Signed by Governor Brad Little

Vote Smart's Synopsis:

Vote to pass a bill that establishes a tax credit for adults with children in homeschooling or in private schools.

Highlights:

• Establishes a parental choice tax credit for parents and legal guardians of children between the ages of 5 and 18 who are full-time students in the state of Idaho (Sec. 2).

• Limits the tax credit to a maximum of $5,000 per eligible child per tax year (Sec. 2).

• Requires the state tax commission to provide forms for applying and claiming the tax credit (Sec. 2).

• Requires the tax credit application period to open on January 15 and close after 60 days, beginning in January 2026 (Sec. 2).

• Requires the state tax commission to re-open the tax credit application period until August 15, if the amount of tax credits provided for applicants within the regular official period does not exceed the annual maximum limit (Sec. 2).

• Requires the state tax commission to re-close the tax credit application period, if the annual maximum limit is reached prior to August 15 (Sec. 2).

• Requires the state tax commission to provide preference to applicants whose modified adjusted gross income does not exceed 300 percent of the federal poverty level (Sec. 2).

• Requires the state tax commission to provide preference to applicants who received the tax credit in previous years, beginning in 2027 (Sec. 2).

• Limits refundable tax credits for parents and guardians of children up to 21 years old with disabilities to a maximum of $7,500 (Sec. 2).

• Authorizes parents to request a one-time, advance payment of the tax credit per eligible student within 60 days of notification of receipt of the award (Sec. 2).

• Limits parents eligible to receive advance payments of the tax credit to parents whose modified adjusted gross income is less than 300 percent of the federal poverty level (Sec. 2).

• Specifies that eligible claims for the tax credit exclude the following (Sec. 2):

• Children enrolled part-time or full-time in public schools;

• Unqualified expenses incurred on behalf of the student;

• Tuition or fees related to academic instruction provided to the parent by the parent’s eligible student; or

• Multiple parental claims for a singular eligible child.

• Requires parents to fill out and submit a satisfaction and engagement survey provided with the application form (Sec. 2).

• Limits the total amount of parental choice tax credits to a maximum of $50 million (Sec. 2).

• Requires the tax commission to provide tax credit on a first-come, first-served basis, if the tax credits allowed exceed the limit of $50 million (Sec. 2).

• Requires the Idaho legislature to provide the governor, the senate local government and taxation committee, the house revenue and taxation committee, and the joint finance-appropriations committee with a report with the following information (Sec. 2):

• The total amount of tax credits provided each year;

• The number of parents who applied each year;

• The amount of average tax credit allowed;

• The number of credits distributed to parents whose income is less than 300 percent of the federal poverty level; 

• The number of parents who applied for advance payments;

• The number of advance payments awarded; 

• The median amount of advance payments awarded;

• The geographic area of parents applying for the credit;

• The number of eligible students on the waiting list each year; and

• A list of categories of qualified expenses for which recipients used the tax credit.

• Requires the legislative services office to provide recipients with a parent satisfaction and engagement survey to evaluate the performance of the nonpublic schools attended by the parent’s eligible children, beginning in 2026 (Sec. 2).

• Requires the legislative services office to provide the governor, the senate local government and taxation committee, the house revenue and taxation committee, and the joint finance-appropriations committee with a report of the results of the satisfaction and engagement survey (Sec. 2). 

• Prohibits the provision of tax credits to applicants who fail to apply within the appropriate application period (Sec. 2).

• Prohibits parents from claiming the tax credit on a tax return without prior approval (Sec. 2).

• Requires the state tax commission to provide the following on its website, until the annual maximum limit is reached (Sec. 2):

• The annual maximum limit;

• The cumulative amount of credits claimed in applications; and

• The cumulative amount of advance payments awarded.

• Requires the state tax commission to ensure notification of parents that participation in the tax credit program is a parental placement under the federal Individuals with disabilities education act (Sec. 2).

• Prohibits use of this legislation by government agencies to exercise control over nonpublic schools or students (Sec. 2).

• Specifies that this bill is effective retroactively on January 1, 2025 (Sec. 5).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes a tax credit for adults with children in homeschooling or in private schools.

Highlights:

• Establishes a parental choice tax credit for parents and legal guardians of children between the ages of 5 and 18 who are full-time students in the state of Idaho (Sec. 2).

• Limits the tax credit to a maximum of $5,000 per eligible child per tax year (Sec. 2).

• Requires the state tax commission to provide forms for applying and claiming the tax credit (Sec. 2).

• Requires the tax credit application period to open on January 15 and close after 60 days, beginning in January 2026 (Sec. 2).

• Requires the state tax commission to re-open the tax credit application period until August 15, if the amount of tax credits provided for applicants within the regular official period does not exceed the annual maximum limit (Sec. 2).

• Requires the state tax commission to re-close the tax credit application period, if the annual maximum limit is reached prior to August 15 (Sec. 2).

• Requires the state tax commission to provide preference to applicants whose modified adjusted gross income does not exceed 300 percent of the federal poverty level (Sec. 2).

• Requires the state tax commission to provide preference to applicants who received the tax credit in previous years, beginning in 2027 (Sec. 2).

• Limits refundable tax credits for parents and guardians of children up to 21 years old with disabilities to a maximum of $7,500 (Sec. 2).

• Authorizes parents to request a one-time, advance payment of the tax credit per eligible student within 60 days of notification of receipt of the award (Sec. 2).

• Limits parents eligible to receive advance payments of the tax credit to parents whose modified adjusted gross income is less than 300 percent of the federal poverty level (Sec. 2).

• Specifies that eligible claims for the tax credit exclude the following (Sec. 2):

• Children enrolled part-time or full-time in public schools;

• Unqualified expenses incurred on behalf of the student;

• Tuition or fees related to academic instruction provided to the parent by the parent’s eligible student; or

• Multiple parental claims for a singular eligible child.

• Requires parents to fill out and submit a satisfaction and engagement survey provided with the application form (Sec. 2).

• Limits the total amount of parental choice tax credits to a maximum of $50 million (Sec. 2).

• Requires the tax commission to provide tax credit on a first-come, first-served basis, if the tax credits allowed exceed the limit of $50 million (Sec. 2).

• Requires the Idaho legislature to provide the governor, the senate local government and taxation committee, the house revenue and taxation committee, and the joint finance-appropriations committee with a report with the following information (Sec. 2):

• The total amount of tax credits provided each year;

• The number of parents who applied each year;

• The amount of average tax credit allowed;

• The number of credits distributed to parents whose income is less than 300 percent of the federal poverty level; 

• The number of parents who applied for advance payments;

• The number of advance payments awarded; 

• The median amount of advance payments awarded;

• The geographic area of parents applying for the credit;

• The number of eligible students on the waiting list each year; and

• A list of categories of qualified expenses for which recipients used the tax credit.

• Requires the legislative services office to provide recipients with a parent satisfaction and engagement survey to evaluate the performance of the nonpublic schools attended by the parent’s eligible children, beginning in 2026 (Sec. 2).

• Requires the legislative services office to provide the governor, the senate local government and taxation committee, the house revenue and taxation committee, and the joint finance-appropriations committee with a report of the results of the satisfaction and engagement survey (Sec. 2). 

• Prohibits the provision of tax credits to applicants who fail to apply within the appropriate application period (Sec. 2).

• Prohibits parents from claiming the tax credit on a tax return without prior approval (Sec. 2).

• Requires the state tax commission to provide the following on its website, until the annual maximum limit is reached (Sec. 2):

• The annual maximum limit;

• The cumulative amount of credits claimed in applications; and

• The cumulative amount of advance payments awarded.

• Requires the state tax commission to ensure notification of parents that participation in the tax credit program is a parental placement under the federal Individuals with disabilities education act (Sec. 2).

• Prohibits use of this legislation by government agencies to exercise control over nonpublic schools or students (Sec. 2).

• Specifies that this bill is effective retroactively on January 1, 2025 (Sec. 5).

Full Bill Text