Virginia - Education Improvement Scholarships Tax Credits Program

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Virginia – Education Improvement Scholarships Tax Credits Program

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 to donate to qualified scholarship foundations. The foundations 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

  • 4,505 students participating (2018–19)

  • 39 percent of families with children income-eligible statewide

  • 36 scholarship organizations awarding scholarships (2018–19)

  • 174 participating schools (2018–19)

  • Average scholarship value: $3,168 (2018–19)

  • Value as a percentage of public school per-student spending: 27 percent

Program Details

Virginia’s Education Improvement Scholarships Tax Credits Program Participation

Students Participating
School Year Ending

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

Virginia offers tax credits to donors supporting scholarship foundations, nonprofits that provide private school scholarships to low-income students.

Student Funding

The total scholarship funding for students without special needs 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. Students may receive more than one scholarship from scholarship foundations. Students with special needs may be funded with scholarships worth up to 300 percent of the commonwealth’s per-pupil amount if they attend schools specifically for students with special needs.

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 do not have an income limitation. Students must either A) be enrollees in kindergarten or first grade, or B) be a public school student the previous school year, a previous scholarship recipient or a new resident of Virginia. Prekindergartners are also eligible if they are deemed an at-risk 4-year-old unable to obtain public early childhood services and meet the income requirements.

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 26 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

Va Code. §§ 58.1-439.25-28

Legal History

No legal challenges have been filed against the program.

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