Special Needs Tax Credit Available

Story

Special Needs Tax Credit Available

Special Report - February 23, 2012
Thanks to a new law enacted by the General Assembly during the 2011 legislative session, parents of special needs children can now claim a tax credit of up to $3,000 per semester (up to $6,000 annually) for qualified educational expenses. House Bill 344—Tax Credits for Children with Disabilities, allows the tax credit to be used for qualified educational expenses, including costs for tuition, tutoring, or therapy. Children of families seeking to receive the tax credit are required to meet the following conditions:

“Is a child with a disability as defined by” state law;
“Was determined to require an individualized education program as defined by” state law;
“Receives special education or related services on a daily basis”;
Is a child for whom the taxpayer is entitled to deduct a personal exemption” under the Tax Code “for the taxable year.”

“For the initial eligibility for the tax credit, for at least the preceding two semesters, the eligible dependent child shall have been either (i) enrolled in a public school or (ii) receiving special education or related services through the public schools as a preschool child with a disability as defined by” state law. The law also states that eligible children must be “reevaluated every three years by the local educational agency in order to verify that the child continues to be a child with a disability.” Starting in 2016, the child of families applying for the tax credit would only be required to have attended public school for one semester, rather than two.

Parents for Educational Freedom in North Carolina (PEFNC), a statewide organization that advocates school choice, is offering a tutorial for parents of special needs children who are interested in applying for the tax credit to offset their educational expenses. PEFNC has also published a resource to provide answers to commonly asked questions regarding the law’s specific provisions and eligibility restrictions.

Related Resources:
Pro-Family Bill Become Law – July 1, 2011
Education Day at the Legislature – June 10, 2011
Special Needs Tax Credit Bill Filed – March 22, 2011
Tax Credits for Special Needs Children – June 11, 2008