710:50-15-172 Private school tax credit

(a) General provisions. For tax year 2024, and fiscal year ending June 30, 2026, and subsequent fiscal years ending June 30, an income tax credit is allowed for qualified expenses paid for an eligible student to attend an accredited private school. (b) Qualified expenses. Qualified expenses for the private school tax credit include tuition and fees at an accredited private school. Fees may, but are not limited to, include enrollment, registration, or application fees; textbook fees; technology fees; activity fees; testing and assessment fees; and fees paid for school uniforms, if paid directly to the school. Qualified expenses for the private school tax credit do not include tuition and fees paid with a scholarship or otherwise reduced or discounted by the school. (c) Amount of credit . For an eligible student who attends or will attend an accredited private school, the credit amount is equal to the amount of tuition and fees charged to or will be paid by the taxpayer for attending the accredited private school for the full school year, less any scholarships or discounts provided by the school, subject to the following limitations: (1) The maximum credit amount allowed is $7,500 if the combined adjusted federal AGI of the parents or legal guardians of the eligible student during the second preceding tax year does not exceed $75,000; (2) The maximum credit amount allowed is $7,000 if the combined adjusted federal AGI of the parents or legal guardians of the eligible student during the second preceding tax year is more than $75,000 but does not exceed $150,000; (3) The maximum credit amount allowed is $6,500 if the combined adjusted federal AGI of the parents or legal guardians of the eligible student during the second preceding tax year is more than $150,000 but does not exceed $225,000; (4) The maximum credit amount allowed is $6,000 if the combined adjusted federal AGI of the parents or legal guardians of the eligible student during the second preceding tax year is more than $225,000 but does not exceed $250,000; or (5) The maximum credit amount allowed is $5,000 if the combined adjusted federal AGI of the parents or legal guardians of the eligible student during the second preceding tax year is more than $250,000. (6) The maximum credit amount allowed is $7,500 for taxpayers who receive income-based government benefits, including the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or SoonerCare/SoonerSelect, as of the date of the tax credit application. (d) Annual cap and limitation of credit. (1) The total amount of private school tax credits authorized by 70 O.S. § 28-101(C)(1) shall not exceed $250,000,000, unless there is an amount carried forward from the immediately preceding fiscal year wherein the cap was not met pursuant to 70 O.S. § 28-101(D)(3). (2) The total amount of credits allowed may be reduced pursuant to the provisions 70 O.S. § 28-101(I). (e) Claiming the private school tax credit . (1) Application. If an Oklahoma taxpayer incurs or will incur a qualified expense on behalf of an eligible student during the school year, the taxpayer may be eligible to claim the private school tax credit. To apply for the credit, the taxpayer shall complete and submit an online application for each eligible student and include the following documentation and information with the application: (A) The name, address, and social security number or individual taxpayer identification number (ITIN) of the taxpayer. (B) The name, address, date of birth, and social security number or ITIN of the eligible student. (C) If the taxpayer is not the parent or legal guardian of the eligible student, the taxpayer shall provide a signed parental consent form to allow the taxpayer to apply for the credit on behalf of the eligible student. (D) Income verification of the parents or legal guardian of the eligible student, according to one of the following: (i) Verification of federal AGI for the second preceding tax year of the parents or legal guardians of the eligible student, which may include providing copies of the applicable Oklahoma income tax return(s) or federal income tax return(s). If, at the time of submission of the tax credit application, the taxpayer has not filed the second preceding years’ tax return, but had a filing requirement, and therefore AGI cannot be verified, the tax credit application will be denied and must be resubmitted once the second preceding tax year return is filed and received by the Oklahoma Tax Commission. The resubmission date and time of a complete application will determine the applicant's place in line. (ii) If the parents or legal guardians had no tax filing requirement for the second preceding tax year, the taxpayer shall attest within the application they did not have a tax filing requirement. (iii) If a taxpayer is a recipient of income-based government benefits including the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or SoonerCare/SoonerSelect, the taxpayer shall not be required to provide additional income verification. The taxpayer must attach documentation that shows he or she is a current recipient of the above-listed government benefits at the time of the tax credit application. Failure to attach the required documentation, without any other income verification documentation, may result in denial of the application. The resubmission date and time of a complete application will determine the applicant's place in line. (E) An enrollment verification form completed by the private school in which the eligible student is enrolled or is expected to enroll with the following information: (i) The name, address and date of birth of eligible student; (ii) The school year during which the qualified expenses will be paid; (iii) The name and address of the private school; (iv) The name and telephone number of a contact person(s) with the private school; and (v) The amount of qualified tuition and fees to be charged the taxpayer for the eligible student during the school year, less any scholarship or tuition and fees discounted or otherwise reduced by the school. (2) Review and submission. The applicant is responsible for reviewing the information contained within the enrollment verification form and verifying its accuracy. (A) Once the enrollment verification form is submitted with an application, the information included within the enrollment verification form cannot be changed until after the application is approved or denied. (B) In order to adjust any enrollment verification information after an application has been submitted, but before approval or denial, a taxpayer must withdraw their application, request a new enrollment verification form from the private school, and submit a new application. The date and time of the new application will be used to determine the applicant's place in line for the credit. (C) To request adjustments to the enrollment verification information after an application has been approved, the taxpayer must request a tuition adjustment or school change as set forth in (7) of this subsection. (3) Application period. For the 2025-2026 school year, the application period will open on February 15, at 9:00 a.m. (CST), prior to the beginning of the applicable school year, and will close no later than December 31, 2025. To ensure payment of the credit by August 30, 2025, applications must be submitted no later than July 15, 2025. (A) Beginning with the 2026-2027 school year and subsequent school years, the application period will begin on March 15 and close on June 15 prior to the beginning of the applicable school year. (B) If March 15 falls on a Saturday, Sunday or legal holiday, the application will open on the next day that is not a Saturday, Sunday or official State of Oklahoma holiday. (4) Priority consideration. The priority period is the first 60 calendar days of the application period. (A) First priority is given to applications for an eligible student whose parents or legal guardians have a combined federal AGI that does not exceed $150,000, as long as the application was submitted within the first 60 days of the application period. (B) Second priority is given to applications for eligible students of taxpayers who received the credit in the prior year, as long as the application was submitted within the first 60 days of the application period. (C) After all timely-filed applications entitled to priority consideration have been reviewed and processed, the Tax Commission will review and process remaining applications for the credit in the order received, provided the annual cap has not been reached. (5) Notification of approval or denial. Notification of tax credit approval will be sent to the applicant by email once a determination has been made that the application is complete and qualifies for the credit. For those applications that are denied, an email will be sent to the applicant, stating the reason for denial. (6) Payment of the credit. For school year 2025-2026, the approved credit will be paid in two payments disbursed on or before August 30, 2025 and January 15, 2026. Beginning with school year 2026-2027, and for subsequent school years, the full credit will be paid by August 30 of the applicable school year. (A) Payment of the credit will be made by the Tax Commission with an individual warrant made payable to the taxpayer and mailed to the private school identified on the application. The taxpayer may collect the check from the school or may choose to use all or part of the tax credit to pay their student's tuition and fees. (B) In the event funds have to be recaptured, the taxpayer is responsible for repayment. (C) If a student changes schools prior to the issuance of the check, the taxpayer must submit a school change notification via OkTAP to redirect the check to the new school. If a school change notification is not submitted prior to the issuance of the check, but a student changes schools, the taxpayer is responsible for collecting the check from the school identified in the approved application. (7) Tuition and fees adjustment. Taxpayers may submit a request to adjust the amount of tuition and fees used to calculate the amount of their approved tax credit. (A) Adjustment requests may be made in the following situations: (i) Student is changing schools to another participating private school and the tuition/fees are higher or lower at the receiving school. (ii) Student is not changing schools but the tuition/fees at their school increased or decreased after the application was approved. (iii) Student received a scholarship or discount not otherwise included in the enrollment verification information provided by the school. (B) Adjustment requests must be made via OkTAP and will be available from July 1 immediately preceding the applicable school year through December 31 immediately following the start of that school year. (C) Adjustment requests are only available after an application has been approved. (D) All adjustment requests must be accompanied by new enrollment verification information. (i) If the student is changing schools, the receiving school must submit enrollment verification information for that student. (ii) If the student is not changing schools, but still requesting an adjustment, the current school must edit the enrollment verification information previously submitted for that student. (E) Adjustments that result in an increase of the approved credit amount may be reflected in the disbursement amount of the check or require the disbursement of an additional check. Adjustments that result in a decrease of the approved credit amount may be subject to repayment if there is a balance due. (F) Adjustment requests will be processed in the order in which received. Those based upon an increase of the tuition and fees may be approved subject to the annual cap and maximum allowable credit amount. (8) Reconciliation. No later than June 15 of each year, each participating private school shall provide required reconciliation information to confirm student enrollment and tuition for each just completed school year. Failure to provide all reconciliation information by the required date may result in removing the school from participating in the Parental Choice Tax Credit Program the following school year. (A) Reconciliation information must be provided electronically. (B) Participating private schools may be required to provide and/or verify the following information: (i) The name and permanent physical address of the private school; (ii) The total number of instructional days; (iii) The total number of instructional days the eligible student was enrolled in the private school; (iv) The amount of tuition and fees paid on behalf of the eligible student for the applicable year; (v) Scholarships and discounts received by that student that were not included in the enrollment verification information provided by the school; (vi) Student information; and (vii) Any other information requested by the Tax Commission. (9) No carryover. The credit can be claimed only for the school year for which the qualified expenses are incurred. Where qualified expenses are incurred in excess of the allowable credit for any given year, the excess of qualified expenses shall not be used in claiming the credit for any other year. (10) AGI determination. The total federal AGI of an eligible student’s parents or legal guardians shall be determined as follows: (A) If the eligible student’s parents or legal guardians have an income tax filing status of "married, filing jointly", the federal AGI reported on the parents’ or legal guardians' second preceding year tax return will be used. (B) If the eligible student’s parents or legal guardians have an income tax filing status of "married, filing separately", the parents' or legal guardians' federal AGI reported on each tax return for the second preceding tax year will be added together to determine the federal AGI. (11) School registration. Each accredited private school that intends to issue enrollment verification forms for the Oklahoma Parental Choice Tax Credit Program, shall annually complete an online registration with the Tax Commission. Registration shall include the following information: (A) Name, mailing address, phone number, FEIN, and website of the private school; (B) Permanent physical address of the school location in Oklahoma; (C) Primary and secondary contact information for the private school, including proof of employment; (D) Proof of accreditation from the State Board of Education or another accrediting association; and (E) Other school identification information as requested by the Tax Commission. (12) Notification of non-use. Taxpayers that claimed the credit shall notify the Tax Commission electronically no later than 30 days after the date on which the eligible student: (A) Enrolls in a public school, including an open-enrollment charter school; (B) Enrolls in a nonaccredited private school; (C) Is no longer enrolled in an accredited private school; (D) Graduates from high school; or (E) Is no longer utilizing private school tax credits for any reason. (13) Recapture. The Tax Commission shall recapture private school tax credits if: (A) The credit was claimed for expenditures that were not qualified expenses; (B) The taxpayer has claimed an eligible student who no longer attends an accredited private school or has enrolled in a public school for the period for which the credit was claimed; or (C) Taxpayer fails to comply with the applicable Oklahoma statutes and regulations.