Oklahoma’s parental choice tax credit update: ‘Non-priority’ applications now being reviewed

The Oklahoma Tax Commission is still working through thousands of applications for the state’s new parental choice tax credits, five months after the high-demand program launched.

About $25 million is left to disburse from the program’s $150 million budget, according to the state agency. The Tax Commission reported $100 million went to 16,800 priority applicants whose households earn no more than $150,000 a year.

The refundable credits offer between $5,000 and $7,500 per student, depending on family income, to offset private-school costs.

Families in the priority group had extra time to apply, and their applications were considered first. The remaining applicants from higher-earning households are considered on a first-come-first-served basis.

About 36,000 people total applied for the tax credits, most of whom did so in the first 90 minutes of the program’s launch.

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With the priority families approved, the Tax Commission is now reviewing non-priority applicants, 4,300 of whom already have been accepted, agency spokesperson Emily Haxton said. The commission relies on its internal records to verify the total income of each family.

The total budget for the private-school program will increase to $200 million in 2025 and $250 million in 2026.

A separate $5 million program offers $1,000 per student for homeschooling costs.

How the parental tax credit program has changed since it was first implemented

The Oklahoma Legislature tweaked the program during its session this year, most notably to prevent the credits from being used to offset delinquent tax liabilities or unpaid debts. Under the program’s current rules, the Tax Commission could deduct a family’s tax credits to cover unpaid obligations.

The credits are now approved by school year rather than calendar year, and they are exempt from taxable income.

Lawmakers also added a provision to offer students the maximum $7,500 credit if they attend an accredited private school that exclusively serves children experiencing homelessness. There is only one such school in the state, Positive Tomorrows in Oklahoma City.

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Students also could qualify for the maximum credit amount if they attend a private school that has 90% enrollment from financially disadvantaged families, defined as earning 250% of the federal poverty line or below. 

The Legislature’s top two leaders, House Speaker Charles McCall, R-Atoka, and Senate President Pro Tem Greg Treat, R-Oklahoma City, were the primary authors of the changes, which Gov. Kevin Stitt has signed into law.

“It gives more clarity on some things that we thought were pretty common sense, but they weren’t written as specifically as they needed to (in the original legislation),” Treat said. “It also opens up new opportunities for the poorest among us to be able to take advantage of that tax credit.”

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