Public Policy Update: Education Tax Credit Becomes Scholarship Program

school desk

This is the final year that families with children with disabilities who moved their children into private or home schools after July of 2010 can claim the North Carolina education tax credit.  Starting in the spring of 2014, North Carolina will offer a scholarship program for children with disabilities who leave public school and enter private or homeschools. While the tax credit and the scholarship program are similar, there are some important things you should know.

Most important things you need to know:

  • This is the last year of the North Carolina tax credit for the education of children with disabilities.
  • If you qualify, you can still claim the tax credit on your 2013 taxes (which you usually complete by mid-April of 2014).
  • You should try to claim the tax credit if you can – unused portions carry over for three years, AND if you are using the credit, you get priority for the scholarship.
  • If your child has moved to a private or homeschool or you are considering a move to a nonpublic school, you can apply for the children with disabilities scholarship program starting October 1, 2013.
  • The scholarship program has similar, but not exactly the same, eligibility requirements as the tax credit. For example, there is no income limit on the scholarship program, and students are only required to have attended public school for one semester (see below).
  • The scholarship program has limited funds, so it’s likely that not everyone who applies will get a scholarship.
  • Like the tax credit, the scholarship is for children in kindergarten through 12th grade. It does not cover preschool or college expenses.

As with the tax credit, the child must meet some specific eligibility requirements to apply for the scholarship.

A child must meet at least ONE of the following requirements, plus ALL of the eligibility criteria below that list:

  • Was enrolled in an NC public school during the previous semester (one semester instead of two for the tax credit)
  • Received special education or related services through an NC public school as a preschooler with a disability during the previous semester
  • Received a scholarship grant (or tax credit) for the previous semester
  • Is eligible for enrollment in kindergarten or first grade in an NC public school

In addition to meeting one of the above requirements, the child must meet ALL of the following criteria:

  • Must require an IEP and be receiving special education or related services on a daily basis
  • Must be under the age of 22 and must not have received a high school diploma
  • Cannot have been placed in a nonpublic school or facility by a public agency at public expense
  • Must not have spent any time enrolled in a postsecondary institution as a full-time student taking at least 12 hours of academic credit
  • After initial receipt of a scholarship grant, a child will be re-evaluated every three years by the public school system

To apply for the children with disabilities scholarship, go to the North Carolina State Education Assistance Authority website or call 855-330-3955. Find more information about the scholarship on the ASNC website.

North Carolina also now offers a different “opportunity scholarship” for low-income students who move to a nonpublic school. For more information on that program, see the ASNC website or the NC State Education Assistance Authority website.

If you have questions about public policy issues, please contact Jennifer Mahan, Director of Advocacy and Public Policy, at 919-865-5068 or jmahan@autismsociety-nc.org.

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