Tax-Credit Scholarships

Tax-credit scholarships allow taxpayers to receive full or partial tax credits when they donate to nonprofits that provide private school scholarships. Eligible taxpayers can include both individuals and businesses. In some states, scholarship-giving nonprofits also provide innovation grants to public schools and/or transportation assistance to students choosing alternative public schools.

How Tax-Credit Scholarships Work

Tax-Credit Scholarship Programs

Fast Facts

Do you know how many kids across the country are using tax-credit scholarship programs? Which state has the biggest tax-credit scholarship program?

Number of Tax-Credit Scholarships Awarded

217,194

States With Tax-Credit Scholarships

There are 22 tax-credit scholarship programs in 18 states—Alabama, Arizona (4), Arkansas, Georgia, Indiana, Iowa, Kansas, Louisiana, Montana, Nevada, New Hampshire, Ohio, Oklahoma, Pennsylvania (2), Rhode Island, South Carolina, South Dakota, and Virginia.

Fast Facts
  1. Tax-credit scholarships gained national prominence in 1997, when Arizona created the nation’s first such program (after its voucher program was declared unconstitutional).
  2. Pennsylvania has the largest tax-credit scholarship program in terms of participation: 54,241 enrollees.
  3. Arizona, Montana and Ohio have the most expansive tax-credit scholarship programs in terms of statewide eligibility: 100 percent of students.
  4. Tax-credit scholarships—specifically Arizona’s Corporate Tax Credits for School Tuition Organizations—were essentially declared constitutional by the U.S. Supreme Court in 2011 (Arizona Christian School Tuition Organization v. Winn). The Supreme Court dismissed the case, ruling the plaintiffs did not have standing to challenge the program.