child learning tax credit pennsylvania

Child Learning Investment Tax Credit

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  • Last year, lawmakers approved the Child and Dependent Care Enhancement Tax Credit and a $66.7 million increase for child-care subsidies. Pennsylvania lawmakers are looking for ways to lower costs for families.
  • The Child Learning Investment Tax Credit, as proposed in Senate Bill (SB) 1280, creates a $8,000 per child refundable tax credit to offset education expenses if parents choose a non-public school.
  • The $8,000 tax credit is less than half of the $22,000 public schools receive per student.

Why Do We Need This?

  • Families shouldn’t have to choose between paying their mortgage and having quality education options for their children or working two jobs just to pay for the school their child needs.
  • Fifty-one percent of Pennsylvanian families report they would prefer a private school or homeschooling for their child, yet only 15 percent attend a private school. The Child Learning Investment Tax Credit Program would empower families to choose the education option they prefer.
  • The 63,000 scholarship application waiting list for current choice programs indicates parents want more choices.
  • In Philadelphia alone, 19,863 students are on the charter school waiting list.
  • The Child Learning Investment Tax Credit would enable families to choose a school without delay.

How Does It Work?

  • Child Learning Investment Tax Credits would be easy for families to use and simple for the Pennsylvania Department of Revenue to administer. After enrolling in a nonpublic school, a parent or guardian would claim the tax credit on their annual tax return. The parent would then receive the credit.
    • The bill contains a provision that would give low-income families the option to receive relief up front, ensuring those who can’t foot the bill for educational costs can also benefit.
  • Tax credit programs are subject to standard audits. This ensures tax-credit dollars directly benefit children without creating an additional bureaucratic or monitoring system.
  • The $8,000 is enough to aid families. The average tuition among all private schools in Pennsylvania is $12,170. However, Simple Tuition Solutions (STS) reports that the median tuition rate across 53 counties in Pennsylvania is $5,598 annually.

What Expenses Would Qualify for the Tax Credit?

  • The Child Learning Investment Tax Credit Program would provide tax credits and/or refunds for any parent up to $8,000 per child for the following expenses.
    • Tuition and fees at a nonpublic school;
    • Textbooks or curriculum materials;
    • Fees for after-school or summer education programs provided by a nonpublic school;
    • Tutoring;
    • Educational software and applications;
    • Fees for standardized and nationally recognized tests, including college admissions tests, advanced placement examinations, and related preparatory courses;
    • Education services for students with disabilities from a licensed or accredited practitioner or education service provider; and
    • Contracted services provided by a public school district, including specific classroom instruction.

What Would It Cost?

  • SB 1280, as written, would be the first universal refundable education tax credit in the nation.
  • If capped at $500 million, the Child Learning Investment Tax Credit Program would provide a long-term fiscal savings of $969,393,080 for taxpayers.
    • This range represents between a $190 cost and a $5,918 benefit per student, given the significantly lower cost of the tax credit compared to the $22,000 spent per student in public schools.
  • Because 55.5 percent of school district revenue flows from local sources, school districts would retain funding for students participating in the Child Learning Investment Tax Credit Program.
  • Oklahoma enacted the first universal education tax credit program in 2023. For 2024, the cap on tax credit funds for private schools is $150 million and, by 2026, will increase to $250 million. The legislation includes a separate $5 million cap for homeschooled students. The value of the credit for private schools is based on total adjusted gross income with credits totaling $5,000 to $7,500 per student.