Arizona

Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program

  • Tax-Credit Scholarship
  • Enacted 2009
  • Launched 2009

Arizona allows corporations, including stockholders of S-Corporations, to receive tax credits for donating to School Tuition Organizations (STOs), nonprofits that provide private school scholarships. Eligible scholarship students include children with special needs, and students who are currently, or have ever been, part of the Arizona foster care system. Depending on eligibility, students can receive more than one scholarship from STOs in a given year.

We do not administer this program.

Eligibility Test Apply

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  • 1,168

    Scholarships Awarded (2022–2023)

  • 12%

    of Students Eligible Statewide

  • 137

    Schools Participating (2022–2023)

  • 11

    Scholarship Organizations (2022–2023)

  • $3,844

    Average Scholarship Value (2022–2023)

  • 37%

    Value as a Percentage of Public School Per-student Spending

Arizona’s Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program Participation

Scholarships Awarded
School Year Ending
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Student Funding

Use of Funds

Scholarship funds are used to pay tuition at qualified private schools for full-time attendance.

Funding Amount and Source

Private donors fund this program by donating to STOs and receiving tax credits for their donation, up to certain limits. STOs may award scholarships up to the private school tuition or 90% of the state funding that otherwise would go to that pupil had he or she remained in public school, whichever is less. That amount varies depending on the services the student’s disability requires. Pre-approval is required for donations. Total credits claimed cannot exceed $6 million, meaning roughly 1,500 students can participate, or less than 1% of Arizona’s K–12 student population. Students are eligible to receive multiple tax-credit scholarships under the four state programs. Tax credits are worth 100% of the value of the contributions to scholarship organizations. Total credits claimed cannot exceed $6 million, meaning roughly 1,500 students can participate, or less than 1% of Arizona’s K–12 student population.

(Last updated July 15, 2024)

Student Eligibility

Students are eligible for this scholarship if they have been identified as having a disability under Section 504 of the Rehabilitation Act, or been identified as a child with a disability by a school district. They must provide a copy of either an Individualized Education Plan (IEP), 504 plan, or Multidisciplinary Evaluation Team (MET) issued by an Arizona school, but the documentation does not have to be current to qualify. Students are also eligible for this scholarship if they are currently, or were previously, placed in the Arizona foster care system at any time before graduating high school. Students may receive multiple tax-credit scholarship awards or receive awards from multiple tax-credit scholarship programs as eligible. Students may not participate in the ESA program while accepting funds from the program.

(Last updated July 15, 2024)

EdChoice Expert Feedback

Arizona’s tax-credit scholarship program for disabled and displaced students helps over 1,000 students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity.  Students with special needs and those in foster care are eligible to receive a tax-credit scholarship. Slightly more than 10 percent of Arizona students are eligible to receive a scholarship via this program, and all students are eligible to receive a scholarship via the individual-donor scholarship program.   Statewide, fewer than 10 percent of students participate in one of Arizona’s private educational choice options (including the universal-eligibility Original Individual-Donor Tax-Credit Scholarship Program, the Low-Income Corporate-Donor Tax-Credit Scholarship Program, “Switcher” Tax-Credit Scholarship Program, and the Empowerment Scholarship Account Program).    The average scholarship size is about $3,800, which is approximately 39 percent of the average expenditure per student at Arizona’s district schools. There is no cap on scholarship values and students may receive more than one scholarship. Students from low-income families and those who have switched from the public school system may also receive scholarships via the other tax-credit scholarship programs in addition to the original scholarship program that is available to all students. Tax credits are worth 100 percent of the value of the contributions to scholarship organizations, but only $6 million in tax credits are available annually, which is equivalent to only 0.06% of Arizona’s total K–12 current expenditures.   In order to expand access to educational choice, Arizona policymakers should significantly increase the amount of available tax credits.  Arizona’s scholarship program generally avoids unnecessary and counterproductive regulations.   (Last updated December 18, 2023) 

Rules and Regulations

Program Guidelines

  • Income Limit: None
  • Prior Year Public School Requirement: None
  • Enrollment Cap: None
  • Scholarship Cap: 90% State Funding
  • Testing Mandates: None
  • Credit Value: 100%
  • Per Donor Credit Cap: None
  • Budget Cap: $6 million
  • Special Needs Pathway: Pathway

Participant and Family Guidelines

  • Education Requirements: N/A
  • Parent Supplemented Funds/Scholarships: Allowed
  • Miscellaneous: N/A

Education Provider Guidelines

  • Accreditation: State or regional
  • Employment Standards: Background checks
  • Nondiscrimination: Comply with applicable state and federal anti-discrimination laws
  • Calendar/Curriculum/Attendance: N/A
  • Financial: N/A
  • Miscellaneous: N/A

STO Requirements

  • Scholarship to Contribution Ratio: Use at least 90% of contributions for scholarships
  • State Reporting:
    • Allow the state to verify that scholarships have been awarded to students attending a qualified school
    • Annually report to the state:
      • Data on accepted contributions
      • Grants awarded
      • The amount of money being held for identified student scholarships in future years
  • A list of participating schools with the number and dollar amount of scholarship awards received
  • Financial:
    • CPA audit
    • Report the salary of the STO’s top three officials for the fiscal year
  • Award Priority: None
  • Miscellaneous: Make scholarships available for more than one school

(Last updated December 12, 2024)

Governing Statutes

Ariz. Rev. Stat. 43-1184; 43-1501 through 1507; and 20-224.07

(Last updated July 15, 2024)