.
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