How the Tax Credit Would Work

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Colorado voters will decide next month on a state constitutional amendment that would establish an income-tax for parents of children educated at home. (A tax credit directly reduces a person's tax liability, as opposed to a tax deduction, which reduces a person's taxable income.)

The program would offer parents as much as $2,500 annually per child in state tax credits for educational expenses, including private school tuition.  If parents owed the state less in income taxes than the amount of the credit, they would receive a check from the state for the amount of the difference.

In the case of a child leaving public school for a private school, his per-pupil state expenditure (now about $5,000) would go into a new Educational Opportunity Fund.  The fund then would provide half the $5,000 as a tax credit to the child's family; the other half would pay for other priorities of the program.  The fund is designed to be self-supporting, although state budget experts say some administrative costs would likely have to come out of the regular state budget.

Tax credits would be doled out as available in the following order of priority:

1. Parents of students who transfer to a private school from a public school district that scores below average on state tests, as well as parents of special-needs students.
2. Parents of students who transfer from other public schools to private schools.
3. Low-income parents of students already in private schools.
4. All other parents of students already in private schools.
5. Parents of students who remain in public schools and of home-schooled children.

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