Tax Credit Scholarship: A true win-win

Families with school-age children won a significant victory earlier this year when the Oklahoma Legislature approved the use of state income tax credits to help with education costs.

Beginning in 2024, the Parental Choice Tax Credit Act will offer refundable tax credits ranging from $7,500 to $5,000 per child, depending on family income. This will be a boon for parents of children in Catholic school.

Yet while this new law presents a wonderful opportunity for families with school-age children, a long-established law continues to provide a great benefit for donors who support Catholic schools.

The Oklahoma Equal Opportunity Education Scholarship Act, in effect since 2011, allows Oklahomans to receive state income tax credits for gifts to the Tax Credit Scholarship (TCS) program. TCS directly benefits the 15 Catholic grade schools and three Catholic high schools in the archdiocese.

Couples who give to TCS receive up to 75% of their gift back in a state income tax credit if they make a two-year pledge. Here’s an example:

Jane and Bob Smith pledge $2,000 to TCS this year and $2,000 next year. For doing so, they will receive a $1,500 state tax credit for 2023 and another $1,500 credit for 2024.

Because it reduces the amount of state income tax owed for the year, the credit is much more beneficial than a tax deduction.

Qualified business owners -- those with an LLC, S-Corp, C-Corp, etc. -- can receive up to $100,000 per year in a state tax credit by giving to TCS (yes that’s correct).

During 2022, the TCS program raised $2 million. Those funds will help more than 500 children attend Catholic schools in this new school year. The $2 million total means donors received $1.5 million back in state income tax credits.

The TCS program complements the Parental Choice Tax Credit Act, and it’s a true win-win: Donors benefit significantly, as do families who want a Catholic school education for their children.

A goal is to see gifts to TCS increase beyond $2 million this year and keep growing thereafter. To learn more about the program, visit tcsok.org or call (405) 709-2700.

Owen Canfield is director of the Tax Credit Scholarship program.