Idaho's Parental Choice Tax Credit in Plain English: Who Qualifies, What It Pays and How It Works

Most states with school choice money put it in an account or send it to a school. Idaho does it differently. The Idaho Parental Choice Tax Credit pays parents back through the state income tax system for certain education costs they paid themselves. If you homeschool, use a microschool or pay private school tuition, it is the one statewide program in Idaho right now that can put real money back in your pocket. Here is how it works, without the political noise.

Where it came from

The Legislature created the credit with House Bill 93 in 2025, and it was signed February 27, 2025. It lives in Idaho Code 63-3029N. In 2026 the Legislature changed it with House Bill 934, signed April 2, 2026 and retroactive to January 1, 2026. The Idaho State Tax Commission runs the program, and the state's official program site is My School Choice. On February 5, 2026, the Idaho Supreme Court turned away a constitutional challenge, so the program is in place.

The program in six lines

• Amount: up to $5,000 per eligible child for the 2026 tax year, or up to $7,500 for a child with a disability who requires ancillary personnel.
• Who: full-year Idaho resident parents, legal guardians and licensed foster parents of children age 5 to 18 during the tax year (5 to 21 with a qualifying disability), claimed as dependents on the parent's Idaho return.
• Income limit: none for the credit itself. The advance payment option is only for lower-income families.
• Statewide cap: $50 million in credits per tax year, first come, first served within priority groups.
• Next window: January 15 to March 15, 2027, for the 2026 credit or an advance payment awarded in 2027.
• Tax treatment: the law says the credit and the advance payment are not Idaho taxable income.

The key point: apply first, claim second

This is not a credit you simply write onto your tax return. You have to apply during the window and be approved before you can claim it. The Tax Commission says a credit claimed without an approved application won't be allowed, and the law says the state has no liability to a parent who claims it that way.

Approval is also not a blessing of your purchases. The Tax Commission says an award is permission to claim up to the awarded amount. It does not pre-approve your expenses, and everyone is subject to audit. You keep the paid receipts; they decide later whether the costs qualify.

Two ways the money reaches you

For each child, each year, you pick one of two routes.

The tax credit. You pay for qualifying costs during the calendar year, apply in the January to March window that follows, and if approved, claim the credit on that year's Idaho Form 40. Because it is refundable, you get the full approved amount even if it is more than the Idaho tax you owe. So the window opening January 15, 2027 is for costs you paid during 2026.

The advance payment. Families whose modified adjusted gross income is at or below 300 percent of the federal poverty level can ask for the money up front instead. It is paid once, to your bank account, within 60 days of the award notice and no later than August 30. You then match it to paid receipts and repay anything you can't document. A child can get an advance only once in their whole K-12 career, and not after they've already received a credit. We cover the details in a separate article on the advance payment.

Who gets funded first

The pool is capped, so order matters. In 2026, parents at or below 300 percent of the federal poverty level came first. Starting with the 2027 application period, the amended law gives first priority to parents who received a credit the year before, then parents whose taxable income is at or below 300 percent of the poverty level, then everyone else in the order applications arrive. The Tax Commission keeps a waiting list. If the cap isn't reached after the first window, the law says the Tax Commission must reopen applications until August 15 or until the money runs out.

What it pays for, in short

The list in the law is narrow. On the Tax Commission's page, the core is tuition at a nonpublic school, or a curriculum covering at least English language arts, math, science and social studies. Then textbooks, tutoring in those four core subjects, certain tests and test prep, and reasonable transportation to and from the place of instruction. Extracurricular activities, a parent's own teaching, uniforms, vacations, vehicles and electronics like gaming computers are out. Our full breakdown is in the qualifying expenses article, and the official expense list is short enough to read in two minutes.

How 2026 went

The first window ran January 15 to March 15, 2026. According to a May 19, 2026 Tax Commission release, it drew 6,069 applications for 10,809 students, and the agency awarded $33.4 million in credits and $8.84 million in advance payments. With more than $7 million left, the Tax Commission reopened applications May 21. That second window closed July 17, 2026, because the program had reached its nearly $50 million limit. By the Tax Commission's final figures, $37.7 million in credits and