School choice tax credits take effect, but no rules yet for Oklahoma

A law offering tax breaks for private school and homeschool families is now in effect, but details for the program’s rollout are still in the works.

House Bill 1934, known as the Oklahoma Parental Choice Tax Credit Act, offers refundable tax credits to offset the cost of private school tuition and related fees, including the price of textbooks, technology, activities and uniforms. The law took effect in late August.

Tax credits for private school costs range from $5,000 to $7,500 per child and are based on household income. There is no maximum income limit to qualify, but lower-earning households receive a larger credit.

Homeschool families qualify for $1,000 per child for educational expenses.

Private school families can start applying Dec. 8 before the program begins in the 2024 tax year, according to the Oklahoma Tax Commission website.

But that information is subject to change, an author of HB 1934 cautioned.

Sen. Julie Daniels, R-Bartlesville, said efforts are underway to ensure the program is established in “as user friendly a manner as possible.”

Daniels said Senate President Pro Tem Greg Treat, R-Oklahoma City, is working closely with school choice advocates. 

“The tax credit needs to be done on a school year calendar, not a tax year calendar,” Daniels said. “Parents need to know that their kids can be enrolled by the school year, not semester by semester.” 

Alex Gerszewski, a Treat spokesperson, said the latest guidelines from the Tax Commission are not set in stone. The agency is still developing rules that will govern the program and could begin accepting public comment on proposed regulations in the next 15 to 30 days, he said.

The Tax Commission did not return a request for comment by deadline.

The agency will accept applications for tax credits on a first-come-first-served basis, according to its website.

Families earning $150,000 or less currently have until Jan. 22 to apply for a private school tax credit, according to the latest information from the agency. Higher-earning households would have until Dec. 31.

Qualifying students must attend a private school that’s accredited by either the Oklahoma State Board of Education or the Oklahoma Private School Accrediting Commission.

State lawmakers set aside $150 million for the tax credits in the 2024 tax year. The total allocation will increase to $200 million in 2025 and $250 million in 2026.

Funding for homeschool tax credits will remain at $5 million.

Daniels said lawmakers could someday raise the cap on both programs.

“We need to be prepared as a Legislature to address the growth of the program over time, but right now let’s get the rules in place that make it easy to use for parents who want this opportunity for their children,” she said.