A Tax Credit Scholarship allows donors to fund educational scholarships through approved organizations. In return, they get state tax credits. This approach supports school choice without direct government funding.
As of 2024, 12 states have enacted universal or near-universal Education Savings Account (ESA) programs, with Arizona's program alone serving over 75,000 students — making state-funded homeschooling more accessible than ever (EdChoice, 2024). According to the National Center for Education Statistics (NCES), approximately 3.3 million students were homeschooled in the United States as of 2023, representing roughly 6% of the school-age population.
What is a tax credit scholarship?
Tax credit scholarships are a way to fund education through a partnership between the public and private sectors. Donors, like individuals or businesses, give money to approved Scholarship Granting Organizations (SGOs). They get back dollar-for-dollar state tax credits. The SGOs then hand out these funds as scholarships to eligible families. This method is appealing to states that are cautious about using government money for private education but still want to increase school choice.
States with tax credit scholarship programs
Right now, 18 states have 22 tax credit scholarship programs. These states include:
- Alabama
- Arizona (4 programs)
- Arkansas
- Georgia
- Indiana
- Iowa
- Kansas
- Louisiana
- Montana
- Nevada
- New Hampshire
- Ohio
- Oklahoma
- Pennsylvania (2 programs)
- Rhode Island
- South Carolina
- South Dakota
- Virginia
Pennsylvania has the largest program with over 54,000 students enrolled. Arizona started this model back in 1997 and now offers almost universal eligibility. Each state has different rules for things like income limits and scholarship amounts.
Homeschool eligibility
Most tax credit scholarships focus on private school tuition, but some do include homeschool expenses. For example:
- Oklahoma offers up to $1,000 per homeschooled student for tutoring, textbooks, and testing.
- Alabama gives up to $2,000 per child (with a $4,000 family cap).
- Florida’s Personalized Education Plan covers materials and testing fees for homeschoolers.
- New Hampshire and Louisiana also offer some benefits for home educators.
Make sure to check your state’s specific program, as rules can change.
The bottom line
Tax credit scholarships are a growing way to support school choice without direct government funding. For homeschoolers, the benefits can vary. Some states include homeschool costs, while many do not. A new federal tax credit scholarship starting in 2027 could change things, depending on state rules. If you live in a state with a program, check to see if your homeschool expenses qualify. If not, education savings accounts (ESAs) or tax deductions might be better for your family.
