Nonpublic Student Tax Credit
Special Report - February 8, 2011
Parents who determine that their children are better served in a nonpublic school environment in North Carolina may soon be eligible for some tax relief under a bill proposed last week in the General Assembly. HB 41Tax Fairness in Education, sponsored primarily by Representatives Paul “Skip” Stam (RWake), Mike Hager (RRutherford), Jeff Collins (RNash), and Bill Brawley (RMecklenburg), would allow North Carolina parents making up to $100,000 per year the opportunity to qualify for up to $3,500 in tax credits per year for each child educated in a nonpublic school. The bill, which would go into effect in the 2011-2012 school year, was filed in the State House on February 3 with 25 additional co-sponsors.
HB 41 would implement a state income tax credit of $1,250 for each semester a child is educated in a nonpublic school in the state. To qualify for the credit, however, the child must have attended a public school for the two semesters immediately preceding the move to nonpublic education. Beginning with the 2016-17 school year, eligible students would only have had to be enrolled in public school during the one immediately preceding semester. Married households filing taxes jointly with incomes up to $100,000, heads of household with incomes up to $80,000, and single households with incomes up to $60,000 would qualify for the credit. The bill would also allow county commissioners to implement up to a $1,000 personal exemption deduction per child per year for families meeting the same criteria to qualify for the state tax credit.
According to the News & Observer, research staff at the legislature estimate that such a tax credit could account for more than $50 million in savings to the state per year by lowering the number of students enrolled in public schools.
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