Vote Smart's Synopsis:

Vote to pass a bill that authorizes parents or legal guardians to claim tax deductions for the costs of home school or independent school expenditures.

Highlights:

• Authorizes a parent or guardian who teaches at home 1 or more students otherwise eligible to enroll in public schools to claim a deduction against his or her taxable income of up to $2,000 per child, beginning with the 2012-2013 school year (Sec. 1). 

• Authorizes a parent or guardian of a child or children who attend an “independent school” to claim a deduction against taxable income of up to $4,000 per child, beginning with the 2012-2013 school year (Sec. 1). 

• Defines an “independent school” as a non-public school that meets compulsory attendance requirements and does not discriminate based on race, color, or national origin (Sec.1).

• Authorizes a parent or guardian of a child or children who attend school in a district that is not the child's district of residence to claim a deduction against his or her taxable income of up to $1,000 per child, beginning with the 2012-2013 school year (Sec. 1). 

• Specifies that a person is entitled to a tax credit of the amount of the contribution to a “nonprofit scholarship funding organization,” provided the tax credit does not offset more than 60 percent of the taxpayer's liability, and if (Sec. 2):
•  The contribution is used to provide grants for tuition, transportation, or textbook expenses to students; and
•  The person does not designate a specific child or school as the beneficiary of the contribution.

• Defines “nonprofit scholarship funding organization” as a charitable organization that adheres to the following (Sec. 2):
• Is listed as an exempt organization under section 501(c)(3) of the Internal Revenue Code;
• Allocates all of its funds to grants for children who are one of the following:
•     “Exceptional needs” students;
•     Who are eligible for the federal free or reduced lunch program; or
•     Whose families qualify for federal Medicaid benefits; and
• Does not provide grants solely for the benefit of 1 school.

• Defines “exceptional needs” students as children with significant cognitive, mental, physical, or emotional disabilities and whose parents or legal guardian believe that the services provided by the school district of legal residence do not sufficiently meet the needs of his or her child (Sec. 2).

• Limits grants awarded by nonprofit scholarship funding organizations to an amount not exceeding $5,000 per year or 75 percent of the cost of tuition, whichever is less, for students who qualify for the federal free or reduced lunch program, or whose families qualify for federal Medicaid benefits (Sec. 2).

• Limits grants awarded by nonprofit scholarship funding organizations to an amount not exceeding $10,000 per year or 75 percent of the cost of tuition, whichever is less, for students with “exceptional needs” (Sec. 2). 

• Specifies that the tax credits authorized in this act may not exceed a cumulative total of $15 million annually for contributions made for students who are eligible for the federal free or reduced lunch program (Sec. 2).

• Specifies that the tax credits authorized in this act may not exceed a cumulative total of $10 million annually for contributions made for “exceptional needs” students (Sec. 2).

Full Bill Text