Philanthropic Investment in Arkansas Kids Scholarship Program

  • Tax-Credit Scholarship
  • Enacted 2021
  • Launched 2022

Arkansas offers tax credits to individuals and businesses that support scholarship-granting organizations (SGOs), nonprofits that provide private school scholarships to students from families earning up to 200 percent of the federal poverty level. 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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  • 2nd

    Arkansas’s Second School Choice Program

  • 48%

    of Families Income Eligible Statewide

  • 24%

    Maximum Value as a Percentage of Public School Per-student Spending

Percentage of students eligible for the Philanthropic Investment in Arkansas Kids Scholarship Program

Student Funding

Average scholarship amounts per scholarship-granting organization (SGO) cannot exceed 80 percent of Arkansas’s foundation funding amount (about $5,614 in 2020–21) for students in grades K–8, and 90 percent of this amount (about $6,316 in 2020–21) for high school students.     

 Scholarships fund tuition and fees at participating private schools. Tax credits for scholarships are limited to $6 million per year.  

(Last updated December 18, 2023)  

Student Eligibility

Students may be eligible if they are from families with household incomes less than 200 percent of the federal poverty level ($60,000 for a family of four in 2023–24). They also must have been enrolled in an Arkansas public school the previous school year, enrolling in an Arkansas school for the first time, or is a previous scholarship recipient.  

If a student was previously enrolled in another state and was enrolled in an Arkansas private school for less than half the academic year for which their family is applying for a scholarship, they may also be eligible.  

(Last updated December 18, 2023) 

EdChoice Expert Feedback

Arkansas’s tax-credit scholarship program has the potential to help hundreds of students access schools that are the right fit for them, but policymakers could do much more to expand educational opportunity. 

Eligibility for the scholarships is limited to public school students from families earning up to 200 percent of the federal poverty line, making it one of the more restrictive means-tested educational choice programs in the nation. About half of Arkansas students are eligible for a scholarship.  

Average scholarship amounts are relatively high, funded at 80 and 90 percent, respectively, of Arkansas’s base student funding depending on grade level. Tax credits are worth 100 percent of the value of the contributions to scholarship organizations, which should help promote donations. Policymakers took a positive step by expanding the budget cap as part of 2023 Learns Act, however, only $6 million in tax credits are available annually, which is less than 0.01 percent of Arkansas’s total K–12 revenue. The tax credit cap automatically increases by 5 percent each year if at least 90 percent of the cap was reached in the previous year. 

To expand access to educational choice, Arkansas policymakers should dramatically increase the available tax credits 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. 

Arkansas’s tax-credit scholarship program generally avoids unnecessary and counterproductive regulations. 

(Last updated December 18, 2023) 

Rules and Regulations

  • Income Limit: 200 percent x Poverty 
  • Prior Year Public School Requirement: Yes, with exceptions 
  • Geographic Limit: Statewide  
  • Enrollment Cap: None 
  • Scholarship Cap: $5,614 (K–8) / $6,316 (9–12)  
  • Testing Mandates:  Nationally norm-referenced tests 
  • Credit Value: 100 percent 
  • Per Donor Credit Cap: none 
  • Total Tax Credit Cap: $6 million (escalator) 

SGO Requirements 

  • Provide credit donation receipts to donors as well as the Arkansas Department of Finance upon request 
  • Ensure first-time recipients of scholarships were not continuously enrolled in an Arkansas private school the previous school year  
  • Conduct background checks for all employees  
  • Distribute eligible contributions within three years of receipt  
  • Post a surety bond or otherwise demonstrate fiscal solvency if receive more than $50,000 in donations in a given year  
  • Report to the state data on scholarship distributions and students’ school districts of residence  
  • Ensure that participating private schools: 
    • Comply with all state health and safety regulations  
    • Comply with municipal building occupancy rules  
    • Administer a nationally norm-referenced test for scholarship students in grades 3–10 and report student results to parents as well as state researchers  

(Last updated December 18, 2023) 

Governing Statutes

Ark. Code Ann. §§ 6-18-2301 through 2308

(Last updated December 18, 2023)