Oklahoma’s private school tax credits to launch Friday with influx of applicants expected

Editor’s note: The Oklahoma Tax Commission announced Thursday night the start of the private school tax credit application window is postponed until 2 p.m. Wednesday. Read more here.

OKLAHOMA CITY — About 130 private schools across Oklahoma have registered for a new tax credit program launching this week that offers $5,000-$7,500 to students’ families.

The Oklahoma Tax Commission will start accepting applications for the tax credits at 8:30 a.m. Friday at parentalchoice.ok.gov. 

Families can apply for their entire household but must submit a school-provided enrollment verification form for each student.

Merit International, the California-based company administering the program, expects a “big influx” of applications on day one, said Taimarie Adams, the company’s executive director of education grants and scholarships.

“We know Friday’s going to be a busy day,” Adams said. “We know families are excited, and I think we’re just preparing as best we can to get those applications processed very quickly and also answer questions.”

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The state allocated $150 million for the tax credits in 2024. The program reduces the tax  burden of families with children in private school by cutting checks to assist with costs of tuition, tutoring, textbooks and standardized testing fees.

Adams said Merit also will work on next year’s launch for Oklahoma’s homeschool tax credit program.

Funds for private school credits will be disbursed until the $150 million runs out. The total budget will grow to $200 million in 2025 and $250 million in 2026.

Taxpayers with yearly household earnings of $75,000 or below qualify for a $7,500 tax credit per student. A $7,000 credit per student is available to households with income between $75,001-$150,000. 

Families earning between $150,001-$225,000 would receive a $6,500 tax credit. Households with $225,001-$250,000 in yearly earnings qualify for $6,000 per child. A $5,000 tax credit is available for students whose household earns $250,000 or higher.

Priority consideration is reserved for households with an annual income of $150,000 or less and who apply by Feb. 1. Beyond that group, applicants are chosen on a first-come-first-served basis.

Families in the priority group can expect to hear back 14 days after they apply, Adams said.

“One of the things we’ve heard loud and clear from our partners in Oklahoma is we really want to make sure that this program is serving those families with the most financial need,” she said.

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After applications are approved, the Oklahoma Tax Commission will send checks to the students’ schools. The checks will be payable to the taxpayer who submitted the application. Taxpayers should either sign the check over to the school or collect it if they’ve already paid for tuition and fees, according to the Tax Commission’s guidance.

Although the program is yet to launch, state lawmakers already have said they intend to tweak it. Legislators have complained about a requirement that families apply by the tax year rather than by the school year.

Merit received a $3.95 million contract to administer the program with the Tax Commission. The company is providing similar services for education grant programs in Ohio and Kansas.

Adams said the core of each state’s program is verifying documents before sending out any money.

That process includes confirming students’ enrollment, the accreditation of their schools and any supplemental education service providers. 

Private schools must register for the program and certify they are accredited by the state or an approved accrediting agency. The program’s website shows 130 schools already have done so, and Adams said more registrations are underway.

The Tax Commission will use its own records to verify families’ yearly household income.

Failure to keep records and monitor spending afflicted Oklahoma’s previous effort to send money directly to families for their educational needs. State auditors found that recipients of a pandemic-era grant program spent $1.7 million in taxpayer funds on items unrelated to their children’s schooling.

Gov. Kevin Stitt and state Superintendent Ryan Walters have blamed the failure on ClassWallet, the Florida-based company that administered the program. However, Attorney General Gentner Drummond dropped a lawsuit against the company and said state actors could be at fault.

Multiple states started developing education grant or tax credit programs during the COVID-19 pandemic, Adams said. Although some states, like Arizona, have had similar initiatives for years, she said many of these programs are new and states are “learning as they go.”

“I think that states are learning from one another and sharing best practices, and I think the biggest mistake is not trying to course correct,” Adams said. “We’ve been lucky in the states we’re working with that you have really committed partners that just want to make this better and having those honest conversations about what went right and what went wrong.”