Low-Income Corporate Income Tax Credit Scholarship Program

All students who receive scholarships under this program must come from families whose household incomes are equal to or below 185% of the federal Free and Reduced-Price Lunch program (FRL) guideline ($106,782 for a family of four in 2024-2025). Additionally, students must either be (1) enrolling or enrolled in private school kindergarten; (2) enrolled in a private preschool program for students with disabilities. Pre-kindergarten students must have a Multidisciplinary Evaluation Team or IEP, 504 plans do not qualify; (3) a public school enrollee for at least 90 days in the previous fiscal year or one full semester of the current school year; (4) a dependent of an active-duty member of the military stationed in Arizona; (5) homeschooled before enrolling in a qualified school; (6) moved into Arizona from another state or country and transferred directly into an Arizona private school; or (7) a prior scholarship recipient under this program, the individual tax-credit scholarship program, or the switcher tax-credit scholarship program and the child continued to attend a private school in subsequent years. A student may not participate in the Empowerment Scholarship Account (ESA) program and receive a tax-credit award. A previous participant in the ESA program who meets the income requirements may elect to receive a tax-credit award instead of continuing in the ESA program. Students may receive multiple tax-credit scholarship awards or receive awards from multiple tax credit scholarship programs as eligible. _(Last updated July 15, 2024)_

Awarded funds from the low-income corporate credit can be used to pay the cost of attending a private school full-time in Arizona. _(Last updated July 15, 2024)_

Private donors fund this program by donating to STOs and receiving tax credits for their donation, up to certain limits. Each STO determines the number of scholarships it distributes. Scholarships were capped at $6,300 in grades K–8 and $8,100 in grades 9–12 for 2024–5024. Those amounts increase annually by $200. Corporate taxpayers who contribute to STOs may claim a tax credit equal to the full amount of their contribution. Donation pre-approval is required. Tax credits are worth 100% of the value of the contributions to scholarship organizations. Total credits claimed cannot exceed $135 million, meaning roughly 35,000 students can participate, or less than 3% of Arizona’s K–12 student population. _(Last updated July 15, 2024)_

On March 12, 2009, the Arizona Court of Appeals upheld Arizona’s corporate tax-credit scholarships and the Arizona Supreme Court refused to hear an appeal. _Green v. Garriott_ , 212 P.3d 96 (Ariz. App. 2009). _(Last updated July 15, 2024)_