Indiana

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Indiana: education tax credit and voucher programs

Indiana offers a Choice Scholarship voucher for private school tuition with no family income limit, a state tax credit for gifts to scholarship granting organizations, an education savings account for students with disabilities and their siblings, and a state income tax deduction for private school and homeschool costs. It also funds a career training account for high school students that does not pay private school tuition.

Last checked 2026-10-16

State programs Opted into FSTC for 2027; list due Feb 15

Statewide tuition voucher with no income limit

Indiana Choice Scholarship Program

From the 2026-27 school year, any student with legal settlement in Indiana who is at least 5 and under 22 on October 1 can use a state-funded scholarship at a participating private school in kindergarten through grade 12, with no family income limit; the school files the application.

Estimated full-year awards of $6,033.32 to $8,328.56, depending on the student's public school district, or the school's tuition and fees if lower; students approved in the second application period receive half (2026-27)

Donor tax credit for scholarship organizations

Indiana School Scholarship Tax Credit (SGO program)

Individuals and businesses that give to a scholarship granting organization certified by the Indiana Department of Education can claim a state tax credit. The organizations award scholarships at participating schools, pre-K included, to Indiana students from households with income below 400% of the federal school lunch program income level, checked every year.

Credit of 50% of the gift, with no limit per donor; credits statewide are capped at $18.5 million for the state fiscal year (2026-27)

Education savings account for students with disabilities

Indiana Education Scholarship Account (INESA)

Indiana students age 5 to 22 with an active Indiana IEP, service plan or choice special education plan, and their siblings, can receive a state-funded account for approved education costs. The Indiana Department of Education runs it from the 2026-27 school year.

Up to $20,000 a year for a student with a disability and up to $8,000 a year for a sibling (2026-27)

Career training account for high school students

Indiana Career Scholarship Account (CSA)

Students in grades 10 to 12 can use a state-funded account for approved apprenticeships, internships, work-based learning and credentials. It does not pay private school tuition.

Up to $5,000 a year, paid in four installments of $1,250 (2026-27)

Parent income tax deduction for private school and homeschool costs

Unreimbursed Education Expenses Deduction (private school and homeschool)

Parents can deduct from Indiana adjusted gross income their unreimbursed tuition, fees, software, textbooks, curricula and school supplies, other than computers, for each dependent child in kindergarten through grade 12 at an Indiana private school or homeschool.

$1,000 deduction per dependent child (2026)

For families

Since July 1, 2026, the Indiana Choice Scholarship Program has had no family income test. The award is the lower of the school's tuition and fees or an amount set from state funding for the student's public school district of legal settlement. The 2026-27 amounts the Indiana Department of Education has posted by district are estimates, not final awards. Students approved in the second application period, from November 1, 2026 to January 15, 2027, receive half of a full-year award.

Participating schools are Indiana private schools that charge tuition, are accredited by the State Board of Education or a recognized accrediting body, give the statewide assessment and report performance data.

Scholarship granting organizations (SGOs) award a separate set of scholarships, funded by donors' gifts. Each SGO sets its own scholarship amounts; the state sets no minimum or maximum. For the 2026-27 school year, the Indiana Department of Education's SGO FAQ lists these student requirements: household income below 400% of the National School Lunch Program income level, checked again every year; legal settlement in Indiana; age 4 to under 22 on or before August 1; and enrollment at a participating school. SGO scholarships can be used for pre-K. A student can hold a Choice Scholarship and an SGO scholarship at the same time.

The 2026-27 school year is the first in which the Indiana Department of Education runs the Indiana Education Scholarship Account. Its 2026-27 application period ran from March 1 to September 1, 2026. The amount depends on the student's public school district of legal settlement and level of disability, and payments are made in August, October, December and February.

The Unreimbursed Education Expenses Deduction is taken on the annual Indiana individual income tax return. The Indiana Department of Revenue describes it in Income Tax Information Bulletin #107, dated November 2022.

For donors

The state credit for gifts to an SGO is claimed on Schedule IN-OCC with the Indiana income tax return. A tax credit ID number is created when a gift is made, and the SGO is expected to pass that number to the donor. Credit a donor cannot use in the year of the gift can be carried forward for up to nine years, and a pass-through entity can pass the credit through to its owners.

A donor may name a participating school for a gift but not a specific student, and an SGO may not limit its scholarships to a single school.

The statewide limit on credits applies to each state fiscal year, which runs from July 1 to June 30. The Indiana Department of Revenue posts a running count of credits awarded against the limit on its School Scholarship Credit page.

The Indiana Department of Education leads SGO certification and builds Indiana's annual list of SGOs for the Federal Scholarship Tax Credit. Its SGO page says: To participate as a federal SGO for the 2027 tax year, qualifying Scholarship Granting Organizations must have applied and been approved by December 31, 2026. Organizations apply through the State + Federal SGO Application. The state program has no application deadline, and approved SGOs do not reapply each year.

Key dates

  • 2026-11-01: Second Choice Scholarship application period opens, for half-year awards
  • 2026-12-31: Last day for a scholarship granting organization to apply and be approved through the Indiana Department of Education to act as a federal scholarship granting organization for 2027
  • 2027-01-15: Second Choice Scholarship application period closes
  • 2027-07-01: A new state fiscal year of school scholarship tax credits begins

The federal tax credit in Indiana

Indiana has made an advance election to take part in the Federal Scholarship Tax Credit for 2027. The election takes effect only if the state gives the IRS its list of scholarship granting organizations by February 15, 2027.

Federal Scholarship Tax Credit in Indiana

Fundraising rules in Indiana

Registering a charity or school

Indiana has no statewide registration for charities, including schools and religious organizations, that raise money through their own officers, regular employees and volunteers, and hiring a paid solicitor or fundraising consultant does not change that. The paid solicitor's or consultant's contract with the charity is filed with the Attorney General's Consumer Protection Division, and the charity certifies the solicitor's campaign notice and post-campaign financial report.

Professional solicitors

A person paid to solicit gifts for a charitable organization, including one outside Indiana that solicits Indiana residents, registers with the Attorney General's Consumer Protection Division before soliciting. The solicitor files each charity contract, a notice before each campaign and a financial report within 90 days after it ends, and must tell donors that it is paid.

Fundraising counsel

Indiana registers paid fundraising counsel separately from solicitors: a person paid to plan, manage or advise on a charity's fundraising who does not solicit and does not hire anyone paid to solicit. Counsel registers with the Attorney General's Consumer Protection Division before acting, and files each client contract with the Division before starting work, stating its services and whether it will ever hold donations.

References

Regulator: Office of the Indiana Attorney General, Consumer Protection Division

Official sources

Questions? Contact us

This page is informational and is not tax or legal advice.

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