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South Carolina – Refundable Educational Credit for Exceptional Needs Children

South Carolina – Refundable Educational Credit for Exceptional Needs Children

The South Carolina Refundable Educational Credit for Exceptional Needs Children is a refundable tax credit program passed and launched in 2015. Different from traditional tax credit programs, refundable tax credits have greater utility for parents of more modest incomes. Learn more about the program, including eligibility, funding, regulations, legal history and more.

Program Fast Facts

  • South Carolina’s second private school choice program

  • Nation’s second refundable tax credit for educational expenses

  • 13 percent of students eligible statewide

  • Maximum tax credit/rebate: $10,000 per student

Program Details

Percent of South Carolina K–12 students whose parents/guardians are eligible for the Refundable Educational Credit for Exceptional Needs Children

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

South Carolina provides a refundable tax credit to parents or guardians of students with special needs.

Student Funding

Parents or guardians receive a tax credit worth the lesser of (1) $10,000 per student or (2) their children’s actual cost of attending school. However, if the student receives a tax-credit scholarship from an approved Scholarship Funding Organization, then the credit claimed may only equal the difference of $10,000 or the cost of tuition, whichever is lower, and the amount of the tax-credit scholarship. The total cap on the program is $2 million (although there may be some flexibility based on participation in the Educational Credit for Exceptional Needs Children program; total cumulative cap for both programs is $12 million).

If the state taxes owed by the parents are less than the total credit allowed, they may receive a refund equal to the balance of the unused credit

Student Eligibility

Parents are eligible to if their child has been designated by the South Carolina Department of Education as meeting the federal definition of a “child with a disability” (34 CFR 300.8). Additionally, a student’s parents must believe the assigned public school district does not sufficiently meet the student’s needs. Students who have been diagnosed within the last three years by a licensed speech-language pathologist, psychiatrist or medical, mental health, psycho-educational or other comparable licensed healthcare provider as having a neurodevelopmental disorder; a substantial sensory or physical impairment (such as deaf, blind or orthopedic disability); or some other disability or acute or chronic condition that significantly impedes the student’s ability to learn and succeed in school without specialized instructional and associated supports and services tailored to the child’s unique needs are also eligible. Students must attend an eligible independent school.

EdChoice Expert Feedback

This refundable tax credit directly empowers parents to choose an appropriate education for their child, knowing in advance how much money the state will reimburse them for their approved educational expenditures. This type of program is relatively easy for parents to navigate and understand. Two areas of improvement are suggested: 1) to pass enabling language, if necessary, for lending institutions to offer tax refund anticipation loans so that parents who do not have positive cash flow to pay tuition up front may nonetheless access funds to participate in this program and 2) to expand this refundable tax credit so that every child in the state may benefit.

Rules and Regulations

  • Income Limit: None
  • Prior Year Public School Requirement: None
  • Geographic Limit: Statewide
  • Enrollment Cap: None
  • Individual Credit / Rebate Cap: $10,000 per student
  • Testing Mandates: State or National
  • Budget Cap: $2 million
  • *Limited to students with special needs

 

Parent Requirements:

  • Parents must provide certification that the student has exceptional needs, certification that student was enrolled in an eligible school and proof of the cost of attendance at the eligible school

Governing Statutes

Legal History

No legal challenges have been filed against the program.

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