under IC 20-8.1-6.1-14 to determine qualified educational
expenditures for purposes of section 3.1 of this chapter.
income that is more than three hundred fifty percent (350%)
of the federal income poverty level as determined annually by
the federal Office of Management and Budget under 42 U.S.C.
A taxpayer described in this subsection is not entitled to a credit under this chapter for expenditures made before July 1, 2007, with respect to the dependent described in this subsection. The credit for such a taxpayer for expenditures made with respect to the dependent after June 30, 2007, is equal to the lesser of the qualified education expenditures of the taxpayer or the following amount per taxpayer:
Taxable Year Ending In Amount
2008 and 2009 $500
2010 and 2011 $1,000
2012 and 2013 $1,500
2014 and 2015 $2,000
2016 and 2017 $2,500
This subsection expires for taxable years ending after 2018.
(d) The department shall develop a process and create forms that will:
(1) permit the taxpayer to assign credits under this chapter to the school of choice in which the taxpayer's dependent is enrolled; and
(2) allow the school that receives an assignment of credits to claim and receive the amount of the credit as soon as the taxpayer has filed the required income tax return for the taxable year.
(e) If the amount of the credit provided by this section that a taxpayer uses during a particular taxable year exceeds the sum of the taxes imposed on the taxpayer by IC 6-3 for the taxable year after the application of all credits that under IC 6-3.1-1-2 are to be applied before the credit provided by this section, the excess shall be returned to the taxpayer as a refund.
(f) Acceptance by a taxpayer of a credit for qualified education expenditures for a dependent under this section does not provide any governmental entity or agency of the state with jurisdiction, authority, or control over the dependent's educational provider.
school (as defined in IC 20-10.1-1-3) or a public school (as defined
in IC 20-10.1-1-2) in which a dependent is enrolled but that is not
the dependent's school of legal settlement for purposes of the
general school tuition support formula, if the school:
(1) is accredited by the state of Indiana or a national accrediting body;
(2) has an Indiana statewide testing for educational progress test (ISTEP) school corporation percentage of at least fifty percent (50%) using the percentage of students who had ISTEP tests administered by the school corporation during the school year and who scored below the academic standards set for the test;
(3) complies with all health and safety laws that apply to public or nonpublic schools, respectively;
(4) holds a valid occupancy permit if required; and
(5) certifies that it will not discriminate in admissions on the basis of race, color, or national origin.
(d) As used in this section, "scholarship" refers to a scholarship provided under the scholarship program established by subsection (e).
(e) There is established the freedom to choose scholarship program to assist parents and guardians to pay the costs of their child attending a school of choice.
(f) A student who meets the following requirements is eligible for a scholarship for a school year:
(1) The student was enrolled in a public school during the school year preceding the first school year for which a scholarship is sought.
(2) The public school attended by the student under subdivision (1) has an Indiana statewide testing for educational progress test (ISTEP) school corporation percentage below fifty percent (50%) using the percentage of students who had ISTEP tests administered by the school corporation during the school year and who scored below the academic standards set for the test.
(3) The student has legal settlement in a school corporation located in Indiana.
(4) The student is enrolled in a school of choice for the school year for which a scholarship is sought.
(5) The student is a member of a household with an annual household income that not more than three hundred fifty percent (350%) of the federal income poverty level as determined annually by the federal Office of Management and Budget under 42 U.S.C. 9902.
(g) The parent or guardian of an eligible student seeking a scholarship must apply to the department. The department shall
prescribe the form of the application. The application must be filed
after June 15 and before July 15 for a scholarship for the upcoming
school year. The department shall make a determination whether
an applicant has an eligible student within thirty (30) days after the
application is filed. The amount of the scholarship for each eligible
student who is enrolled in a nonpublic school of choice is the lesser
(1) the cost of tuition, textbooks, and other mandatory fees, not including fees for extracurricular activities, charged by the school of choice for the eligible student; or
(2) the sum of the average amount per ADM with respect to the public school in which the dependent is eligible for enrollment for:
(A) all components of state tuition support and categorical grants, except special education grants; plus
(B) the ad valorem property taxes for the school corporation's general fund;
for the school year for which the scholarship applies.
The department shall provide the full scholarship amount by paying equal installments to the school of choice at the same times the department makes a tuition support distribution to the public school in which the eligible student has legal settlement. If an eligible student withdraws from a school of choice, the school of choice shall notify the department within ten (10) days. The department shall thereafter terminate payments to the school of choice for that student.
(h) To receive a scholarship distribution, a school of choice must agree with the department to do the following:
(1) Determine before enrolling any potential scholarship students the specific number of scholarship students that will be admitted, and, if applicants under the program exceed the determined number of spaces available at any particular grade level, conduct a random selection process to determine those students that are admitted to that grade level. Exceptions to this random selection may be made to accommodate siblings of students who are already enrolled or selected for enrollment in the school.
(2) Not charge any tuition or other fees in excess of the scholarship amount.
(3) Not charge any tuition or other fees under the scholarship program that exceed the standard rates charged to other students who pay tuition to enroll in the school.
(4) Not refund, rebate, or share a student's scholarship with a parent or the student in any manner.
(5) Use a student's scholarship only for educational purposes.
(6) Provide regular academic progress reports to the parents
of students enrolled under the scholarship program.
(i) Notwithstanding the state tuition support formula and laws governing the counting of pupils in ADM, an eligible student who:
(1) is enrolled in a school of choice that is a public school; and
(2) is not already being counted in ADM of the school corporation in which the dependent has legal settlement;
shall, for purposes of calculating tuition support distributions, be counted as a full additional ADM of the school corporation in which the public school of choice is located after otherwise computing the ADM of that school corporation under the state tuition support formula. This subsection applies to a school corporation for purposes of calculating tuition support distributions regardless of how the scholarship student might otherwise be treated under the school funding formula.
(j) An amount sufficient to provide scholarships and grants under this chapter shall be paid from the state general fund.