Federal tax credit program could benefit Illinois students with disabilities
The Federal Scholarship Tax Credit, also known as the Education Freedom Tax Credit, could help students access funds for special-needs education services.
Nearly 375,000 students with disabilities were enrolled in public schools in Illinois last year.
A new program could help them pay for important educational therapies so they can thrive in school. That includes any education-related services disabled students need, including occupational therapy, physical therapy and assistive technology.
The Federal Scholarship Tax Credit, also known as the Education Freedom Tax Credit, provides a dollar-for-dollar federal tax credit of up to $1,700 annually for donors who contribute to K-12 student scholarships. Starting in 2027, students in public or private schools can access donor money for a variety of educational services.
But students in Illinois can access the money only if Gov. J.B. Pritzker opts Illinois into the program. Otherwise, money from Illinois donors will flow to students in other states.
Most students with disabilities enroll in public schools. Nationally, 95% of school-aged students with disabilities were enrolled in regular public schools in fall 2022, according to the National Center for Education Statistics. Only 2% were in regular private schools.
The federal Individuals with Disabilities Act requires public schools to provide students with disabilities special education and necessary related services such as speech, occupational and physical therapy at no charge to families. But the law doesn’t reimburse families for any special education expenses they incur.
That’s where the Federal Scholarship Tax Credit program, also known as the Education Freedom Tax Credit program, can help. Families can use the money to pay for education-related services for their children with disabilities, including but not limited to:
- Occupational, physical, speech or behavioral therapy
- Special education evaluations and reevaluations
- Tutoring, including executive-function support
- Assistive technology needed for instruction, such as text-to-speech tools or specialized software
Children in families with an income of 300% or less of their area gross median will be eligible for the donor money.
Taxpayers who donate can receive the federal credit no matter what. But Illinois students can benefit from the donated money only if Pritzker opts Illinois into the program.
So far, 31 states have indicated they will opt in, including six controlled by Democrats. Pritzker has until Jan. 1 to opt in Illinois.
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