Virginia – Education Improvement Scholarships Tax Credits Program
Virginia enacted the Education Improvement Scholarships Tax Credits Program in 2012 and launched the program in 2013. This program offers a 65 percent tax credit to individuals and businesses that donate to qualified Scholarship Foundations (SFs). The SFs then provide private school scholarships to students whose families meet the income requirements. This page offers more information about the tax-credit scholarship program’s funding, eligibility, regulations and more.
Program Fast Facts
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4,435 students participating (2017–18)
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39 percent of families with children income-eligible statewide
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36 scholarship organizations awarding scholarships (2017–18)
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175 participating schools (2017–18)
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Average scholarship value: $3,134 (2016–17)
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Value as a percentage of public school per-student spending: 28 percent
Program Details
Virginia’s Education Improvement Scholarships Tax Credits Program Participation
Click the + symbols to learn more about this program’s details.
Individual and business taxpayers in Virginia can receive tax credits worth 65 percent of their donations to scholarship foundations, nonprofits that provide private school scholarships. An individual must donate at least $500 and may not donate more than $125,000 per year. There is no limit on the size of business donations. The number of available tax credits is capped at $25 million a year. Donors can take the credit against the same year’s tax obligation.
Student Funding
The total scholarship for any student cannot exceed the actual education expenses of the student or 100 percent of the per-pupil amount distributed to the local public school by the state, whichever is less.
Student Eligibility
Students must come from households where family income is less than 300 percent of the federal poverty line ($75,300 for a family of four in 2018–19). Students with special needs also are eligible and have a higher income limitation (400 percent of the federal poverty line or $100,400 for a family of four in 2018–19). Students must either be enrollees in grades K–1, a public school student the previous school year, a previous scholarship recipient or a new resident of Virginia.
EdChoice Expert Feedback
Both the restrictive eligibility requirements and the low overall funding cap of $25 million limit the ability of Virginia’s tax-credit scholarships to serve students. Moreover, the credit value is only 65 percent of the contribution amount, which makes it difficult to attract sufficient donations. The program is limited further by its per-pupil funding, which is only 28 percent of state per-student spending on public school students. On a positive note, the program requires participating students to take a nationally norm-referenced test chosen by the school, rather than the standardized test mandated by the state. Virginia should consider increasing the funding and credit caps for this program, expand student eligibility and increase the scholarship size.
Rules and Regulations
- Income Limit: 300 percent x Poverty (400 percent for students with special needs)
- Prior Year Public School Requirement: 100 percent of state funding
- Geographic Limit: Statewide
- Enrollment Cap: None
- Scholarship Cap: 100 percent of state funding
- Testing Mandates: National
- Credit Value: 65 percent
- Total Credit Cap: Yes (individual) / None (business)
- Budget Cap: $25 million
Scholarship Foundation Requirements:
- Be approved by the state
- Use at least 90 percent of contributions for scholarships
- Make scholarships available for more than one school
- Comply with Title VI of the Civil Rights Act of 1964
- Conduct an annual audit, review or compilation on tax credit-derived funds
- Submit to the state:
- Total number and dollar amount of contributions received
- Dates when such contributions were received
- Total number and dollar amount of scholarships awarded
Governing Statutes
Legal History
No legal challenges have been filed against the program.