South Carolina mandates eligibility criteria for school tax credit claims

On February 4, 2025, South Carolina lawmakers introduced Senate Bill 306, a significant piece of legislation aimed at reshaping the state's educational landscape by providing tax credits for families who choose to withdraw their children from public schools in favor of private or home schooling. This bill seeks to address growing concerns about educational choice and funding within the state.

The primary provision of Senate Bill 306 allows taxpayers to claim a tax credit if their child attends a qualifying private or parochial school or is homeschooled. However, the bill stipulates that families are ineligible for this credit if their child has attended a public school for more than 44 days during the current tax year. This provision aims to encourage families to transition away from public education, which proponents argue will foster competition and improve educational outcomes.

Notably, the bill includes strict penalties for fraudulent claims, categorizing such actions as tax fraud, which will be prosecuted under existing laws. Additionally, it empowers parents to seek legal recourse for violations of the bill, allowing them to claim compensatory damages and attorney's fees if their rights under the legislation are infringed upon.

The financial implications of the bill are significant. For each student who leaves public school for a private or home school, the state will reduce its State Aid to Classrooms funding by increasing amounts over the next several years, starting with a $2,000 reduction in the 2025-2026 school year and escalating to $8,500 by the 2028-2029 school year. This gradual decrease raises concerns among public school advocates about potential funding shortfalls and the impact on educational resources for remaining students.

Debate surrounding Senate Bill 306 has been intense. Supporters argue that it promotes parental choice and educational freedom, while opponents warn that it could undermine public schools by diverting essential funding and resources. Critics also express concerns about the potential for increased inequality in educational access, as families with fewer financial resources may struggle to afford private schooling despite the tax credits.

As the bill moves through the legislative process, its future remains uncertain. Education experts suggest that if passed, it could lead to a significant shift in how education is funded and delivered in South Carolina, potentially setting a precedent for similar legislation in other states. The outcome of this bill will likely resonate beyond the immediate educational community, affecting families, educators, and policymakers across the state.