HB 23-1079

House Bill 23-1079, which has been signed into law, provides tax credits for Colorado residents who send their children to private schools or homeschool them. If a child attends private school full-time, the credit is equal to either the tuition paid or up to 60% of the state’s average per pupil funding from the previous year, whichever is less. For part-time attendance and homeschooling, the credits are smaller. The law also offers tax credits for parents who choose to homeschool their children who previously attended public school full- or part-time. These credits can be used over three years but cannot be refunded directly in cash. This bill benefits families choosing private education or homeschooling by reducing their state income taxes.

Official Summary

The bill establishes a private school tuition income tax credit for income tax years commencing on or after January 1, 2024, that allows any taxpayer to claim a credit when the taxpayer enrolls a qualified child in a private school or the taxpayer provides a scholarship to a qualified child for enrollment in a private school. The private school issues the taxpayer a credit certificate and the amount of the credit is: For full-time attendance, an amount equal to either the tuition paid or the scholarship provided to a qualified child, as applicable, or 60% of the previous year's state average per pupil revenues, whichever is less; and For half-time attendance, an amount equal to either the tuition paid or the scholarship provided to a qualified child, as applicable, or 30% of the previous year's state average per pupil revenues, whichever is less. The bill also establishes an income tax credit for income tax years commencing on or after January 1, 2024, that allows any taxpayer who uses home-based education for a qualified child to claim an income tax credit in an amount equal to: 40% of the previous year's state average per pupil revenues for a taxpayer who uses home-based education for a qualified child who was enrolled on a full-time basis in a public school in the state prior to being taught at home; and 20% of the previous year's state average per pupil revenues for a taxpayer who uses home-based education for a qualified child who was enrolled on a half-time basis in a public school in the state prior to being taught at home. Both credits may be carried forward for 3 years but may not be refunded. In addition, the credits may be transferred, subject to certain limitations. (Note: This summary applies to this bill as introduced.)