Idaho Tax Credit Subsidizing Private School is Law: What You Need to Know

Idahoan parents with children enrolled in a private or homeschool may be eligible for a new refundable tax credit this year.

Idaho Gov. Brad Little signed the Parental Choice Tax Credit program into law on Feb. 28, which would provide up to $5,000 per K-12 student for certain expenses related to the education, including tuition and fees for enrollment. For tax year 2025 and subsequent years, families with children aged 5 to 21 with disabilities would be eligible for up to $7,500.

The $50 million measure is designed to provide “even more abundant schooling options for Idaho students and families,” Little said in a press release, adding that the state recently contributed close to $17 billion into its K-12 public school system and increased public funding approximately 60% in the last few years.

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“Idaho can have it all – strong public schools AND education freedom,” added Little.

The bill passed in a Senate vote of 20-15, despite facing a flood of opposition from public school advocates and government officials.

Of note, President Donald Trump endorsed the measure saying it would provide the “very best education for their child.”

Some opponents raised concerns that subsidizing private schooling would impact public school funding in rural areas, while others argue it is unconstitutional because it supports directing taxpayer money to religious schools.

Here’s what you need to know about Idaho’s first educational choice program.

Parental Choice Tax Credit: Who's eligible?

All Idaho residents between the ages of five and 18 can participate in the Parental Choice Tax Credit program. Students who have a disability are eligible through age 21.

• For tax year 2025, the program will prioritize applicants with a modified gross income at or below 300% of the federal poverty level — $93,600 annually for a family of four.
• In 2027, priority will be given to parents who received the credit in the first two years of the program, followed by applicants with incomes below the mentioned threshold.

Does that mean there’s an income limit? No, there is no income limit to claim this credit. Only that priority will be given first to applicants at or under 300% of the federal poverty line.

Your child doesn’t have to be a former public school student to be able to apply for this credit, either.

What expenses will the credit cover?

Idaho’s Parental Choice Tax Credit will cover out-of-pocket qualifying expenses related to your child’s education in a non-public school. Specifically, these expenses include tuition and fees for enrollment at a private school, microschool, or learning pod — also known as homeschooling.

Academic instruction may be given in person, online, virtually, or via a combination of all the mentioned options, according to the legislation.

Other eligible expenses include:

• Tutoring
• National standardized test assessments
• Assessments used to determine college admission
• Industry-recognized certification exams
• Preparatory courses for standardized assessments, also known as “college-prep”

It also includes the cost of textbooks, curricula, and transportation to a private school, microschool, or learning pod. For tuition and fees to qualify, the school must be accredited or a parent must provide evidence of the child’s academic progress. This includes proof that the child is being taught in English language arts, mathematics, science, and social studies.

As noted, parents cannot claim the credit for any semester in which their child was enrolled full-time or part-time in a public school, public charter school, public virtual charter school, public magnet school, or part-time public kindergarten.

Applications are open

The application period for Idaho’s latest education tax credit opened retroactively on January 15, and shall remain open through March 15.

To apply, you must have claimed each eligible student as a dependent on your state individual income tax return. You must also be the only parent claiming the credit for the child.

At the time of applying, parents or guardians may opt to receive a one-time advanced payment for the refundable credit per eligible student. The payment will be delivered within 60 days, according to government officials.

As mentioned, priority will be given to applicants with an adjusted gross income at or below 300% of the federal poverty level.

Education leaders say the move is “anti-public school”

The Idaho Education Association, the state’s teachers union, characterized the measure as a push by “anti-public school” lawmakers.

IEA members and other pro-public school education voters sent thousands of emails and letters in opposition of the bill, now turned law, that gives a tax credit to parents of private school students.

Local reports reveal that before the bill was introduced, Idaho's House Revenue and Taxation Committee had received more than 1,000 emails, with 94% opposing the voucher program.

In short, the measure is taxpayer money directed toward private schools.

“Voucher proponents—eager to help out-of-state billionaires plunder Idaho's public school budget—are already planning how to exploit and expand this program during 2026's legislative session,” IEA President Layne McInelly said in a statement. “Each year, they will try to siphon more and more tax dollars away from public schools as a gift to private and religious schools and their patrons.”

Sen. Kevin Cook (R-Idaho Falls), who serves on the Senate Local Government and Taxation Committee, said the funding system for the credit may likely impact more than education.

“When somebody says it won’t affect public schools— it will affect everything,” Cook said. “It will affect your roads, your schools, your bridges, everything that we do here at the State of Idaho. It will affect (it) because you’re taking that money away.”

Related:

• 12 Education Tax Credits and Deductions
• Idaho Tax Guide
• Child Tax Credit 2025: How Much Is It?