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Bill

H 1

TAXATION – Adds to existing law to establish the Idaho Parental Choice Tax Credit.

68th Legislature, 1st Regular Session (2025) Introduced by Clint Hostetler

Creates a refundable Idaho Parental Choice Tax Credit up to $9,500 per qualifying child to offset nonpublic/learning-pod education costs, capped at $250 million annually.

Reported Printed; Filed in the Office of the Chief Clerk
#education #parents #schoolsandschooldistricts #students #taxandtaxation #income
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Bill Summary · H 1

Summary: Idaho House Bill 1 (H 1) – Idaho Parental Choice Tax Credit

Purpose and intent

  • Establishes a refundable Idaho Parental Choice Tax Credit to help parents and guardians offset education expenses for eligible children who are not enrolled in public schools. The legislation emphasizes parental choice and reducing the financial burden of private, micro-school, or learning pod educational options.

Key provisions

  • Credit amount: A refundable tax credit up to $9,500 per qualifying child, for tax year 2025 and subsequent years.
  • Qualifying child: A child aged 5 to 18 (or up to 19 if they would have qualified under another Idaho provision), who is a full-time Idaho resident and not graduated from high school or earned a GED, and who is properly claimed on the parent’s full-time Idaho resident individual income tax return.
  • Qualified expenses: Education-related costs incurred while the child was not enrolled in a public school, including:
    • K-12 tuition and fees for attendance at a nonpublic school (including online or hybrid formats) and micro-schools/learning pods
    • Tutoring and preparatory courses for college or national assessments (e.g., AP tests)
    • Textbooks, curricula, and other educational materials
    • Transportation costs to receive instruction (including private vehicle mileage at the state employee travel rate, public transit, and ridesharing)
    • Any other reasonably related K-12 instructional expenses
  • Claiming the credit:
    • The credit is claimed on the parent's Idaho individual income tax return and may be claimed for each qualifying child.
    • Maintain receipts/invoices for qualified expenses and provide upon request.
    • If more than one parent claims for the same child, a tie-breaking rule from existing law applies.
    • If expenses exceed qualifying limits, the credit is still refundable to the extent permitted.
  • Administrative controls: Idaho State Tax Commission to issue claiming forms, audit compliance, and recapture credits for ineligible expenditures. Credits must be verifiable by receipts; the Commission will publish, weekly if possible, the cumulative credits claimed until the annual cap is reached.
  • Cap and timing: The total credits authorized cannot exceed $250 million in any tax year. If demand surpasses the cap, credits are allocated on a first-come, first-served basis with no liability to the state for unawarded credits. The legislature will annually review whether to increase the cap.
  • Nonpublic school relationship to government: Nonpublic schools accepting credits are not state agents and are not required to alter creed, admissions policies, or curriculum.
  • Retroactivity and emergency provision: The bill states retroactive application and an emergency designation, indicating intended immediate effect and applicability to the current tax year(s).

Who is affected

  • Parents/guardians of qualifying children who are not enrolled in public schools (including those using private schools, microschools, or learning pods) and Idaho taxpayers who claim the credit on their state income tax returns.

Fiscal and implementation notes

  • Fiscal impact: Up to $250 million per year if fully subscribed; first-year estimate around $105 million. No additional state Tax Commission FTE requested.
  • Administration: Tax Commission audits and receipts retention; forms prescribed; real-time-like online reporting of credits.

Status

  • Introduced January 8, 2025; Reported Printed and filed January 9, 2025; primary sponsor: Rep. Clint Hostetler.

Compiled from official sources — confirm details with the bill’s official record.

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