Refundable Tax Credits

Refundable tax credits allow parents to receive state income tax relief for approved educational expenses, which can include private school tuition, books, supplies, computers, tutors and transportation. What makes the credit “refundable” is if the credit exceeds the tax imposed by the government, the excess amount is refunded to the taxpayer (the parents)—similar to the Child Tax Credit or Earned Income Tax Credit. In other words, if the cost of tuition or other allowable educational expenses exceeds what the parent owes the state in taxes, the parent can still receive up to the maximum allowable credit to offset those expenses.