Parental Choice Tax Credit

Mark your calendars - Applications start on Friday, December 1, 2023 and closes on February 1, 2024. This gives a 60-day window for priority consideration. To review the official document, please click here. 

Highlighted within the document are a few key takeaways:

• The portal window will be open December 1, 2023 - February 1, 2024. This gives a 60-day window for priority consideration.
• PreK-12^th Grade is clearly stated.
• One application per family, rather than one application per child.
• Schools will NOT collect Social Security Numbers from students.
• Rather than the previously mentioned "affidavit," schools will submit an "enrollment verification form," provided by the state through the portal. Items needed for this are outlined in the Rules document.
• Schools will electronically verify that funds were paid toward the tuition by November 1st of each year. Items asked for are outlined in the Rules document.

Not clarified in the OTC Rules Document:

• Months payments will be made.
• Given the priority window was pushed back, acceptance announcements will not be until March at the earliest, which could push disbursement to April/May.

Parental Choice Tax Credit Act

Parental Choice Tax Credit Act - In May 2023, the governor signed the Oklahoma Parental Choice Tax Credit Act. The act provides refundable Oklahoma state income tax credits of $5,000 to $7,500 per child to parents whose children attend private schools. Effective in January 2024, the parental tax credits will tremendously impact families now in Catholic schools and those considering Catholic schools. With the new funds available to families, the diocese expects greater demand for Catholic education. Visit the Oklahoma Commission Parental Choice Tax Credit Website for more information. 

Frequently Asked Questions: 

 

What is the private school tax credit?

Beginning in tax year 2024, a refundable income tax credit is allowed for certain Oklahoma taxpayers who pay, or expect to pay, tuition and fees to an eligible private school on behalf of an eligible student. An eligible taxpayer is someone who is subject to the tax laws of the state of Oklahoma, and who is a biological or adoptive parent, grandparent, aunt, uncle, legal guardian, custodian, or other person with legal authority to act on behalf of the eligible student.
 

How do I apply?

To claim the private school tax credit, you will apply online beginning on Friday, December 1, 2023 on the Oklahoma Commission Parental Choices Tax Credit website. You will need to upload with the application a completed Affidavit of Enrollment and a copy of the Oklahoma income tax return or the federal income tax return for the second preceding tax year of the household of which the student is a member. If the household had no tax filing requirement, taxpayer shall submit the Affidavit for No Filing Requirement (OTC Form 591-C) and an Internal Revenue Service (IRS) Verification of Nonfiling Letter, which provides proof from the IRS that there is no record of a filed tax form for the year requested. More details will be provided as we find out more information from OTC.
 

Who qualifies as an Oklahoma taxpayer?

An Oklahoma taxpayer is any person who is liable to pay any Oklahoma tax, or required to file a report, a return, or remit any tax required by the provisions of any Oklahoma tax law or required to obtain a license or a permit or to keep any records under the provisions of any Oklahoma tax law.
 

Who qualifies as an eligible student?

A student who is a resident of Oklahoma and is eligible to enroll in an Oklahoma public school. Additionally, the student must be enrolled in and attending an eligible private school in Oklahoma.
 

Are all private schools eligible?

At the current time, a private school is considered eligible only if it is accredited by the State Board of Education or another accrediting association, which includes the Oklahoma Private School Accrediting Commission (OPSAC) and any OPSAC-recognized accrediting associations. In addition, a private accrediting association may be approved by the State Board of Education and have the authority to accredit schools within their association. The Oklahoma Tax Commission does not make determinations as to whether a private school has met accreditation standards of either the State Board of Education or other accrediting associations. 
 

What expenses qualify?

"Qualified expense" means tuition and fees at a private school accredited by the State Board of Education or another accrediting association, which includes the Oklahoma Private School Accrediting Commission (OPSAC) and any OPSAC-recognized accrediting associations. Fees 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.
 

Do I apply for the credit once a year, or do I need to apply before each school semester/quarter?

Only one application is required for each tax year. For tax year 2024, the application process opens on December 8, 2023.  Each year thereafter, you can apply for the credit beginning on the first day of December preceding the applicable tax year. For example, the application process opens on December 1, 2024, for tax year 2025. The deadline to apply is on or before December 31 of the tax year you incur private school tuition and fees, or until the cap has been met, whichever occurs first.
 

If my student's household income is less than $150,000, what do I need to do to receive priority consideration?

For tax year 2024, the application period for students with household income of less than $150,000, will be December 1, 2023, through January 22, 2024.  For tax year 2025 and subsequent tax years, the application period for students with household income of less than $150,000, will be December 1st (preceding the applicable tax year) through January 15th.  Applications will be processed on a first-come- first-serve basis. Please note that submitting an application during this period does not guarantee eligibility for the credit. Only properly submitted applications approved by the OTC will be eligible for the credit until the cap is met. 
 

How much is the cap for the private school tax credit?

• For tax year 2024, the OTC cannot authorize more than $150 million tax credits.
• For tax year 2025, the OTC cannot authorize more than $200 million tax credits.
• For tax year 2026 and subsequent tax years, the OTC cannot authorize more than $250 million tax credits.

 

If I am the grandparent of the student, am paying the student's private school tuition in 2024, and the student has never lived with me, am I required to provide a copy of my tex return of the tax return of the household where the student lives?

You must provide a copy of the Oklahoma income tax return or the federal income tax return for the second preceding tax year of the household where the student resides.
 

What if my student did not live with me in 2022?

If the student is living with you now but did not live with you in 2022, you still must provide a copy of your 2022 income tax return. The amount of your 2022 federal adjusted gross income (AGI) determines the amount of credit for which your student may be eligible.
 

What is the maximum amount of the tax credit for which I may be eligible?

The maximum amount of the credit is determined by the total federal AGI of the student's household during the second preceding tax year.

 

FEDERAL                      MAXIMUM AMOUNT OF 

    AGI                              CREDIT PER YEAR                            
$0 - $75,000                        $7,500

$75,001 - $150,000             $7,000

$150,001 - 225,000             $6,500

$225,001 - $250,000           $6,000

$250,001 and up                  $5,000

If my spouse and I have an income tax filing status of "married, filing separately," how do we determine the amount of federal AGI?

If you have an income tax filing status of "married, filing separately", the federal AGI reported on each tax return for the second preceding tax year will be added together to determine the student’s household federal AGI.
 

If my application is approved, how much tax credit will I receive?

The credit amount will be based on the anticipated private school tuition and fees you expect to pay for the tax year, as indicated in the private school’s Affidavit of Enrollment. Each payment will not exceed half of the allowable credit for the applicable tax year.
 

What if I have more than one child who is eligible for the credit?

In the case of having multiple eligible students, the taxpayer may receive the tax credit for each eligible student. For example, if the federal AGI of the household where the students reside is less than $75,000, the taxpayer may qualify for up to $7,500 per year per eligible student. It is important to note, however, that a separate application must be completed and submitted for each eligible student for each tax year.
 

If my student is graduating in the spring of 2024, will I be allowed to use all my 2024 tax credit for the tuition and fees I paid for the one semester?

No, the amount of your credit will be limited to half the amount of your 2024 allowable credit, not to exceed the amount of tuition and fees for the one semester.
 

If my expenses exceed my credit, can I use the following year's credit to pay this year's expenses?

The credit can be claimed only for the tax year in which the qualified expenses are actually incurred.  Where qualified expenses are incurred in excess of the allowable credit for any given tax year, the excess of qualified expenses cannot be used in claiming the credit for any other tax year.
 

If I owe delinquent taxes to the Tax Commission or a debt to any local entity in Oklahoma or Oklahoma state agency, will my credit payment be reduced as a result of my outstanding obligations?

Before issuing the credit payment, the Tax Commission will deduct from the amount of the credit any outstanding state tax, penalty, and interest thereon, which the taxpayer owes pursuant to any state tax law. Additionally, if the Tax Commission has received notice from another state or county entity that the taxpayer has an outstanding debt, the Tax Commission will deduct from the tax credit payment the amount owed to that entity, plus any collection expenses and costs.
 

Will I have to pay income tax on the private school tax credit payment?

If your federal AGI includes any private school tax credit payments, the amount included in federal AGI will also be included in your Oklahoma taxable income. Please contact your own tax professional if you need more information.
 

Will I receive a 1099-G from the OTC?

Form 1099-G is for certain types of government payments, such as unemployment compensation, state or local income tax refunds, credits or offsets. The OTC will issue Form 1099-G to taxpayers who receive a Parental Choice Tax Credit payment.
 

How is the money transferred to the school for tuition payment?

We are working to gather all information and hope to be able to provide an update in November. Please check back soon!
 

How will this differ from a FACTS application?

We are working to gather all information and hope to be able to provide an update in November. Please check back soon!
 

Do I need to fill out both the state application for the Parental Choice Tax Credit and FACTS App?

We are working to gather all information and hope to be able to provide an update in November. Please check back soon!

 

SAVE THE DATE:

 

Parental Choice Tax Credit Sign Up Fair will be available at participating schools. Please contact your school to confirm dates and times as they are subject to change.

Bishop Kelley High School Tentative Details

Bishop Kelley is still in the planning stages of this event, so details are subject to change.

However, we anticipate the fair will look something like this:

Hosted by BKHS, join us

Friday, December 8, 2023 from 3:00 - 8:00 PM or

Saturday, December 9, 2023 from 10:00 AM - 3:00 PM

Bishop Kelley Dining Hall

3905 South Hudson Ave, Tulsa, OK 74135

Who can come to the BK Sign Up Fair?

• Families with BK students or rising freshmen
• Families at (Pre)K-8 Catholic schools, Diocesan or Private, pending the school's participation in the fair - details forthcoming.
• Families whose 9-11th grade students will transfer to Bishop Kelley for the 2024-2025 school year.

What to expect at the BK Sign Up Fair:

• Information and education on what this tax credit is, how to apply, and how to secure your funding.
• Computer kiosks for families to register online.
• Access to digital or hard copies of needed paperwork.
• Volunteers from various language groups who have been trained can assist families during the Sign Up Fair.
• Representatives from participating Tulsa-area Catholic schools.