Indiana

School Scholarship Tax Credit

  • Tax-Credit Scholarship
  • Enacted 2009
  • Launched 2010

Indiana’s School Scholarship Tax Credit program allows individuals and corporations to claim a 50% tax credit for contributions to approved Scholarship-Granting Organizations (SGOs), nonprofits that provide private school scholarships. There is no limit on the dollar amount of the tax credit donors can claim, although the total amount of tax credits awarded statewide is limited to $18.5 million.

We do not administer this program.

Eligibility Test Apply

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  • 11,405

    Scholarships Awarded (2022–2023)

  • 98%

    of Families with Children Income-eligible Statewide

  • 5

    Scholarship Organizations (2022–2023)

  • 381

    Schools Participating (2022–2023)

  • $2,054

    Average Scholarship Value (2022-23)

  • 18%

    Value as a Percentage of Public School Per-student Total Spending

Indiana’s School Scholarship Tax Credit Participation

Students Participating
School Year Ending
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Student Funding

Use of Funds

Qualifying expenses include tuition and expenses.

Funding Amount and Source

Charitable donations made to SGOs fund the scholarships. Individuals and corporations may receive 50% tax credits for their donations to SGOs. SGOs determine scholarship amounts. Total credits claimed cannot exceed $18.5 million, meaning roughly 9,000 students can participate, or less than 1% of Indiana’s K–12 student population. The tax credits are not refundable.

(Last updated July 3, 2024)

Student Eligibility

About 98% of Indiana students are eligible for a scholarship. Children are eligible to receive scholarships if their family income does not exceed 400% of the guidelines needed to qualify for the federal Free and Reduced-Price Lunch (FRL) program ($220,000 for a family of four in 2024–2025). Children must be between ages 4 and 21 to participate. Current private school students qualify.

(Last updated July 22, 2024)

EdChoice Expert Feedback

Indiana’s tax-credit scholarship program helps thousands of low- and middle-income students access schools that are the right fit for them, but policymakers could do more to expand educational opportunity.  Eligibility for the scholarships was expanded in the 2023 budget to 400 percent of the federal poverty line (about $222,000, for a family of four in 2023–24). About 98 percent of Indiana students are eligible for a scholarship and approximately five percent of students statewide participate in one of Indiana’s private educational choice options (including the Choice Scholarship Program and the Education Scholarship Account Program).  The average scholarship size is about $2,000, which is only 18 percent of the average expenditure per student at Indiana’s district schools. Tax credits are worth 50 percent of the value of the contributions to scholarship organizations. Only $18.5 million in tax credits are available annually, which is equivalent to only 0.2 percent of Indiana’s total K–12 spending.   To expand access to educational choice, Indiana policymakers should dramatically increase the available tax credits and expand eligibility to all students. The program could also be converted into an education savings account to ensure that all students have access to the education that’s the right fit for them, whether private school or a customized course of education.  Indiana’s tax-credit scholarship program generally avoids unnecessary and counterproductive regulations.  (Last updated December 18, 2023) 

Rules and Regulations

Program Guidelines

  • Income Limit: 400% x FRL
  • Prior Year Public School Requirement: None
  • Enrollment Cap: None
  • Budget: $18.5 million
  • Scholarship Cap: Full tuition
  • Testing Mandates: Nationally norm-referenced or state tests
  • Credit Value: 50%
  • Per Donor Credit Cap: None
  • Special Needs Pathway: None

Participant and Families Guidelines

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

Education Provider Guidelines

  • Accreditation/Approval: State or regional
  • Nondiscrimination: Federal
  • Financial: N/A
  • Miscellaneous: N/A

Scholarship Organization Guidelines

  • Scholarship to Contribution Ratio: Use at least 90% of contributions for scholarships
  • State Reporting: Annual
  • Financial: Independent audit
  • Award Priority: N/A
  • Miscellaneous:
    • Be certified by the state
    • Make scholarships available for more than one school
    • Conduct criminal background checks on all SGO employees and board members

(Last updated September 12, 2024)

Governing Statutes

Ind. Code §§ 6-3.1-30.5 and 20-51-1  

(Last updated September 20, 2024)