Oklahoma Tax Commission Approves Rules for School Choice Tax Credits

Lawmakers say further legislation might be necessary to clarify the process.

This is a photo of students raising their hands to their teacher.
Families with students in private school or home school can submit applications starting Dec. 1 for refundable tax credits to offset their educational costs.

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Rules to implement the state’s new school choice tax credits advanced Tuesday, though questions about the program’s accessibility still persist at the state Capitol.

Gov. Kevin Stitt now has 45 days to OK the rules after the Oklahoma Tax Commission voted unanimously to approve them. The regulations are automatically rejected if the governor doesn’t act.

The Oklahoma Legislature also will consider the rules during its 2024 session.

The $5,000-$7,500 refundable tax credits created through House Bill 1934 were meant to make private and homeschool education more affordable. Lawmakers, though, raised questions during the Tax Commission’s rulemaking process about how accessible the program will truly be for all households.

The Tax Commission is focused on making the application process easier for families and schools, said Doug Linehan, the agency’s executive director.

“We’re trying to simplify the taxpayer experience and simplify the school experience while still maintaining an adequate level, if you will, of controls in place to make sure the money gets to where it’s supposed to go to,” Linehan said.

The Tax Commission received hundreds, if not a thousand, comments from the public in the weeks before Tuesday’s vote, deputy executive director Joe Gappa said. Agency staff made some adjustments to the rules based on the feedback.

The commission will allow one application for an entire household. Before, it had suggested families submit an individual application for every child.

The commission also nixed a requirement that private schools provide a social security number for students applying for tax credits. This is information many schools don’t collect, Gappa said.

Among the most common requests the Tax Commission received from the public was to allow families to submit applications by the school year rather than the tax year.

The Tax Commission can’t make that change unless lawmakers write it into state law, Gappa said.

Commissioner Mark Wood told agency staff he believed they succeeded in responding to the public’s input while “also understanding that a number of the concerns were not things that you could do because you don’t have power to change the statute.”

“I thought you did a good job of reconciling what did come in and making improvements to it,” Wood said.

Senate President Pro Tem Greg Treat agreed there “may need to be a legislative fix” for some of the rules, his spokesperson, Alex Gerszewski, said in a statement. But Treat, R-Oklahoma City, has been pleased with the commission’s progress so far.

“The biggest and most important takeaways are — the money is there for school choice, the application process is set to start on time next month and will help Oklahoma families get the best education for their kids,” Gerszewski said.

Families can begin submitting applications at 8:30 a.m. Dec. 1 for the 2024 tax year. The deadline will close on Dec. 31 of the year educational expenses were incurred.

Families earning under $150,000 receive priority consideration and have until Feb. 1 to apply.

Each application for a private school tax credit must include an affidavit from the school verifying students’ enrollment and the cost to attend.

Using a tiered system based on household income, the private school tax credit could refund the cost of tuition and fees, textbooks, activities, testing or school uniforms, if the expense is paid directly to the school.

A homeschool tax credit could apply to the price of online learning programs, instructional materials, tutoring or testing fees. Homeschool families qualify for a tax credit up to $1,000 per child.

Private school families can receive $7,500 per child if their household income is under $75,000 a year. Households earning between $75,000 and $150,000 qualify for $7,000 in tax credits.

Students from homes that earn between $150,000 and $225,000 are eligible for $6,500. Families with an annual income from $225,000 to $250,000 could receive up to $6,000 in tax credits.

Tax credits of $5,000 are available to households earning $250,000 and above.

Editor’s note: This story has been updated to correct dates of the application window. Although the Tax Commission initially proposed different dates, the final version of the rules will allow families to apply for tax credits starting on Dec. 1. Households with priority consideration have until Feb. 1 to apply.

Oklahoma Voice is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Oklahoma Voice maintains editorial independence. Contact Editor Janelle Stecklein for questions: info@oklahomavoice.com. Follow Oklahoma Voice on Facebook and Twitter.

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