Arkansas

Philanthropic Investment in Arkansas Kids Scholarship Program

  • Tax-Credit Scholarship
  • Enacted 2021
  • Launched 2022

Arkansas’s Philanthropic Investment in Arkansas Kids Scholarship Program allows individuals and corporations to claim a 100% tax credit for contributions to approved Scholarship-Granting Organizations (SGOs), nonprofits that provide private school scholarships to students from families falling below 200% of the Federal Poverty Level.

We do not administer this program.

Eligibility Test Apply

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  • 2nd

    Arkansas’s Second School Choice Program

  • 48%

    of Families Income Eligible Statewide

  • 24%

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

Percentage of students eligible for the Philanthropic Investment in Arkansas Kids Scholarship Program

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Student Funding

Use of Funds

Scholarships fund tuition and fees at participating private schools throughout Arkansas.

Funding Amount and Source

Scholarship amounts are based on a percentage of the student base funding, varied by grade level. Scholarships cannot exceed 80% of Arkansas’s foundation funding ($7,618 in 2023–2024) for students in K–8 or 90% of Arkansas’s foundation funding ($6,316 in 2020–2021) for high school students in grades 9–12. Tax credits are worth 100% of the value of the contribution to Scholarship Granting Organization, making them a great value to donors. Program participation is limited by the budget provided for funding. Total credits claimed cannot exceed $6.95 million, meaning roughly 1,200 students can participate, or less than 1% of Arkansas’ K–12 student population.

(Last updated July 15, 2024)

Student Eligibility

Student participation is limited to Arkansas residents eligible to attend a public school from a family earning up to 200% of the Federal Poverty Level or FPL ($62,400 for a family of four in 2024-2025). Students must be currently enrolled in a public school or have attended a public school during the previous school year during the initial application, or they must be starting school for the first time in the state of Arkansas. Previous scholarship recipients also remain eligible to apply. If a student was previously enrolled in another state and was enrolled in an Arkansas private school for less than half the academic year for which their family is applying for a scholarship, they may also be eligible.

(Last updated July 15, 2024)

EdChoice Expert Feedback

Arkansas’s tax-credit scholarship program has the potential to help hundreds of students access schools that are the right fit for them, but policymakers could do much more to expand educational opportunity.  Eligibility for the scholarships is limited to public school students from families earning up to 200 percent of the federal poverty line, making it one of the more restrictive means-tested educational choice programs in the nation. About half of Arkansas students are eligible for a scholarship.   Average scholarship amounts are relatively high, funded at 80 and 90 percent, respectively, of Arkansas’s base student funding depending on grade level. Tax credits are worth 100 percent of the value of the contributions to scholarship organizations, which should help promote donations. Policymakers took a positive step by expanding the budget cap as part of 2023 Learns Act, however, only $6 million in tax credits are available annually, which is less than 0.01 percent of Arkansas’s total K–12 revenue. The tax credit cap automatically increases by 5 percent each year if at least 90 percent of the cap was reached in the previous year.  To expand access to educational choice, Arkansas policymakers should dramatically increase the available tax credits and expand eligibility to all students (prioritizing scholarships based on need). 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.  Arkansas’s tax-credit scholarship program generally avoids unnecessary and counterproductive regulations.  (Last updated December 18, 2023) 

Rules and Regulations

Provider Guidelines

  • Income Limit: 200% x FPL
  • Prior Year Public School Requirement: Yes, With Exceptions
  • Geographic Limit: Statewide
  • Enrollment Cap: None
  • Scholarship Cap: $6,217 (K–8) / $6,994 (9–12)
  • Testing Mandates: Nationally norm-referenced tests
  • Credit Value: 100%
  • Per Donor Credit Cap: Tax Liability; Carryover to next-succeeding taxable year, up to 3 years
  • Budget Cap: $6 Million (Escalator)

SGO Requirements

  • Provide credit donation receipts to donors as well as the Arkansas Department of Finance upon request
  • Ensure first-time recipients of scholarships were not continuously enrolled in an Arkansas private school the previous school year
  • Conduct background checks for all employees
  • Distribute eligible contributions within three years of receipt
  • Post a surety bond or otherwise demonstrate fiscal solvency if receive more than $50,000 in donations in a given year
  • Report to the state data on scholarship distributions and students’ school districts of residence
  • Ensure that participating private schools:
    • Comply with all state health and safety regulations
    • Comply with municipal building occupancy rules
    • Administer a nationally norm-referenced test for scholarship students in grades 3–10 and report student results to parents as well as state researchers

(Last updated July 15, 2024)

Governing Statutes

Ark. Code Ann. §§ 6-18-2301 through 2308

(Last updated July 15, 2024)