Education Improvement Scholarships Tax Credits Program
The Education Improvement Scholarships Tax Credits Program (EISTCP) provides state tax credits for persons or businesses making monetary or marketable securities donations to approved scholarship foundations that provide scholarships to eligible students for qualified educational expenses incurred in attending eligible nonpublic schools in Virginia.
- Sections 58.1-439.25-28 of the Code of Virginia
- Guidelines for the Education Improvement Scholarships Tax Credits Program (PDF) – Effective October 20, 2017
- EISTCP Instructional Presentation (PPT) – Presentation slides that provide additional guidance for administering the program, including examples of how scholarship funds should be disbursed (Revised August 1, 2017)
To be eligible for participation in the EISTCP, scholarship foundations must apply to VDOE to be approved to receive and administer tax credit-approved funds. Any donations that are made prior to the date the application is approved by VDOE will not qualify for the tax credit. For more information, go to Scholarship Foundation Qualifications & Reporting Requirements.
- Application for Approval as a Scholarship Foundation (Word) Fillable Form – Organizations must use this application form to be approved as a scholarship foundation under the EISTC program
- Approved Scholarship Foundations (XLS) – Revised October 27, 2017 – List of scholarship foundations eligible to receive tax credit-derived donations
To be eligible for a tax credit, donors must be preauthorized by VDOE before the donation is made. The tax credit is equal to 65 percent of the monetary or marketable securities donation, and may be claimed against the individual income tax, corporate income tax, bank franchise tax, insurance premiums license tax, or tax on public service corporations. Tax credits issued by VDOE may be claimed for the taxable year in which the donation was made to a qualified scholarship foundation. Any unused tax credits may be carried over for the next five succeeding taxable years or until the total amount of the credit has been taken, whichever is sooner. The total amount of tax credits that may be issued in each program year (i.e., state fiscal year) is $25 million. For more information, go to Qualified Donations & the Tax Credit Approval Process.
- Preauthorization Request Form (Word) Fillable Form – Use this form to request preauthorization for a specified tax credit amount.
- Summary of Preauthorized Tax Credits-This is a Word documen – Revised October 27, 2017
Education Expenses Scholarships
An approved scholarship foundation is required to disburse at least 90 percent of the tax credit-derived donations it receives between July 1 and June 30, by the immediately following June 30, in the form of scholarships for qualified education expenses to eligible students attending a non-public school in Virginia. The maximum amount of scholarships to an eligible student for any single school year by all eligible scholarship foundations from tax credit-derived donations may not exceed the lesser of: (i) the actual qualified educational expenses of the student, or (ii) 100 percent of the per pupil amount distributed to the school division (in which the student resides) as the state's share of the Standards of Quality (SOQ) costs. In addition, the law requires that a scholarship foundation must provide scholarships to students at more than one non-public school in Virginia, scholarships must be paid in quarterly or semester installments, and scholarships must be portable. For more information, go to Student Eligibility & Education Expenses Scholarships.
- The following links provide information related to the requirements referenced in § 58.1-439.25 and § 58.1-439.28 (C, E, and G) of the Code of Virginia.
- 2016 Federal Poverty Guidelines
- 2017 Federal Poverty Guidelines
- Scholarship Limits for Scholarships Awarded for the Program Year 2015-2016 (Word)
- Scholarship Limits for Scholarships Awarded for the Program Year 2016-2017 (PDF)
- Scholarship Limits for Scholarships Awarded for the Program Year 2017-2018 (PDF)
- Reports to the Chairmen of the House and Senate Finance Committees on Scholarships Awarded
Eligible Private Schools
A private school in Virginia may participate in the EISTCP, provided it meets the following requirements:
- complies with the Commonwealth's and locality's health and safety laws and codes;
- holds a valid occupancy permit as required by the locality;
- complies with Title VI of the Civil Rights Act of 1964, as amended; and
- complies with nonpublic school accreditation requirements as set forth in Section 22.1-19 of the Code of Virginia, and administered by the Virginia Council for Private Education (VCPE) or is a nonpublic school that maintains an assessment system that annually measures scholarship students’ progress in reading and math using a national norm-referenced achievement test including, but not limited to, the Stanford Achievement Test, California Achievement Test, and Iowa Test of Basic Skills. Any other achievements tests used for this purpose must have been developed using a norm group that is representative of the United States.
- Virginia Council for Private Education (VCPE)
- List of Norm-referenced Achievement Tests-This is a Word document. – List of achievement tests that are norm-referenced, and a list of achievement tests that are not considered norm-referenced.
- Student Achievement Test Results-This is a Word document. – Information related to the requirements referenced in § 58.1-439.28.D of the Code of Virginia.
For more information, go to Student Achievement Testing Requirements.
Tax Credit Programs