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| Indiana School Scholarship Tax Credit Plan | Helping Families Achieve Education Goals | |
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Home - Implementation Info Center
New Content Administrative Rules
Accrediting Agencies (Final) Approved Tests (Final)
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Have Questions?
With the passage of STC only a month old, a number of questions and issues remain to be resolved in the rulemaking and implementation processes. We would be happy to try and answer your questions and plug you into our regular email updates. Please contact Lindsey Brown at School Choice Indiana for more information.
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Information for Potential Scholarship Granting Organization (SGO) Start-Ups The purpose of the Indiana School Scholarship Tax Credit (STC)
program is to help low and middle income families access the private or
public school of their choice. Scholarship
granting organizations (SGOs) would be organized to provide scholarship
support to eligible families. Under the law, SGOs must meet the following requirements: ·
IRS
501(c)(3) charitable entities organized to provide scholarships. ·
SGOs
cannot be organized to serve one particular school, but organize to serve
students and provide scholarships to any eligible school they choose.
·
At least
90% of all receipts qualified for the tax credit must be paid out in
scholarships. 100% of all
other income from qualified donations (i.e. interest, investments), must
go to scholarships. ·
No staff
of the SGO can be related to the management of a participating school or
provide scholarships to benefit their family or relatives. ·
SGOs must
conduct annual audits and provide financial reports to the state in a
manner and timeline to be determined. ·
SGOs must
determine the eligibility of students under the program (i.e. income,
previous school attendance, etc.), but are free to develop their own
application processes. ·
SGOs must
conduct criminal background checks on all employees and board members. SGOs are also able to establish their own eligibility
requirements, so long as they do not exceed those included in the statute.
For example: ·
Income.
Eligible families must have an income at or below 200% of the
federal free or reduced lunch income levels.
An SGO can establish a maximum below this to serve lower income
families, but they cannot exceed it. ·
Students
must have been enrolled in public school the previous year or be entering
Kindergarten. An exception is
in the case where the child was receiving a scholarship in the previous
year through a qualified scholarship program. ·
Scholarships
are granted to students to attend the school of their choice, not granted
to schools. Scholarships are
portable, in that once granted by an SGO to a student the child can use it
in any school in the state eligible under the statute.
·
Scholarship
amounts are set by the SGO, but cannot exceed the cost of tuition and fees
at the school where the student will enroll. SGOs are responsible for their own fundraising from
individuals and corporations. Until
state rules are adopted, it is not clear the process for qualifying these
donations for the tax credit, but it will be on a first-come, first served
basis and utilize a web-based application when fully-implemented. My private school already has a 501(c)(3) foundation in
place. Can it become an SGO? Maybe. If the
foundation is providing scholarships already, is not limited to a
particular school(s), and could be certified by the state it may qualify.
However, until rules are adopted how this might work and a reliable
answer is unclear. When can we start raising funds from donors and qualifying
them for the tax credit? First, you have to have your SGO application approved or
certified by the Indiana Department of Education. Those rules and
processes are being considered right now. It is not clear yet when
exactly donations can access the tax credit, but initial analyses by state
officials indicate contributions made after Dec. 31, 2009. What schools could an SGO serve? SGOs cannot serve a particular school or set of schools.
Scholarships are awarded to students, not schools, and students can
choose to move from one school to another.
SGOs may be able to award scholarships to children applying from
particular geographic regions, but the scholarship would follow the child
to the school of their choice – even if the child moves out of the area.
Note that these are questions remaining to be answered in the
rules. Can a donor direct his or her funds to provide scholarships
for kids to attend a particular school or even for a particular student? No. Does this program serve public schools? An SGO can provide scholarships for tuition fees for
children enrolling in public schools outside of their residency.
This is up to the SGO and would only be available in those school
districts accepting transfer students. How can an SGO be created? SGOs must organize as IRS 501(c)(3) organizations and apply
to the Indiana Department of Education for certification as an SGO to
participate. This will all be
determined in the rulemaking and implementation processes.
Assistance to potential SGO organizers will be available in the
weeks and months ahead, with details provided as these initiatives are
developed. |
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