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Corporate Tax Credit Scholarship Program FAQs
Definition and Eligibility
- What is the Corporate Tax Credit Scholarship Program?
The Corporate Tax Credit Scholarship Program (CTC) was established in 2001 to provide an income tax credit for corporations that contribute money to nonprofit Scholarship-Funding Organizations (SFOs) that award scholarships to students from families with limited financial resources. The purpose of the tax credit is to:- Encourage private, voluntary contributions to nonprofit SFOs;
- Expand education opportunities for children from families that have limited financial resources; and
- Enable children to achieve a greater level of excellence in their education.
- Who is eligible for a scholarship from a nonprofit scholarship-funding organization under this program?
A student is eligible for a scholarship from a nonprofit SFO through this program, if the student qualifies for free or reduced-price school lunches under the National School Lunch Act and:
- Was counted as a full-time student during the previous state fiscal year for purposes of state per-student funding; or
- Received a scholarship from an eligible nonprofit scholarship-funding organization or the state of Florida during the previous school year; or
- Is eligible to enter kindergarten or first grade; or
- Is currently placed, or during the previous fiscal year was placed, in foster care.
- What are my responsibilities as the parent of a Corporate Tax Credit Scholarship recipient?
The parent of an eligible scholarship student must:- Select an eligible private school and apply for the admission of his or her child;
- Inform the child's school district when the parent withdraws his or her child to attend an eligible private school within 15 days of that decision;
- Ensure the scholarship student remains in attendance throughout the school year unless excused by the school for illness or other good cause;
- Ensure that the student participating in the scholarship program takes the norm-referenced assessment offered by the private school.
- If desired, request from the school district for the student to take the statewide assessment pursuant to s. 1008.22, F.S., and provide transportation to the test site designated by the district;
- Restrictively endorse the scholarship payment to the private school for deposit into the account of the private school.
Additional parent FAQs related to the Corporate Tax Credit Scholarship Program are available on the Scholarship Funding website at http://www.scholarshipfunding.org/faqs.php.
Scholarship Awards and Payments
- What is the maximum award amount of a Corporate Tax Credit Scholarship?
The amount of the scholarship provided to any child for any single school year by all eligible nonprofit SFOs must not exceed the following limits:
- $3,950 for a scholarship awarded to a student for enrollment in an eligible private school; or
- $500 for a scholarship awarded to a student for enrollment in a Florida public school that is located outside the district in which the student resides.
- What types of expenses are covered by the scholarships?
Eligible nonprofit SFOs must provide scholarships, from eligible contributions, to qualified students for the following expenses:
- Tuition and fees for an eligible private school or
- Transportation to a Florida public school that is located outside the district in which the student resides.
- How is a scholarship payment made?
The payment will be made by check payable to the student’s parent. If the parent chooses for his or her child to attend an eligible private school, the check must be mailed by the eligible SFO to the private school of the parent’s choice, and the parent must restrictively endorse the check to the private school.
The SFO must ensure that the parent endorses the check to the private school of the parent’s choice for deposit into the account of the private school.
Scholarship Funding Organizations
- What are eligible nonprofit scholarship-funding organizations?
Eligible nonprofit SFOs are charitable organizations that are exempt from the federal income tax as defined in s. 501(c)(3) of the Internal Revenue Code. Eligible nonprofit SFOs are required to meet the following criteria:- Provide scholarships from eligible contributions to qualified students;
- Give priority to qualified students who received a scholarship from an eligible SFO during the previous year;
- Expend for annual or partial-year scholarships an amount equal to or greater than 75% of the net eligible contributions remaining after administrative expenses during the state fiscal year in which the contributions are collected;
- May use up to 3% of eligible contributions for administrative expenses if the SFO has operated for the lease 3 state fiscal years without negative financial findings; and
- Provide the Auditor General and the Department of Education with an annual financial and compliance audit of their accounts and records conducted by independent certified public accountants.
- Who is responsible for administering the Corporate Tax Credit Scholarship Program?
The Department of Revenue (DOR) and the Department of Education (DOE) cooperatively administer the Corporate Tax Credit Scholarship Program.The DOE is responsible for adopting rules necessary to determine the eligibility of SFOs and identifying students eligible to participate in the program. The DOE is also responsible for submitting annually, by March 15, a list of eligible SFOs to the DOR.
The DOE must annually verify:
- The eligibility of nonprofit scholarship-funding organizations;
- The eligibility of private schools; and
- The eligibility of expenditures.
The DOR is responsible for adopting rules to administer the Corporate Tax Credit Scholarship Program, including:- Establishing application forms and procedures; and
- Governing the allocation of tax credits and carry forward credits for the program on a first-come, first-served basis.