IdahoH 09342026 regular legislative sessionHouseWALLET

TAXATION – Amends existing law to revise provisions regarding the Idaho Parental Choice Tax Credit.

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 3 benefits, 1 costs, 2 mixed.

Advance payments for lower-income families

You can choose a one‑time advance payment per eligible student if you did not claim the credit last year for that student. Your most recent MAGI must be at or below 300% of the federal poverty level. The payment arrives within 60 days of award notice and no later than August 30. You must spend it only on qualified expenses. Payments come from the state refund account. The law also repeals Section 67‑1230 on January 1, 2026 to transition the program.

Refundable credit for K-12 education costs

Beginning with tax year 2025, Idaho gives a refundable parental choice tax credit up to $5,000 per eligible student. Eligible students are Idaho residents ages 5–18, or 5–21 if the child has a disability that requires ancillary personnel. For those students with a qualifying disability, the limit is $7,500 per student. Covered costs include nonpublic school tuition and fees, tutoring in core subjects, textbooks and K–12 curricula, tests and prep, and transportation at the state employee mileage rate. If the credit is bigger than your Idaho tax, you get the rest as a refund, and the credit and any advance are not Idaho taxable income. You must claim the child as a dependent on your full‑time Idaho resident return and file the required application. You cannot claim costs paid with certain state grants. Keep receipts.

Limits and payback rules for claims

You can claim the credit only for qualified costs for an eligible student. You cannot claim it for any semester your child was enrolled full‑ or part‑time in a public school, public charter, public virtual charter, public magnet, or part‑time public kindergarten. These do not count as public enrollment: non‑credit activities, sports, transfers between nonpublic schools, home schooling, or paid IDLA courses not funded as IDLA enrollment. You cannot claim tuition or fees for academic instruction you provide as the parent. Only one parent can claim the credit per student. The State Tax Commission denies or takes back credits that are not allowed. If you got an advance and your child later stops qualifying, you must repay up to the amount of the advance. You must complete the satisfaction survey to keep future eligibility.

Apply on time and keep eligibility

Beginning January 15, 2026, applications open each year on January 15 and stay open 60 days. The State Tax Commission tells you within 30 days after the window closes, and if the yearly limit is not reached it reopens until August 15. You must get approval before you claim the credit on your tax return. If you got the credit, LSO sends you a survey by January 15 and you must return it by March 15. When you apply again, you must attach proof you submitted last year’s survey or you are ineligible. The application also explains that choosing a nonpublic school is a parental placement under IDEA and lists the special‑education rights your child keeps.

Priority rules and $50M yearly cap

The program has a $50 million cap each year. For 2026, parents with MAGI at or below 300% of the federal poverty level are served first. Starting in 2027, prior‑year recipients go first, then parents at or below 300% FPL. After those groups, awards are first‑come, first‑served until the cap is used, and the State Tax Commission keeps a waiting list. The Commission also posts near‑real‑time totals for the cap, requested credits, and advance payments.

Private schools keep control under credit

Nonpublic schools that accept students paid with this credit keep control over their creed, practices, admissions, and curriculum. They are not government agents, and no agency may supervise or control them under this program.

Sponsors & Cosponsors

Sponsor

WAYS AND MEANS COMMITTEE
Affiliation unavailable

Cosponsors

Lori Den Hartog
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 23 • No: 12

House vote • 3/31/2026

House Floor Vote