HARRISBURG\u2013 U.S. Treasury announced specifics on the Federal Scholarship Tax Credit, the first nationwide school choice credit program.<\/p>\n
\u201c[It\u2019s] the ability to take your federal tax dollars and instead of giving it to Washington DC, give it locally in your community to support kids,\u201d said Nathan Benefield, chief policy officer for Commonwealth Foundation, a free market think tank in Harrisburg.<\/p>\n
Someone donates to a scholarship granting organization (SGO), and they get up to $1700 back on their taxes the next year. New rules announced today<\/a> clarify that married couples could get up to $3400 back. The rules also set guidelines on how to set up SGOs and avoid fraud from those making donations.<\/p>\n The scholarship granting organization, in turn, gives money to families or organizations to cover a host of education costs. A student could receive scholarship for private school tuition, coverage of extracurriculars like music or tutoring clubs, or public school families could get reimbursed for activities with fees in their district\u2013 like field trips or sports.<\/p>\n All taxpayers can donate to any organization in the country, but organizations can only receive donations if their state opts into the program.<\/p>\n Democratic Gov. Josh Shapiro has yet to confirm Pennsylvania\u2019s participation.<\/p>\n \u201cHe said he\u2019s waiting for these regulations. They are out now, so he can see them. and it really gives him no excuse. There\u2019s no reason not to participate,\u201d Benefield said.<\/p>\n Some Democratic education advocates argue that the funds can be a slippery slope to publicly funding discrimination, if dollars go to private religious schools that do not accept all lifestyles.<\/p>\n More broadly, school choice policy sparks debates about if public education spending is benefiting all students regardless of income level.<\/p>\n Income thresholds for families accepting scholarships are loose; any household under 300% the median income in a county qualifies. One school choice advocacy group estimates<\/a> 92% of American students are eligible to receive funds, roughly 1.8 million in Pennsylvania. County income thresholds in the commonwealth all have $200,000 or higher eligibility caps.<\/p>\n Commonwealth Foundation estimates $700 million could dump into Pennsylvania scholarship organizations, if 10% of households eligible to receive the full credit donate (aka they pay enough taxes that they\u2019d actually get $1700 shaved off what they owe).<\/p>\n