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Adds new section 36C to Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code establishing a refundable credit for elementary and secondary education expenses, including definitions, per‑child credit cap, AGI phaseout rules, qualified expense categories, definition of qualified educational institution, and an adjustment for Coverdell savings account distributions.
Amends paragraph (2) of section 1324(b) of title 31, United States Code, by inserting additional text (insertion text not provided in the section excerpt).
Creates a new refundable federal income tax credit to help families pay elementary and secondary education expenses for each qualifying child. The credit is capped per child and phases out for higher‑income households. The bill defines who counts as a qualifying child and which K–12 expenses are eligible or ineligible. It coordinates with Coverdell Education Savings Accounts so families don’t receive a double benefit. Findings emphasize that parents should be able to choose the school—public or private—that best serves their child. The credit applies to tax years beginning after enactment.
Private schools supplement the public school system and are a vital component of the Nation’s school network.
The public school system was created to serve students. Children should have the opportunity to attend the school that best develops their abilities, and parents have the right to choose the public or private school that best meets their child’s individual needs.
Creates a new section 36C in subpart C of part IV of subchapter A of the Internal Revenue Code to allow a refundable credit for elementary and secondary education expenses paid by an individual for each qualifying child.
Allows a credit against tax for the qualified education expenses paid by the taxpayer during the taxable year for each qualifying child of the taxpayer.
Limits the credit for each qualifying child to not more than $10,000 for any taxable year.
Families with school‑age children gain direct financial help for eligible K–12 education costs, with the strongest benefits going to low‑ and moderate‑income households because the credit is refundable and phases out at higher incomes. Parents may have more flexibility to pursue the schooling option that fits their child’s needs, whether public or private, depending on which expenses qualify. Students benefit indirectly as families can better afford eligible educational supports. Households using Coverdell ESAs must coordinate benefits because the credit is reduced for expenses paid with ESA distributions. Schools (public and private) may see modest enrollment or spending shifts as families respond to the new incentive. The IRS will need to implement new forms and guidance, and taxpayers will need to keep records of eligible expenses.
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Referred to the House Committee on Ways and Means.
Introduced March 14, 2025 by Christopher Henry Smith · Last progress March 14, 2025
Referred to the House Committee on Ways and Means.
Introduced in House