[The Autism Society of North Carolina now has a comprehensive fact sheet on HB 344 Education Tax Credit for Children with Disabilities on its website here.]
Thursday June 30th 2011 House Bill 344 Tax Credits for Children with Disabilities became law in North Carolina. Starting this year, families will be able to claim a tax credit for moving their child with a disability from a public school to a private school or home school setting. The Autism Society of North Carolina (ASNC) is already getting a lot of questions about the tax credit, how it will work and who will qualify. If you have questions that are not answered in the post below, please add them in the comments or contact Jennifer Mahan, Director of Government Relations at ASNC, at jmahan@autismsociety-nc.org .
Tax Credits for Children with Disabilities gives a $6,000 tax credit ($3,000 per semester) to families whose child with a disability moves from a public school to attending a private school or home school. To qualify for the credit, children must have been in a public school the previous two semesters or if in pre-school have been receiving special education services through the public school, have an individual education plan and have been receiving special education or related services on a daily basis. Children must be re-evaluated by the public schools every three years to continue to qualify for the credit. Children may qualify through high school, up to the age of 22; the credit does not count for college education.
In a unique arrangement, the legislation also establishes a special needs trust fund to be administered by the NC Department of Education to supplement funding for special education services in the public schools. Since the amount of the tax credit is less than the average cost of educating a child with a disability in public schools, the tax credit saves the state of North Carolina money. Part of these savings will be retained by the special needs trust, part will go back to the state of NC’s general fund and part will be used to fund the tax credit.
Because private schools are not required by law to provide educational services to children with disabilities, we urge parents to select private schools carefully. Make sure they understand your child’s unique needs and a ready to provide the support for them to be successful. Some private schools are already working with children on the spectrum. Check with other parents to see what their experiences have been like.
Frequently Asked Questions:
Q: When can I start to claim this tax credit?
A: If the child moves to private school this fall semester, taxpayers can start to claim a one semester tax credit, the cost of tuition and/or special education related services up to $3,000, when they do their 2011 taxes next year. In years following, the taxpayer can claim a credit based on the number of semesters the child attends private school in that tax year.
Q: Is the tax credit for any services for my child with a disability?
A: The tax credit is for education purposes; private school tuition costs and related educational services. It’s not a general child with a disability credit.
Q: Can I claim this credit on my taxes if my child is already in a private school or being home schooled?
A: Currently, to initially qualify for the credit, the child must have been in a public school for the previous two semesters.
Q: Is there a list of schools where the tuition is close to the$ 6,000 credit?
A: Since the law just passed, we have not yet seen a list of schools where tuition is near $6,000. As we get this information, ASNC will do our best to share it with families.
Q: If another person, like a grandparent, is paying for my child’s tuition, can they claim the credit?
A: The person who claims the child as a dependent on their taxes must be the one to claim the tax credit.
Note: Please be sure to check with a tax professional if you have questions about the use of this or any other tax credit.
Tags: Autism spectrum, Developmental disability, home school, legislation, North Carolina Department of Public Instruction, private school, public policy, public school, special education, tax credit
The conservative Civitas Institute released a new report the end of last year on the cost of a high school diploma in North Carolina. The average cost? $142,027 to educate one student through high school, the report says.
But costs vary according to where you live, the study shows. The highest cost was $265,395 to educate a child in Tyrrell County Schools. The lowest was $100,736 to educate a child in Randolph County.
In Wake County, the state\’s largest school system, the cost was calculated to be $123,006. In Charlotte-Mecklenburg Schools, the state\’s second largest school system, it was $153,703.
Let\’s assumes the child attends 13 years of public education (K-12), the average cost per year, per student, is $10,900.
I wonder what is the average cost to educate a child that has been diagnosed with autism? One might assume it would be considerably more right? How much more? Twice as much? Three times? Surely not less, not the $6,000 of tax credits being offered by the State.
Meanwhile those that have not been bankrupted by autism and have income enough to take advantage of the tax credits afforded in this new law will somehow have to come up with the difference once their child\’s school has figured out a way to discourage (kick out) those with special needs. Or of course they can sue. However not many have the $10,000 retainer for an attorney to make sure that their child\’s educational needs are being met. I imagine that the rest of us poor, ignorant souls will bow and scrape to the school in order to keep our child enrolled. When you\’re hungry crumbs can make a meal.
BTW, Last I checked, the Marisopa School tuition is something like $50,000/year.
Health insurance anywhere near being back on the radar? That will actually do something to help my family.
this is great information when i found out i was pregnant immediately i started thinking about the montesourri school and method of education it is privte and i could not afford it. then i discovered my son has downs syndrome, he is extremely high functioning but has a cognitive delay. i question if montesourri method would benefit my child even now that he is 7 about to enter the second grade.
Lots of things about this don\’t sit well with me… it seems an incentive for us to take our kids out of the public schools and them to give us a little money that seems like a good thing (because before we left and were on our own like I have been for the past 12 years since I took mine out before kindergarten!) I have homeschooled my child for the past 12 years at my expense and this credit will do nothing for my child or my family. It sort of seems like \”we will pay you to take your kid somewhere else so we don\’t have to deal with it\” sort of bill to me. The amount of money they are giving here will not pay for most private schools … like a previous commenter stated… Mariposa full time is around 50K… Jordan School of the Arts I think is 14K, most specialized schools that can handle our kids have high tuition because of the lower student to teacher ratio that is required to meet their needs. Also as a homeschooler I know that whenever the state or fed government starts handing out money it comes with strings… with more regulation and more intrusion into our lives. I think I can happily go on without this money and continue doing what\’s best for my child without anyone else\’s interference. I just hate to see anything that seems to be leading back to special needs kids needing to be in a separate setting away from typical peers. Most typical private schools won\’t accept special needs kids because they aren\’t equipped so it\’s likely any private school our kids attend will be with other special needs kids.
The new legislation has limits on who it will apply to and how it can be used. As with other legislation disability advocates have worked on, it does not benefit every child with a disability. Some parents of children on the autism spectrum have found that private or home schools are a good option for their children; some of those schools are highly specialized programs, while others are regular schools who are able to adapt and accommodate children with autism and other disabilities. This bill does provide some support for parents who want to choose educational options other than public schools, but it’s true that it will not provide full tuition for some highly specialized programs. ASNC has been and continues to continues to advocate for policies that will address the needs mentioned here, including better insurance coverage, better schools, more access to services and supports. Policy change relies not just on effort, but on the political and economic climate. ASNC urges you to get involved and stay involved as some of these changes will take a long time and much more effort.
It really is pretty dismal. Anyone who is on any national listservs for autism knows that NC is seriously lagging in autism, especially with regard to special education. It is difficult to even find a special education lawyer in NC. A presenter at a conference I attended made the analogy of a driver rolling through stop signs, speeding, etc and never getting caught- why would he change his behavior? He wouldn\’t. But once he gets a ticket, he might reconsider his illegal behavior. Once he gets two or even three tickets, he\’s back to following the letter of the law. When are the people of this state going to say ENOUGH and start requiring these school districts to comply with the federal law! I cringe every time someone writes to the ASNC yahoo groups saying they are moving here and they were wondering about ABA and wrap around services and social skills groups from the public schools, like they get in (insert non-NC state name here). I don\’t know about other districts in this state but I know in mine they do not use research-based methods (unless you consider \”wing-it\” to be a method, which is definitely a part of the federal law! That is just one example.
It does feel like this law is sort of lame. But I will hold out hope that it may affect even a few kids to get some services they may not have gotten otherwise. With my son, I know he\’s always a day away from being unable attend public school anymore. $6,000 a year won\’t get us very far, especially since we\’d be fronting money we don\’t have, but it\’s better than nothing.
Does the tax credit apply for those parents who keep their children in public school part time but go to private school half day to get needed services?
Shelagh – the way the law for the credit is written, it only applies to children who have left public school entirely and move to a private or home school (and then the credit would apply to specific expenses for tuition or related special education expenses).
And for others reading this reply: we have received several questions recently children who are already in home or private schools. The child must have been in public school the previous two semesters to qualify for the credit, so it applies to children who have been in public school and move to private or home school from this point forward. Those who have moved in previous years do not qualify.
An the irony here is that if you homeschool your child, the loss of income for the stay at home parent is far greater then the cost of tutition at a private school. But this tax credit does not cover the \”free\” teaching services of the homeschool parent. Not even sure if it covers things like texbooks and supplies. What do they mean by \”related educational services\”? Only if I pay someone else to teach my child (not allowed for core subjects by NC homeschooling law) do I get the credit?
Its our understanding that the bill was written so that the tax credit would cover things like textbooks and supplies, as well as any equipment you purchase, andy modifications you might need to make to the home to accomodate schooling for your child as well as services that would support your child\’s education at home.
This law is the worse by far, I agree with Lisa Blocker comment totally.
The law was poorly written and totally discriminates against SOME disabled children. The ones that Already homeschool or pay for private school are not getting a chance. My child was in public school pre school and had a IEP but when it was time for kindergarten I started homeschool but he still got speech services through PS and has had to have a \”service plan\” (is what they call it now) and the testing every three years. I know I will not put my child in PS for any length of time just to receive this money but how many parents will? What kinds of problems will this cause for teachers and the child? It wiil be a revolving door per say. Plus it will end up giving the ones that homeschool for the right reasons problems because of parents pulling their children out of school \”just\” for the money, then probably end up putting them back in after the required time. Anyone that homeschools knows you have to want to do for the right reason! I hope there is some way to revise this law so as not to cause more issues in our school system and to help ALL disabled children.
And just to clarify – these would be textbooks, supplies, equipment, materials, modifications that are part of their special education needs. Materials that would be purchased as part of the regular course of study that do not relate to the child\’s needs for special education due to their disability are not covered in this tax credit.
Is there somewhere we can go to find out more information? I read the bill but I\’m still unclear about what is covered and what is not covered. Will we submit receipts for materials? How will it be determined if something is a material related to educating their special need vs. for general curriculum? Let\’s say i hire someone privately to provide 1:1 ABA therapy, would that be covered? Thanks so much.
Kristine,
ASNC has drafted a fact sheet that includes many of the frequently asked questions that we have gotten on the new law. We have asked that several outside sources review it, but it should be available on our website by August 5th. I\’ll post the link when the information is up.
As to your specific questions: the NC Department of Revenue has not specified what it will ask from people who claim the credit on their taxes. Typically there is a check off box that asks “Are you eligible?” Proof may not be required unless requested (typically during an audit). Most tax experts would recommend that you keep all documentation required for any tax credit for as long as you are required to keep tax records, just in case they would be requested at a later time. The new law does list the items that MAY be required to prove your eligibility. The list is long and can be found in the language of the new bill here at http://www.ncleg.net/Sessions/2011/Bills/House/PDF/H344v7.pdf.
I have reprinted it here:
(f) Information. – In order to claim the credit allowed by this section, the taxpayer shall provide, when requested, the following to the Secretary:
(1) The name, address, and social security number of each eligible dependent child for whom the credit is claimed and the name and address of the school or schools in which the eligible dependent child was enrolled for more than 70 days each semester.
(2) The taxpayer\’s certification that the eligible dependent child did not meet any of the disqualifying conditions set out in this section.
(3) The name of the local school administrative unit in which the eligible dependent child resides.
(4) The amount of tuition paid to a public school at which tuition is charged in accordance with G.S. 115C-366.1 for each semester the eligible dependent child for whom the credit is claimed was enrolled in the school.
(5) The eligibility determination that the eligible dependent child is a child with a disability who requires special education and related services.
(6) A listing of the tuition and special education and related services expenses on which the amount of the credit is based.
(7) For home schools as defined in G.S. 115C-563(a), a listing of the special education and related services expenses on which the amount of the credit is based.
As far as general curriculum vs special needs: that is very much determined by each individual situation. If the materials are those that would be used to meet the curriculum requirements for any home schooled child, then they would not be covered. However if you needed to convert those materials into a visual format for your child, or needed to purchase adaptive equipment for your child, those items would be considered for their special educational needs. The question comes down to: would any child need this to be home schooled or do I need this item/material due to my child’s special needs?
ABA therapy as it relates to helping your child acquire skills for learning does seem to be covered under the Federal definition of \”related services\” that is used in the new NC law as it includes \”developmental,
corrective, and other supportive services.\” While ABA is not specifically mentioned in the definition, the definition is broad enough to include many developmental and supportive services including ABA. I am including the definitions of special education and related services that are referenced in the new law. The child does not have to be getting both special education and related services to qualify, just one or the other. However, I am not a legal expert nor a tax attorney, so I’m not completely qualified to tell you yes or no in terms of what exactly is covered.
NC house Bill 344 uses the following definitions:
‘\”Special education\” means specially designed instruction to meet the unique needs of a child with a disability. The term includes instruction in physical education and instruction conducted in a classroom, the home, a hospital, or institution, and other settings.’
And the federal definition of “related services” which I have copied for you below. Any “related services” would need to fall under this definition.
(26) RELATED SERVICES –
(A) IN GENERAL – The term `related services\’ means transportation, and such developmental,
corrective, and other supportive services (including speech-language pathology and audiology
services, interpreting services, psychological services, physical and occupational therapy, recreation,
including therapeutic recreation, social work services, school nurse services designed to enable a
child with a disability to receive a free appropriate public education as described in the
individualized education program of the child, counseling services, including rehabilitation
counseling, orientation and mobility services, and medical services, except that such medical services
shall be for diagnostic and evaluation purposes only) as may be required to assist a child with a
disability to benefit from special education, and includes the early identification and assessment of
disabling conditions in children.
(B) EXCEPTION – The term does not include a medical device that is surgically implanted, or the
replacement of such device.
Jennifer- thank you for all of the information. I was reading the bill more closely and was dismayed to learn that this tax credit is AGAINST A PERSON\’S TAX DEBT. That is really bad. Federal tax credits, like the child tax credit are given to qualifying people not based on their tax debt.
I\’m curious how much a family of 5, would need to earn to have a tax debt (to the state of NC) exceeding $6,000 per year. For example, we are not a low income family by any stretch and yet our tax debt to NC last year was only $1700, based on our income, deductions, etc. Seems to me that if they are offering $6k credit, then every student who qualifies should get that, particularly since we know that still the state would save money by not serving that child in public school. I guess I\’m just left wondering who this law even applies to. I mean, that\’s quite a stretch- must meet all those requirements (have been in a public school, now in non-public) and then be rich to boot.
Kristine – that\’s correct. It’s not fully refundable the way many Federal tax credits (and some state) are fully refundable. In other words, for those following along at home, if its fully refundable, regardless of your tax burden you get the funds back from the credit – if you don’t owe tax at all, you still get money back. This tax credit does not work that way. The original bill did include a fully refundable credit. At the 11th hour, when the bill was going through its final votes on the NC House floor, an amendment was introduced to remove the refundability. In my opinion, the amendment passed for two reasons 1) there is a minority of legislators who believe that NO tax credit should be fully refundable. It’s a principle they hold, and in some cases they have also proposed changing existing tax credits so that they also only count against ones tax debt. 2) There were a group of legislators who saw the disagreement over the refundability issue as a way to kill support for the bill. So, despite thinking that credits should be refundable on principle, these Legislators voted to remove that section of the law because they did not like the rest of the education tax credit and thought that their colleagues would not vote for it when it helped fewer families. Ah, politics. Advocates do plan to work to get the tax credit fully refundable, but we don’t expect that to happen immediately. Note that the unused portions of the credit carry forward for three years, so should your tax debt increase, you could potentially claim them in future years. Not the same, but somewhat helpful.
This bill is an attempt to help the budget issues with the public schools while also attempting to give some help to parents…BUT it is really less than a halfway measure. The REAL solution is to give parents the financial aid they need to get the children help in permanently addressing and eliminating/or reducing the issues of these Autism Spectrum disorders and Learning Disabilities thereby eliminating the NEED for them to have special education services provided by the public schools. There are NEW approaches to these disorders which result in the elimination/diminishing of the diagnosis so that the child no longer falls \”on the spectrum\” and therfore can be fully mainstreamed in the public schools. If the tax credit can be used for these types of supplemental learning protocols, then the child would NOT have to be in 12 years of special needs education in the school system therby reducing the overall cost to the school system and would allow the child to be fully mainstreamed the majority of their time in school. ALSO the school systems could focus the money they DO have for these service on the most severe and needy children. Companies like Brain Balance Achievement Centers work with children diagnosed with Autism Spectrum Disorders and all Learning Disabilites to address the core and source of the issue not just the sysmptoms…This is the ultimate solution.
How about this: my child was enrolled in the public school preschool program a few years ago, and ever since has had an IEP at the public school — but she has only gone there for speech therapy for the last 3 years (and I\’ve homeschooled her the rest of the time). Does the child need to have been enrolled full-time only?
Thank you.
Quick Update: the bill sponsor has comitted to introducing bill language in the May 2012 legislative session to correct the probem and make the credit fully refundable, as it was in the original bill. We look forward to working to make sure that happens.
Amy. There is some difference of opinion about situations like yours. If we find out any new information we will share it with you. Since the child must have been enrolled in the public school for the past two semesters, any child who is already in private school or home school does not qualify. The same it true for parents who child is enrolled in public school for half a day and private schools/programs for the other half. This is an issue with the financing of the tax credit: in order to make everyone who is already in private or home school eligible, the state would have to appropriate those funds. At the forum last week, the bill sponsor Rep. Stam urged parents who are in this situation to contact their own Legislators and urge them to make improvements to the law so all families are covered by the tax credit.
What do I need to do to hopefully get them to include children that were in public and now in private for 4 years? Basically take out the part the children have to have been in public the past two semesters.
Sarah – Yes. That is correct. The bill sponsors have urged familes to contact thier own legislators to advocate for changing the eligibility criteria to include children that have left the public school system in previous years. Please know that the only reason that eligibility was set the way it was in the bill is that providing tax credits lowver to children already out of the school system lowers over all tax revenue (in other words it will cost the state money and they are reluctant to do anything that costs the state money). Please let me know if you need any assistance in contacting your Legislators. My email is jmahan at autismsociety dash nc dot org.
How Do I Get or Apply For A Tax Credit With A Disablity Teenager . To Get Into A Disality School . At Any Grade Level. Thank You Evelyn McDaniel
Evelyn. First it might be helpful to take a look at the Autism Society in NC\’s web page article on the tax credit. It may answer your questions. http://www.autismsociety-nc.org/index.php?option=com_content&view=article&id=398&Itemid=759 Second, if that does not answer your questions, my contact information is listed on that page that I have linked here. There is no applicaiton process for the tax credit, but there are certain eligibility requirements to qualify for the credit that you should check before deciding to move your child to a private or home school. The Department of Revenue for the State of North Carolina will decide how tax forms will change in order for you to claim the education tax credit. Please see the article for more information.
My daughter was in public school for half of Kindergarten. We pulled her out after two semesters. She has high anxiety and is dyslexic. I have homeschooled her since then, she is now in 3rd grade at home. I will not put her back in the public school because they don\’t use a Orton Gillingham curriculum to help dyslexic. As far as I have researched they don\’t service dyslexics, they call them struggling readers.
Can I claim the credit, her curriculum is quite expensive?
Amy
Amy, because of budget restrictions, the tax credit is only available begining with students who left public school just prior to the law passing in July of 2010. So students who were in public school for the two semesters prior to July 2010 (Spring of 2010 and Fall of 2009) and those who leave after July 2010 qualify for the credit. Other studetns are NOT grandfathered into the law. I\’m sorry, but unless that is the case for your child, you do not qualify.
I removed my son from public school at the end of the school year 2011. He had a 504 plan and we were just informed that they could not provide the special education he needed without dropping him from his honors classes. They said he didn\’t qualify for a IEP, although there were teachers in attendance that said he did simply with the diagnosis of Asperger\’s Syndrome. They said I was welcome to hire a lawyer and challenge their decision in court. It was at this time, after 3 years of trying not to make waves and settle for a poorly executed 504 plan, we decided we were out of time (and money) and that homeschooling was what we needed to do. Why spend the money and time to fight to keep my son in a school that has said they can\’t or won\’t help him? He\’s currently in the 11th grade. Is there any way to get the tax credit if the school refused the IEP even though there were teachers and tests that said he truly qualified for special help? I\’ve got paperwork, test results done by the school, etc. We\’re homeschooling. I\’m not working. We\’ve purchased curriculum and laptops (a Godsend) and even some therapy on credit cards. Would really be nice to find out we qualified for this credit.
Thank you for any thoughts/advice.
A couple of things Lisa. I\’m very sorry you have had such difficulties with the school system. We hear from many parents in similar situations. From my discussions with our ASNC advocates, saying that your child cannot take honors classes as a special education student is wrong. I\’m not sure of the exact circumstances under which this was told to you, so I\’m not aware if it was due to school schedules or other issues but if they were indicating that someone with an IEP could not take honors classes, that is completely untrue. Advocates have also told me that often it is the school psychologist that carries much of the weight/advocacy in determining if the child qualifies for an IEP, some school psychologists are great advocates for children with disabilities/special needs. As to the tax credit law: it currently requires an IEP to have been in place in the public setting to initially qualify for the tax credit. This was done to try and address some of the opposition to the original bill, and ensure the credit was applied to children who were most severely affected (some lawmakers expressed concerns that only children with \”mild\” disabilities would leave the schools). I\’m very sorry that your child\’s previous school has put you in this situation. I\’m not sure what county you live in, but if you contact our offices at 919-743-0204, one of our Parent Advocates would be more than happy to talk with you about schools and offer a ear and maybe some ideas, but unfortunately at this time I don\’t have good news to report about qualifying for the tax credit.
We are grandparents who have custody of our grandson. He is 11 years old and in the fifth grade. He has been diagnosed with aspergers, ADHD , and a brain malformation. We put him in private school this year for him to experience a better learning environment for his needs. He did have an IEP in public school for 2010/2011. In his private school they do not have resources as such for his learning problems, but because of the small class size thought it would be beneficial to him. He did perform better but is still in need of more specific services, I.e. a one on one aide. We have already filed our taxes for 2011 and were not aware of the tax credit. Would we still be able to apply or do we have to wait until next year?
Thank you, Sara
Sara,
The IRS and the state of NC allow you to file amended tax forms if you have found errors in your filing. IRS Ten Facts about amended filing: http://www.irs.gov/newsroom/article/0,,id=172656,00.html NC Dept of Revenue downloadable list of forms and instructions including ones for amending tax filing: http://www.dor.state.nc.us/downloads/individual.html
I would also recommend checking out the ASNC web page on the tax credit for more info on requirements for the credit and the tax forms to use. http://www.autismsociety-nc.org/index.php?option=com_content&view=article&id=398&Itemid=759. The tax credit is not fully refundable, so depending on your tax liability it may or may not impact your return.
Here is some of the info the Dept of Revenue supplied on the tax credit:
The NC Department of Revenue has recently issued guidance on the tax credit bill. It can be found here: http://www.dornc.com/taxes/individual/specialeducation.html . We recommend reading this document before filling out the tax credit forms.
In order to claim the credit, the credit is entered on Line 23, page two, of the Form D-400TC, the 2011 Individual Income Tax Credits Form, and becomes part of that individual\’s total tax credits on Line 37 of that same form. Line 37 of the Form D-400TC is then entered on Line 15 of the Form D-400, Individual Income Tax Return for the tax year 2011. The Form D-400 with the D-400TC is shown on the Department\’s website at http://www.dornc.com/downloads/D400_D400TC.pdf.
The new law states that anyone claiming the tax can be asked by the Department of Revenue to submit the name, address, and Social Security number of the child, the taxpayer\’s certification that they qualify, the name of the local school administrative unit where they reside, the eligibility determination that the child has a disability requiring special education or related services, and a listing of tuition and special education or related services on which the credit is based. Please see the recent law for an exact listing of the information that may be requested by the NC Department of Revenue: http://www.ncleg.net/Sessions/2011/Bills/House/PDF/H344v7.pdf. As with all tax issues, ASNC recommends you maintain records of your expenses.
So the child has to be in Kindergarten in order for us to get the credit ?
Natalia – this tax law is very complicated. There are many circumstances under which a child may or may not be eligible for the credit. Being in Kindergarten is not a requirement; the law simply has slightly different requirements for children with special needs who are going from a pre-school situation into private or home schools. If you are not sure if your child would qualify or not based on the information in this blog or on our website at http://autismsociety-nc.org/index.php?option=com_content&view=article&id=398&Itemid=759 I recommend that you contact me directly by phone (not email). I\’ll typically need to ask you a series of questions to understand if you meet the eligibility requirements for the credit. Please check out the ASNC website article in this link above before you call. Thanks!
For tax years beginning on or after January 1, 2014, this credit is no longer available.
http://www.dor.state.nc.us/taxes/individual/specialeducation.html
That is correct. However, for people filing taxes this calendar year (2014) for the previous tax year (2013) the tax credit is still in effect for those who qualify.