KSDE briefing outlines tax-credit scholarship rules, limits and verification gaps

Dr. Frank Harwood, a Kansas State Department of Education official, told the State Board of Education on Oct. 14 that the state''s tax-credit scholarship program gives donors a credit against Kansas tax liability but does not create a direct stream of state-appropriated funds. "The tax credit for low income student scholarship program provides a 75% nonrefundable tax credit for up to $500,000 of donations annually," Harwood said during a presentation to the board.

Harwood summarized how the program works and where KSDE and the State Board have responsibilities: eligible taxpayers donate to a scholarship-granting organization (SGO), the SGO distributes scholarships to eligible students at participating qualified schools, and the Department certifies SGOs, collects annual audit reports from them and notifies the Kansas Director of Taxation about compliance. Harwood said SGOs must distribute 90% of contributions within 36 months and must submit an annual CPA audit.

The program''s statutory eligibility and limits have changed several times since its 2014 start. Harwood…